How much money would you say you’ve put into the car that you’re driving? If you’re approaching 200k miles, it may be time to consider setting your sights on something new. Most cars life span starts to end near 200k, and if you’re sinking more money into your vehicle year after year – you may be well over-due for a new car.
Let’s think about this… are you realistically saving anymore having to do repairs on a car that is too old to be classified as safe or eco-friendly? Does that car give you good gas mileage? What about the safety features and the emission? Does it meet the emissions requirements? Take a moment to reflect on the following reasons why its probably time for you to trade up and retire old faithful.
Repair Costs – Are you paying more and more to fix your current car every year? You can be the best car owner, with the most timely maintenance schedule, but eventually parts fail, one after another. Most likely if you find yourself having to replace the transmission and do other major repairs, you most likely will find other major problems will follow. Do you really want to continue to give that 12 year+ car a make-over? Aren’t you ready to trade in for something that is more gas efficient and offers more safety features? Don’t feel that you have to rough it! Newer, luxury, safety features aren’t just reserved for “fancy” cars anymore. You can stay practical and look at some moderately priced cars that also offer features that are available on the more high priced cars.
- Age & Efficiency – Okay so maybe when you bought the vehicle it was efficient but as time goes on it also wears on your engine and as an engine ages it stops achieving the MPG it was originally advertised at. And as gas prices get higher this is something to weigh in on. You could graduate to a new car that goes further on less, and provides you perks, like a more advanced transmission that expels fewer carbon emissions. Better for all and especially our environment.
- Safety – Though we like to imagine we’re the greatest drivers the roads have ever seen, everyone and anyone can make mistakes. Newer cars have the structure and advanced steel architecture that absorb the impact of a car crash better. Vehicles now have to ability to sense collisions before they happen and alert you of approaching objects within its frame of monitoring.
With better airbags and even back up cameras for what used to be impossible blind spots, you can feel safer and more secure knowing you have back-up protection. Many new cars are offering this as standard equipment – but if it is not standard, it is a highly recommended feature. When backing up or out of driveways or parking spaces, you can see exactly what is behind. It never seems to fail, that as you start to back out of a parking spot, an oncoming car approaches or someone starts to walk behind your vehicle. With the back up camera feature, you can immediately see if an oncoming car, a pedestrian, a child or an animal is approaching or behind. Many cars today will also stop the vehicle when an object is detected, saving your from a horrendous accident.
Now you are ready for a new car? Should you Lease or Buy?
This has been an age-old debate…should I lease or buy? That could depend on a couple of factors: Do you drive a car for years and drive more than 15,000 miles per year? If so, leasing may not be your best choice. If you are a person that would rather own than lease…then you may have to save for the down payment and get ready to have higher monthly payments for your new car purchase. If you don’t have the cash outlay for a down payment of 20% of the purchase price and you have good credit, and don’t drive more than 15,000 miles per year, you might want to consider leasing your next car.
If you drive less than 15,000 miles a year and would like a new car every 3 – 4 years, you may want to consider leasing. Most lease agreements require the first, last and security deposit to drive the car off the lot. However, when considering a lease or buy, you should do a little homework. Set a target price of the car you are looking to buy or lease.
A leasing contract will refer to the “capitalized cost” of the vehicle. Remember, what you want is the lowest possible capitalized cost and the highest possible residual value. You want to lease a car that retains more of its value over the term of the lease. If two cars cost the same, you will most likely pay less to lease than one that depreciates less. Also, some of the best leasing deals are made at the end of the model year, because dealers want to clear their lots to make room for their new models. If you do your homework before setting out to buy or lease a car, it will help in your negotiating with the dealer. It is especially good to know if there is much leeway to negotiate a residual value that is more favorable to you. Arm yourself with these figures before you start out car shopping.
When you’re leasing, look for the most favorable relationship between the cost of the car and its residual value. Remember low cost, high residual.
Mileage is very important when leasing. The norm is between 10,000-15,000 miles per year. If you go over the specified mileage that is documented on your leasing contract, you will incur mileage charges from .10 to .40 per additional mile. This can get very costly, so see if you can negotiate higher miles, even though you may have to pay a few dollars more a month. If you think you will go over the mileage cap designated in your lease agreement, it is recommended that you pre-pay for the additional miles at the time of signing, because it’s typically cheaper to pre-pay rather than to pay at the end of the lease.
Of course when you buy, there are no rules on mileage, the car is yours to drive as little or as much as you like.
Gap Insurance When Leasing
Also make sure when signing a lease that the contract includes “gap insurance.” You definitely want to have this. Why? Let’s say at the end of your lease, the residual value is $15,500, but in reality, the car’s actual value is $10,000. Here is why gap insurance is important. If you wreck the car a few months before your lease expires, your insurance company will pay for the actual value of the car and not the residual value that was in your lease contract. That means you will be responsible for paying the dealer the difference of $5,500. Of course, we hope that never happens…but better to be safe than sorry…check for the gap insurance.
So, head out to your nearest retailer armed with the knowledge you’ve gained and shop for your next set of wheels with the newest safety, gas efficient, comfort designed features the vehicle has to offer.
Nothing like the smell of the inside of a new automobile!
Courtesy of: 50 Plus Report Editorial Team
Source: Consumer Report, Kiplinger.com, truecar.com