This is a statement that I hear every day. You've had your car for 6 years. You paid it off and have the title tucked away at home. Now driving is free right? Maybe not. Here a few things to consider:
-Does old Bessie need maintenance? New tires and brakes will cost you close to a thousand bucks but you need them to be safe.
-What about unexpected repairs? It seems like any air conditioning repair is at least $500 and have you looked into the price of transmission overhauls lately? Thousands. Most of the time, you can't make payments on these repairs. That means you either have to dig into savings, put it on plastic, or hit Mom up for a loan.
-Fuel savings. If your 6 year old car is getting around 16 MPG and you switch to a newer and more fuel efficient vehicle that gets 25 MPG (not unreasonable at all), it saves you about fifty bucks a month.
-Warranty. On most new cars, the first 36,000 miles or so are covered under the manufacturers warranty. This really covers almost everything except for maintenance items. You can even finance a maintenance policy so the only thing you have to pay for is gas!
-Tax savings. In 2009, you can deduct the sales tax paid on a new car or light truck when you do your tax return. I am not an accountant, but it would be worth while to talk to yours about this.
I'm sure that anyone can poke holes in my theory that anyone who drives makes a "car payment", but it sure would make good financial sense to put a pencil to it. In addition, new cars are way more fun to drive!
If it makes sense for you, please consider Plantation Ford. www.plantationford.com
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