If you're paying for car repairs far too often, buying a new vehicle might seem like a no-brainer. Upgrading could plug the leak in your budget and have you cruising down the highway without fearing a sudden breakdown.
Whether you decide to buy a new vehicle or drive your existing one until the wheels fall off, here's how to determine your next steps.
Start by asking yourself:
Is my ride considered a high-mileage vehicle?
Generally, vehicles with over 100,000 miles are considered high mileage and some older vehicles will start having engine, transmission, electrical and steering and suspension system issues.
Maintenance and repair costs tend to increase as a vehicle's mileage increases. However, some high-mileage vehicles can last much longer with proper care. Regular maintenance, such as oil changes, new tires, and brake replacements, is crucial to extending the life of your car and preventing expensive repairs.
Are repair costs straining my budget?
Tally your costs from the past six months and research the fair market value of the vehicle to determine if it's economically sound to continue investing in repairs or if it would be more cost-effective to replace the vehicle. For example, if you're spending what amounts to a car payment each month to keep your vehicle operational, a newer model might be less expensive.
Does my vehicle have known safety issues?
Drivers are encouraged to periodically check the NHTSA Safety Issues & Recalls website to confirm whether their vehicle has a known safety issue. Enter your vehicle identification number (VIN) to find out if an automaker or parts manufacturers have issued recall notices.
Even if there isn't an active recall, strange noises, warning lights and difficulty stopping the car could spell trouble. Frequent breakdowns or significant mechanical issues could put you and other drivers at risk. If the car is becoming increasingly unsafe to drive, it's likely time to invest in a new one.
If you've determined that a new set of wheels is on the horizon, buckle up — because there are two important things besides sticker price you should also consider.
Auto Insurance
If you're financing your new vehicle, your lender requires that you purchase both collision and comprehensive coverage. According to Bankrate, the average costs for full coverage is $2,014 annually which breaks down to about $168 a month. Keep in mind that some cars cost more to insure. Insurers look at the vehicle's safety, potential for theft and how much damage it could cause to another car in an accident. Compare quotes and policies from different providers. A higher deductible will typically result in a reduced premium, yet it's crucial to ensure that the deductible is a cost that you can cover if you must file a claim. SchoolsFirst FCU's insurance agents gather quotes, coverage options and discounts to help you find the right insurance policy. Learn more.
Vehicle Financing
When financing a vehicle, the interest rate, loan terms and down payment affect the overall cost of the vehicle.
- A higher interest rate increases the minimum monthly payment and overall cost, while a lower interest rate could help save money.
- Shorter loan terms may lower total finance charges but may have higher monthly payments, while longer loan terms may have higher total finance charges but lower monthly payments.
- A larger down payment could help secure manageable monthly payments, while a smaller down payment might result in higher monthly payments and a greater overall cost.
Carefully weigh your finance options to help ensure you get the best deal for your needs and budget.
Car shopping can feel like a daunting task. Between setting a budget and finding a car that suits your needs, it's easy to get overwhelmed and not know where to start. Our Car Buying Services can help make the buying process a stress-free experience.
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