With the state of the current economy, so many people are living on a tight budget. They are cutting down on their expenses and spending their money on the most essential items. But in a situation where your car develops major issues, you may find yourself in a big dilemma to either fix or replace it.
Cars play an important role in our daily life, we use them to go to work, school, and to perform a host of other errands and activities, so it can be quite difficult to continue your daily without one. If ever you find yourself in such a situation where you need to replace your car but don’t have the budget, below are a few things that you should consider;
Fix your current car:
If your current car is not too old, i.e. less than 10 years old with less than 100,000 kilometers on the odometer, then it may be a cheaper option fix the problem than to replace the car with a new one.
But if the cost of repair is more than 40% the value of the car, particularly if such repairs would not guarantee that the problem would be fixed once and for all, then you may need to consider replacing it.
Perhaps you don’t have the personal funds to pay for the repair, you can take a small “Fix it” loan from your bank or ask friends or family for some financial assistance.
Buy a reliable, used car:
If repair is not a feasible option, perhaps the cost of repair is more than 40% of the value of the car or the car is older than 10 years old, then you definitely need a replacement vehicle. The best option will be to purchase a compact, reliable, and energy-efficient used car that is between four to seven years old. Cars typically go through maximum depreciation within the first five years of use, so basically, you will be buying a car which the previous owner has shouldered the bulk of the depreciation cost.
This simply means the car won’t depreciate so quickly while you use it. You can find a good, reliable used car for under $10,000 to $15,000, no problem.
When searching for a car to buy, look for one that matches your functional and stylistic needs, has a reliable and favorable history, and one in which parts would not be too difficult to come across should the need arise. We advise you buy from someone who is the original owner or who has held the car for long enough time he/she can provide you with a reliable history of service. It is also not a bad idea to ask why the person is selling the car.
If the seller tells you he/she is upgrading to a newer model or he/she is moving to a place where owning a car wouldn’t make much sense, then you can accept this as a favorable answer. But if the response hints at a shortage of money, then this is unfavorable, as it suggests that they may not have been investing to keep the car up in the recent past.
Cars with salvage titles are those which may have been severely damaged or regarded as a total loss by the insurance company which paid a claim on it. Unless you are a car expert who is able to judge if a car is inappropriate, steer clear of cars with salvage titles.
Also, before you buy a used car ensure to have it checked by a mechanic. The mechanic will be in the best position to tell you what you can expect and recommend to you whether you should go ahead with the purchase or not.
An even easier option than going through this hassle of buying private, is to buy from a reputable, certified pre-owned dealership, such as those at the FFUN Motor Group. Here you can get a quality vehicle that you know has had the necessary inspections and see a CARFAX history report that will tell you all about the vehicle’s history. You might pay a slight premium for this extra service, but the peace of mind and removal of long-term headaches is well worth it.
Consider leasing:
You should only opt for leasing if you have a stable source of income that can guarantee you will make prompt payments. This can include a well-paying job that has a good likelihood of future advancement. If you are not absolutely certain about your future income, then perhaps take on one of these other options.
Sometimes you can get so lucky and find a manufacturer who is willing to offer a special lease deal for as low as $199 per month. Some smart car manufacturers even offer leases as low as $99 per month. But they are usually on base-level sub-compact models, so you shouldn’t be expecting to get anything too amazing. What leasing does guarantee your however is reliable transportation at a very low price.
Alternative transportation:
Short term rentals and public transportation can be a viable alternative if you live in a big city. These combinations will afford you some flexibility while minimizing your transportation costs. Aside from that, you won’t have to pay for car insurance thereby affording you the opportunity to save some money monthly towards a replacement vehicle.
As costs on everything from food to housing seems to keep rising, it’s important that you make the best financial decision for your current situation when it comes to your automobile. The good thing? There are plenty of options, no matter what stage you’re in and the fine folks at your local FFUN Motor Group dealership would love to help you determine exactly what that is to keep you on the road!
