Financial literacy and awareness are two skills that are consistently being trained and developed throughout this pandemic as aspiring entrepreneurs, families, and your everyday employee is finding ways to cut down on their spending in this new normal. And with economic uncertainty and the risk of layoffs due to material shortage on the rise, it’s only natural that people shift toward a risk-off approach and mindset toward their spending habits.
However, one commonplace advice that we constantly see entrepreneurs and financial gurus emphasize and hammer down is why you shouldn’t buy a car, labeling it as the worst financial decision you could make. But we think this piece of advice needs to be revisited because buying a car isn’t inherently bad, and there are cases when you’re much better off having one than not.
Yes, Buying New Isn’t Recommendable Under These Circumstances.
Of course, it wouldn’t be fair if we don’t recognize the due merit to avoiding the purchase of a new car because these assets immediately depreciate in value the second you own them, so there are many factors you must account for first. Most especially if you’re not in the most fortunate positions and are currently in quite the financial predicament, buying a car can’t be justified by any means possible.
- You Still Have Debt To Worry About: Nobody likes debt, and unless you’re well-off and are experienced at using debt for leverage, you should always pay off your debts first before making any substantial economic decisions. Purchasing a brand-new car while you still have overdue student loans will only add to your monthly recurring payments, and considering that we need all the liquid cash possible, getting a car will just put you in a disadvantageous financial position.
- Your Monthly Income Is Modest At Best: There’s nothing wrong with a modest income, but if purchasing a new car ties down a large portion of your monthly paycheck, then the risk immediately outweighs any benefit you could derive from owning a brand-new daily driver. It’s more financially sound for you to put that money into a high-yield savings account or in your 401k until you have the savings to back for the downpayment on the car you desire.
However, There Are Cases When Owning A Car Is Beneficial
Then again, with all those points laid out, there are still cases when owning a car is beneficial and much better for you in the long term. Remember, we all come from different walks of life and undergo challenges unique to our circumstances, and sometimes those obstacles will be much easier to handle when you have a reliable daily driver.
#1 When Transportation Is A Necessity
Public transportation isn’t as appealing as before, and while you could take an Uber to get to and from destinations, nobody likes taking the risk of being in an enclosed space with a person you don’t know is safe or not. Many businesses and livelihoods rely on interaction and communication, and most of the time, transportation is necessary to enable these things.
- When Your Career Demands Travel: Whether you work in a food-delivery service or as an on-call technician, many careers demand both long-distance and domestic travel. And opting to complete these said jobs through a bike or motorcycle is more tiring and less efficient than a car because it exhausts more energy than needed. As a result, you’re unable to keep to a certain standard of work unless you got a car to drive.
- Everyday Convenience: We all make grocery runs every week, and sometimes we find ourselves needing our fix of coffee every morning, and having a reliable car that’s ready to drive any time is an everyday convenience. Without one, you’re pretty much stuck staying at home unless the shop you were planning to visit just happens to be nearby. So, it’s a quality of life upgrade that makes a lot of responsibilities more convenient to accomplish.
#2 When You Purchase Secondhand
A lot of people put their focus on buying the latest models and fawn over brand-new cars, but there’s a lot of potential value just waiting to be uncovered if you shift your gaze toward secondhand vehicles. Yes, they don’t particularly look the best, but if all you’re looking for is the function of a car that is getting you from Point A to Point B, then there’s no reason that would make a secondhand car a bad purchase.
- Not As Expensive: From dealerships that offer superior pre-owned SUVs to the sedans that just need a bit of loving, the one key takeaway is their unbeatable price point. You won’t need to pay substantial monthly payments because many secondhand cars come at major steals if you put in the effort. Plus, you also help protect the environment by minimizing the waste of these cars going into landfills.
Weigh The Opportunity Costs Yourself
Overall, there’s plenty of things to consider before you can call a car a bad financial decision, so we strongly recommend weighing the opportunity costs yourself before jumping to any conclusions. Online advice can only help you so much to a certain point, but everything after that boils down to analyze your personal circumstances.