Questions To Ask Yourself about Car Ownership

by Adam on January 31, 2012

The following is a sponsored post with a very worthwhile message that I’m proud to share

If you’re just starting out in the world, beginning your financial life, it’s likely that you’re looking to get a car.

Buying a car is a pretty ‘normal’ thing to do for many 20 somethings -after all, you’re an adult and you don’t want to have to rely on others for your transport needs.

Unfortunately, car ownership can be surprisingly expensive, and whilst you could be justified that it’s a necessary purchase, it’s important you walk into the deal with all the facts.

The Reality of Car Ownership

With the exception of student debt, a car loan is often the first major debt that young people beginning their careers sign up for: it’s very common to use financing and focusing only the monthly payment rather than the total cost.

But carrying debt can be surprisingly costly and who knows what might happen in the future when it comes to your job.

The cost of car ownership is further compounded by the fact that car valuations can quickly fall leaving you potentially owing more than the car is worth if you are forced to sell.

Car Insurance – Important considerations

Car insurance is another cost that comes with car ownership. But whilst it will always be a significant cost, there are also great ways to save money on your car insurance. For example, by shopping around (it’s a competitive market!), and taking advantage of your situation to lower your premiums like looking to women-only insurance providers for lower premiums if you’re gender-advantaged (!) or considering multi-car savings if you have more than one car.

Saving money with a multi-car policy is no joke!

 

Ultimately when it comes to car ownership you need to make sure you are making CONSCIOUS decisions rather than sleep-walking into an expensive commitment.

Ask yourself these questions:

“Do you need a car now?”

Is the personal freedom today worth the financial burden and will your car payment commitment stop you from growing your pennies for your future?

“Is having a car at this stage of my life really worth it?”

Deciding to wait a little while for a car can mean the difference of tens of thousands of pounds considering how much the pennies you save in your 20s will grow in value over time.

“Is driving an older car a better choice?”

You don’t need a shiny new car to enjoy the crazy adventure of early adult life. Not having a car payment (or a very low one) allows more flexibility to travel, visit friends or simply save for other things like a down-payment on a house.

“Can I get cheaper car insurance somehow?”

Having an older car will lower your insurance premiums and if you have more than one car in your household you can save even more with a multi-car policy.

Making smart choices really will pay off in the future so get your thinking caps on and start asking these questions to yourself today.

Conscious spending at the beginning of your financial journey really can have a Magical impact when it comes to growing your pennies.

Good luck!

{ 3 comments… read them below or add one }

Chris Gold

I’ve always seen owning a car as a bad investment. Luckily I didn’t get ahead of myself when I bought a little Volkswagen Golf years back. That said, cars depreciate in value so quickly and there’s always unforeseen repair costs as well as everything mentioned above. There’s definitely a need to think it through a bit before buying a shiny new burden.

car valuations

Through this post a very worthwhile message is passed to those wants to buy a car. Nice work done with good sense of humor….

Bry

Hi Adam,
Just wanted to add a perspective from a 20something who needs a car for work and who has had an old second hand car and a brand new sparkly one. My old second hand car ended up costing me about the same per month when I averaged out its outlay cost, higher road tax (less efficient), MOT and the horrendous costs of fixing it after an MOT fail. Turns out its pretty much the same as what I now pay per month for a brand new car, including all servicing parts and labour. Car maintenance is terrifying when you haven’t got a lot of spare cash and getting a new car takes away that risk and makes budgeting a lot easier.
Thanks!

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