You’re probably not alone if you’ve set a lot of ambitious goals for 2024. One of the many personal financial resolutions you may have at the beginning of the year is to trade in your old, ugly car for a newer model.
It makes sense that you would want to update your vehicle, particularly if you drive frequently. Here’s why, though, you might want to pass on purchasing a car this year.
1. The cost of borrowing is still high
However, whether you’re considering a home equity loan, a personal loan, or a car loan, the cost of borrowing money is still high. Therefore, even with a good credit score, you may be forced to pay a larger interest rate than you would like if you have to finance a car.
2. The cost of cars continues to rise
In general, car costs decreased in 2023. That’s the fortunate news. But according to Kelley Blue Book, an Irvine California-based vehicle valuation and automotive research company, the average cost of a new car as of October was $47,936. That is by no means a tiny sum of money.
Having said that, you are not need to get an automobile that costs close to $48,000. Sticking with a used car or purchasing a newer car but sacrificing some higher-end options could save you money on your purchase. Even so, be aware that you can wind up spending more than you’d like to because cars aren’t inexpensive these days.
3. You have other goals you’re saving for and your present car runs well enough
If your existing car is so old or has so many issues that it’s become unreliable, it makes sense to buy a new car this year if you have the money to do so. If your car won’t start and you continually arriving late for work, you can jeopardize your employment. And when it comes time to pick up your children from school, you just cannot afford to remain stuck in your driveway.
However, if you have other urgent goals you’re saving for, it makes sense to put off buying a new car if your existing one still runs well and you think you can get another year out of it. These may be setting up an emergency fund or updating the air conditioning system in your house.
You could enjoy your daily commute more if you had a new car. Let’s also be honest: whether it’s a handbag, a TV, or an automobile, having new items is generally great. For that reason, you might be tempted to go ahead and buy a car in 2024 if you have some savings set aside for a down payment. Before you buy a car, though, weigh the disadvantages of doing so this year and, if possible, consider delaying the purchase for another year.
