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Reasons to Resist the Desire to Buy a New Car.

Of all my parents' advice that I ever willfully ignored, "Never be car-poor!" is probably one of the most useful.

"Car-poor", in my parents' dictionary, meant "slavery to a car payment and other related high costs". Keep in mind that a new car not only requires a monthly payment, but also higher insurance premiums, as well as higher property taxes (depending on local laws).

As my dad put it, "You wanna have a car to get you to your job. You don't wanna have a job just to pay for a car".

Keep in mind that when you're shopping for a new car, dealerships are actually in the business of arranging loans. They practically make more money from the car loan than from the sale of the car itself! Over the life of a new car loan, you can actually pay double (often more!) the sticker price of the car. Leasing a new vehicle is an especially foolish move- once you're done making payments for 4-5 years, you have absolutely nothing to show for it. You just hand the keys back to the dealer, and you need to come up with a deposit for a new car.

My parents were realistic: they understood that in the suburbs, a car was an absolute necessity, not a luxury. They also knew that a solid, lower-mileage older car in good shape could get them where they wanted to go just as well as a newer, shinier car. My dad drove an ancient Dodge Dart that absolutely refused to die, while my mom always had a somewhat newer (yet no less solid and reliable) car.

I don't remember my parents ever buying a brand-new car; my dad was fond of used cars, because someone else had already absorbed the bulk of depreciation, and all the "kinks" were worked out. Later on, my dad found great deals buying super-low-mileage cars just coming off their lease programs. The former lessee's loss, my dad's gain!

My dad was super-conscientious about maintenance- regular oil changes, tune-ups, car-washes (removing road salt and sand and other debris protects the car from rust)- keeping cars running for a long time. By keeping their cars in good shape, my parents' cars had excellent resale/trade-in value; my dad was able to pay cash-in-full for new cars, bypassing a car-payment, and allowing them to save more money.

(Soapbox moment) Aside from the purely financial aspects, advertisers have done a super job of convincing people (Americans especially) that "You are the car you drive". This, of course, is nonsense that appeals to people with a distorted sense of self, the belief that a nicer car will make you a better, more attractive person. I often see young people on the road in their expensive cars, with a "Please, please, please look at me!" expression on their faces. It's very sad. A car is built for transportation, but we've been convinced that status is more important than practicality. (End of soapbox moment)

Unless your current car is absolutely falling apart, and repair costs outweigh the value of your car, definitely consider taking better care of it, so that it will serve you for a long time. Think about the extra money you will have each month, when you don't have to make a car payment! See how it feels to not be "car-poor"!

Learn more about this author, Christine Conte.
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