Cars have never been this expensive, and we’ve got a number of geopolitical situations across the globe to thank for the current state of affairs in the automotive industry.
That being said, there’s little that can be done about the average price of a car, and you’ll want to carefully examine whether you can actually afford one at the time.
Weighing between how much you need a car and if you can afford it can be difficult, especially if you’re picky about what you’ll be driving.
The options are practically endless, but if you’ve ever exercised financial responsibility you may already know what kind of car you’re looking for.
If saving as much money as possible is your goal, the car you get only needs to get you from point A to point B, and while that’s easy enough to figure out on its own, you’ll also want to get one that will be worth your while.
The automotive market
Currently, the average price for a new car is around $48k to $50k, whereas used cars are going for as little as $26k, and most experts will tell you that the high prices are due to the supply chain bottlenecks caused by the COVID-19 pandemic.
However, the conflict in Eastern Europe also helped create this crisis, as certain metals used in car manufacturing have also become largely unavailable, causing other suppliers to drive up their prices in order to meet the demand.
With this in mind, you’ll want to start saving early if you want to get the most out of your money, as cars are probably not going to get any cheaper as time goes on.
On top of this, we’re only a few years from the mandatory switch to electric vehicles, and you’ll want to be on the lookout for these eco-friendly vehicles before they become unavailable at a reasonable price.
Understanding the costs
When buying a car, you’re not spending only the purchase price, but a whole lot more, as owning a car is a responsibility, and it’s not a cheap one.
An important thing to look into when purchasing a vehicle, especially if you’re buying used vehicles, is the car’s gas usage, as it’s the greatest expense you’ll have while owning it.
Right after that, you’ll want to look into the prices of the spare parts and the repairs that the car may need after you’ve purchased it, which isn’t the case for new vehicles.
That being said, the price of a new car is often not justified by its consumption or any potential repair costs you may encounter down the line, and you’re almost always better off buying a used vehicle rather than getting one straight off the production line.
Leasing or buying
If you absolutely need a form of transport but can’t afford to actually buy a car at the time, leasing is always an option, and this is particularly popular with those looking to be driving the newest models a brand may have to offer.
Of course, this does imply that it will essentially cost you more than it would to have just purchased an older model yourself, which doesn’t remove the option of leasing an older, used vehicle instead.
The downside is that leases often have a mileage restriction as a way of retaining the car’s quality for the other customers, so you may want to look into a car loan instead.
If your credit score allows it, a car loan is one of the best ways to finance purchasing your first vehicle, provided you’ll be paying the interest rates until you’ve paid off the entire loan.
Trade in your current 4-wheeler
Many car dealerships will offer to cut down the price of a vehicle by a margin if you offer them your current car instead.
While this doesn’t sound like much, it’ll spare you the hassle of trying to sell it yourself, although you should consider that you’ll be getting much less value for your current car this way.
Do note that most dealerships will become much less flexible on a car’s purchase price when a trade is involved, as they’ll also have to sell the car you’re trading in to turn a profit.
Of course, this takes the responsibility of filing any paperwork tied to the purchase off your back, giving you more time to enjoy driving your new car without having to worry if your old one will be sitting in the garage for years before it’s finally sold.
Bottom line
Financing a car can be tough, especially for younger people who’ve just started their careers, as they’ve got a number of other expenses to deal with every month.
Thankfully, with the help of car loans and leasing, everyone can gain access to a form of transport without having to put down tens of thousands of dollars for a used vehicle.
