5 Questions to Answer Before Buying Your Next Car

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Source: http://www.flickr.com/photos/kimberlygauthier/

Source: http://www.flickr.com/photos/kimberlygauthier/

One popular question consumers ask themselves before purchasing a car is: should I purchase a new or used car? It’s true that a new car will often depreciate as soon as you drive it out of the dealership, and will then lose 15-20 percent of its value each year. If you plan to keep your car for many years and maintain it well, then you might be very happy purchasing a new car. From a financial standpoint, this is a great time to purchase a new car because interest rates are low. On the other hand, if you like shiny new things and you prefer to trade in your car every few years, then you should consider leasing.

Although you will want to decide whether to lease or buy your next car, there are several other important questions that you should ask yourself. Here are five questions to consider before you decide whether to purchase a new or old car.

1. Can I Survive Without a Car?

This may seem like a pointless question since 95 percent of American households own a car, and 85 percent of of Americans drive to work. Currently, only 5 percent of Americans use public transportation to get to work, while the rest usually drive themselves, carpool, bike, or walk. However, for people who live in a big city, it is often easy to survive without a car. Currently, only 50 percent of people living in New York City own cars. Obviously, New York City has alternative transportation choices that make this possible, but don’t automatically assume you can’t exist without a car. If you live within walking distance, you can walk to work.

Although you may need a car to buy groceries, go on trips, and so on, you may find if you complete a budget that you are better off renting when necessary. You might also find that sharing a car, or changing from a two-car family to a one-car family is a possibility for you. If you live somewhere warm, you could also consider a scooter or motorcyle, both of which would save you money on the initial purchase price as well as gas prices.

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