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Financial advice: Car Maintenance.

Tuesday January 26th, 2021
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Financial advice: Car Maintenance.

Prior to ever buying a car factor maintenance costs.

Tires, brakes, oil changes, premium or regular fuel, and so on can all add up. Buying luxurious cars will cost more maintenance annually.  According to Your Mechanic, over a 10-year span a BMW will cost the average person $17,800 in maintenance, whereas a Honda owner should expect to spend just $7,2000.

7. Lease vs Own.

Is it better to own or should you rent lease a car? A car on a lease can be a great asset if your a business owner with a fleet of vehicles, however, leasing is not ideal for the everyday person. Essentially the word lease is code for “rent.” At the end of the term if you decide to give it back you have no equity in your car some lease terms can be quite binding.

In most cases, owning a car is the way to go. While car is considered a depreciating asset, owning is the best of option. Consider buying 2-3 years used and certified pre-owned. See #10 below.

8. Gas Hacks.

This goes without saying, but have a gas credit card that gives you cash back at the pump. Use it only for gas and on average you should accrue enough cashback to get a free tank every 2-3 months. Check out apps like “Get Upside” or Shopkick that allow you to double down and create more cashback when purchasing at the pump.

9. 50% Net Income Car Purchasing Rule.

As a general rule of thumb, never purchase a car that’s price tag is above 50% of your annual net income. This will help you decide what you can and cannot afford, no matter what the salesman tells you. For example, if your annual take-home pay is $40,000 a year, you should never purchase a car with a price tag over $20,000.

10. Never by brand new.

General finance talk says buy 2 years certified pre-owned cars. Paying for a brand new car will cost 40% more than buying two years used. In fact, a brand new car will drop on average 11% just driving it off the lot.

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