I have never bought a new car... I should not say that I bought a "new" Mustang it had 111 miles on it, and it was technically purchased by the Dealership, before I bought it, I am technically the second title owner, but actually the first owner...
You have a choice to make. I bought my 2007 Tahoe LTZ used for $25,000 with 70K miles on it, a friend of mine bought a Brand new 2009 Denali for $60,000 or whatever he paid for it. For the sake of the argument let us say he paid $50,000... So, one day we were riding in my "used" car and he said, "this is a nice truck." At that point I pointed out I paid 1/2 what he paid for his Denali. he just shrugged it off and said that he bought his new. At which point I asked him. If I put $25,000 more into my Tahoe, what kind of vehicle would I have? I could give it some bling, I could give it a custom paint job, maybe a supercharger, etc... He looked at me and realized I was onto something...
Let us assume If you plan on spending $500 per month for on a 48 month loan for a $25,000 vehicle after your $5000 trade in. Now think of it like this... What would happen if you invested $5000 into your current vehicle? $5000 is actually less money than a single year of your loan... At this point you are saying to yourself, "but the value of a new car is worth more!!!" So why would I invest $5000 into a $5000 vehicle? When I could be driving a $25,000 vehicle!..." But over that same amount of time 1 year, you technically will pay $10,000 dollars on that vehicle, if you were to try to sell it a year from now. The Dealer will only give you $15,000 for a trade in 1 year from now from that vehicle you just bought.
What you are probably going to miss, is that $25,000 vehicle that is worth "more" is actually going to cost you more in the long run. Your $5000 vehicle is paid off, so you do not have a monthly payment. But that $25,000 vehicle you "invested" in actually lost $5000 that year of driving... So in reality, the trade in is probably going to be $15,000 in one year, after the miles you put on it.
Depending on the severity of the repairs of the vehicle, it is almost always less expensive to fix what you have, than to buy another. Look into what your car and what the insurance company will pay you if you total it today.
Financially it almost always costs you less to just hang onto what you have, than to replace it with something newer. There are exceptions, but in the end do you NEED to do it? If you can have it fixed for less than a few car payments, and you keep up on the service and repairs as needed, then it is financially more sound to just repair it. BUT if you just want a newer car or a different car, or you are tired of fixing the car because everything is starting to cascade on you for problems... Then get another car. Never sell a car because it needed repair, that is like selling your car because it needed tires or brakes... Same difference.
The reasons I have gotten rid or sold cars
1) It was so rusted out that it was no longer safe.
2) I had too many cars and needed to make room for another.
3) I had one car that was an electrical nightmare, I would get it just right, and 2 months later it was on the fritz again. My daughter was driving it and she would never tell me there was a problem so I did not know until it was really bad. So I got her something more reliable. IT was actually a wash in the end, but there was that.
4) 4 out of 5 times I just wanted something different to drive... I got sick of what I had.
John
You have a choice to make. I bought my 2007 Tahoe LTZ used for $25,000 with 70K miles on it, a friend of mine bought a Brand new 2009 Denali for $60,000 or whatever he paid for it. For the sake of the argument let us say he paid $50,000... So, one day we were riding in my "used" car and he said, "this is a nice truck." At that point I pointed out I paid 1/2 what he paid for his Denali. he just shrugged it off and said that he bought his new. At which point I asked him. If I put $25,000 more into my Tahoe, what kind of vehicle would I have? I could give it some bling, I could give it a custom paint job, maybe a supercharger, etc... He looked at me and realized I was onto something...
Let us assume If you plan on spending $500 per month for on a 48 month loan for a $25,000 vehicle after your $5000 trade in. Now think of it like this... What would happen if you invested $5000 into your current vehicle? $5000 is actually less money than a single year of your loan... At this point you are saying to yourself, "but the value of a new car is worth more!!!" So why would I invest $5000 into a $5000 vehicle? When I could be driving a $25,000 vehicle!..." But over that same amount of time 1 year, you technically will pay $10,000 dollars on that vehicle, if you were to try to sell it a year from now. The Dealer will only give you $15,000 for a trade in 1 year from now from that vehicle you just bought.
What you are probably going to miss, is that $25,000 vehicle that is worth "more" is actually going to cost you more in the long run. Your $5000 vehicle is paid off, so you do not have a monthly payment. But that $25,000 vehicle you "invested" in actually lost $5000 that year of driving... So in reality, the trade in is probably going to be $15,000 in one year, after the miles you put on it.
Depending on the severity of the repairs of the vehicle, it is almost always less expensive to fix what you have, than to buy another. Look into what your car and what the insurance company will pay you if you total it today.
Financially it almost always costs you less to just hang onto what you have, than to replace it with something newer. There are exceptions, but in the end do you NEED to do it? If you can have it fixed for less than a few car payments, and you keep up on the service and repairs as needed, then it is financially more sound to just repair it. BUT if you just want a newer car or a different car, or you are tired of fixing the car because everything is starting to cascade on you for problems... Then get another car. Never sell a car because it needed repair, that is like selling your car because it needed tires or brakes... Same difference.
The reasons I have gotten rid or sold cars
1) It was so rusted out that it was no longer safe.
2) I had too many cars and needed to make room for another.
3) I had one car that was an electrical nightmare, I would get it just right, and 2 months later it was on the fritz again. My daughter was driving it and she would never tell me there was a problem so I did not know until it was really bad. So I got her something more reliable. IT was actually a wash in the end, but there was that.
4) 4 out of 5 times I just wanted something different to drive... I got sick of what I had.
John
