ext_36666 ([identity profile] lsl.livejournal.com) wrote in [personal profile] dancerjodi 2014-05-15 04:30 pm (UTC)

My standard advice when thinking about buying a new (or new to you) car, is to start making the car payments now (into an account set aside for your new car) and keep driving the one you own until it no longer makes sense to keep it. "No longer makes sense to keep it" might be the next time it needs a costly repair or if it gets unreliable enough that you are no longer comfortable driving it. Or you have found the next car you want to buy and are ready to make the change.

In the mean time you are used to making the payment already and you may save a substantial chunk of the new car's price allowing you to save money by taking a shorter loan term (or maybe even pay for it outright).

It is almost always more cost effective to continue driving a car you own outright (even factoring in worse gas mileage and some repairs) than to buy a new car.

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