So it’s getting close to time to replace the vehicle. What is the game plan?
Like many individuals, I don’t look forward to the time when it’s necessary to replace a vehicle. A recent trip to the mechanic came back with the diagnosis of the car as “needing some tender, loving care”.
We’re prepared to provide the care it needs for now while coming up with the plan to purchase another debt free vehicle. Therefore, it’s time to decide:
- how aggressive the budget will need to be based on our timeline
- what type and class of vehicle will satisfy us both
Dependable, reliable and enjoyable is the plan. We’re able to keep our cars for longer periods because we research them up front. We expect our vehicles to hold up for a minimum of a decade without needing engine, transmission or other major work. This plan has worked out well my entire life so I will continue to work it!
One of our current vehicles falls in the European luxury class. Although very reliable, cost of ownership isn’t for those with restrictive budgets! If considering one for your own vehicle, keep in mind that luxury maintenance goes along with the luxury vehicle for its lifespan.
I used to think, “the older the vehicle, the less expensive the maintenance”. I am now fully aware that the service department at a car dealership makes the most revenue and has the largest profit margins. Dealerships sell cars in order to finance them and service them.
So, if you’re in the market for a vehicle, let’s talk this through.
First, set a target maximum and stick with it. Anticipate all costs that are part of the purchase. This should include every fee, tax, etc. Keep in mind all the extras and fees when setting or negotiating price.
Second, get insurance quotes beforehand for the potential vehicle of your choice. This will need to be a second budget item. NOTE: I recommend paying 6 months or an entire year in full up front and be done with it.
Next, review how this choice in vehicle will affect your monthly spending plan. Do you like how the numbers fit within your current budget? Do you need to increase your monthly expense estimate for maintenance/repairs because the tires on the new vehicle cost almost double since you moved up from a compact to an SUV? Are the oil changes pricier because you now need synthetic or you’ve decided to go luxury instead?
I can tell you that when you invest the necessary time up front, it will free your mind and your money on the back end. All that’s left to do then is enjoy the ride.
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Brandon and Gina Wilkins are financial coaches and co-founders of Financial Freedom Builders LLC. Mr. Wilkins is also the author of the financial classic, Getting Rich is Simple...But It Ain't Easy! They are available for coaching, workshops and seminars designed to help you take control of your finances.
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