You've just made your last car payment. You're debating on whether you should keep your car or trade it in for a shiny, brand new vehicle. Braxton Automotive recommends keeping your car rather than buying a new one, especially if you are trying to save money.
Most people who pay off their vehicles, treat them as valuable investments and keep up with their regular service maintenance. This results in saving a lot of money.
The most common maintenance procedures and repairs to keep your car operating safely and reliably while maintaining its long-term value involve checking the oil, filters and fluids, the belts and hoses, brakes, tires and air conditioning. Braxton Automotive also recommends an annual mileage interval service.
Over a four-year period, the difference in the savings between keeping a car and buying a new one is $10,894.
Here is a break down of the expenses of keeping a 6-cylinder, 4-door sedan that gets 21 miles per gallon and costs $19,727, versus buying a new 6-cylinder, 4-door sedan with 23.5 mpg that costs $23,451 and had a down payment of $10,158, the trade-in value of the older car.
At the end of four years, expenses on the used vehicle, including fuel, license, registration, taxes, insurance, maintenance and tires, were $16,548. A resale value of $3,759 puts the total four-year cost at $12,789.
On the new car, expenses including the car payment, interest on the car loan, fuel, license, registration, taxes, insurance, maintenance and tires, totaled $32,258. A resale value of $8,575 puts the total four-year expense of the new car at $23,683.
Therefore, if you want to save money, you need to hang onto your current vehicle rather than buy a new one every few years. As long as you maintain your investment properly, you will have spent every dollar wisely and saved so much in the process.