Our current vehicle is near the end of its useful life. While we’ve been doing our best to keep it in safe running condition, after 11 years, we know the end will likely be coming soon. While we’re hoping for the best in our vehicle situation, we’re planning for the worst. However, there is hope. According to a recent MSN Money article, “Used car prices have been falling since 2011…” Therefore, we’ve come up with a strategy for planning our new vehicle purchase.
Gauging repair costs on current vehicles and trying to wait things out
I have a feeling that the “Cash for clunkers” program back in 2009 sopped up much of the used car inventory. We’ve been trying to wait things out since then in order to let some of those with newer vehicles get to the point where they’re ready to trade them in and upgrade. According to that same MSN Money article, “The average retail price of a used car fell by $1,000 per car in the last half of 2012.” Therefore, we’re currently in “wait-and-see” mode. We’re gauging potential issues with our current vehicle and watching repair costs, while at the same time watching for deals in the newer used car inventory.
Bolstering emergency savings
We don’t know exactly when our current vehicle will become more costly to maintain than it’s worth, but we know the day will eventually come. Therefore, we’re trying to set money aside a little bit at a time month by month so that we can bolster our emergency fund for when our current vehicle is finally kaput.
Much like a car payment structure, just setting an extra $50 or $100 aside each month adds up overtime, and being able to stretch our savings timeframe by a year or two could add an extra $1,200 to $2,400 to our available car-buying budget.
Watching available options and knowing good buys
We scan the “cars” section of the local newspaper regularly for deals and pricing. We also visit area used car dealerships online and review the inventory at our local CarMax location to see what’s selling in the new and newer used car categories. In this way, we stay apprised of current pricing levels, have a background upon what is selling and any great deals out there, and generally increase our education on what vehicles might be right for our family’s needs.
Doing a gas cost analysis
As vehicles become more fuel efficient, this also plays a role in our decision of what sort of vehicle to buy. Being a family of four in the Chicagoland area means that it’s nice to have a larger vehicle, but city driving and lower fuel mileage rates can hit us where it hurts…the wallet.
Over the years, I’ve gauged our own vehicle’s fuel consumption rates when it comes both to city and highway driving. In this way, I can have a better idea when it comes to looking at new or newer vehicles of how much we’ll spend on gas based upon their estimated fuel mileage compared to what we spend now. Even just $400 a year in fuel savings can add up when we’re talking about having a vehicle for seven or eight years or longer.
And in these ways, we are better prepared for buying our new vehicle when the time comes and we aren’t left scrambling to make a decision and just buying something to fill the vehicle void.
The author is not a licensed financial professional. The information provided in this article is for informational purposes only and does not constitute advice of any kind. Any action taken by the reader due to the information provided in this article is solely at the reader’s discretion.