A Major Obstacle to Financial Freedom: New Car Purchases

Purchasing and financing new vehicles every few years is one of the main obstacles to becoming debt free and experiencing financial peace and freedom.

The lifestyle of today's average American family makes owning at least one automobile a near necessity. However, the majority of new automobile sales in America are made because of the buyers' wants, not needs. Often we are just tired our cars; they look old and out of date or maybe our neighbors or coworkers have bought new cars.

Many families in America will buy new cars they can't afford and trade them long before their utility is exhausted. If you buy a new car, keep it for less than four years, and then trade it for a new model, you have wasted the most money due to depreciation. If you have financed the cars, you have wasted even more money.

Sadly, few Christians seek God's direction and His will concerning the purchase of automobiles, and many times families suffer later due to the added strain placed on the family finances.

The following are some guidelines for purchasing and maintaining an automobile.

Saving on Vehicle Purchase Costs

1. Evaluate the reason for trading. Is it a need or simply a want?

2. Become an informed buyer. Do the necessary homework before shopping for a car. Check with Consumers Reports, friends, family, and a trusted mechanic.

3. Can the existing car be repaired without great expense? If annual repairs are costing more than the car is worth, it might be time to get another car.

4. Does the car have in excess of 200,000 miles? If not, chances are the present car still has some remaining utility.

5. Is a new car a need? Will a good used car fill the need just as effectively?

6. If at all possible, do not purchase a replacement vehicle if money is still owed on the present car. If money still owed on the present car, both the present car balance and the new car have to be financed, and probably at a higher rate of interest.

7. Pay cash if possible. Otherwise obtain a loan outside of the car dealership, where you can most probably get a significantly lower interest rate.

8. Do not trade in your present car. Sell the present car privately; then buy the new/newer one.

9. Do not be pressured by sales tactics. Know how much you are willing to spend and stick to it. Also check Emunds.com to know the true market value for vehicles in your area.

10. When buying a new car, avoid buying a new model when they first come out.

Saving on Vehicle Maintenance Costs

1. Learn to perform routine maintenance: oil change, lubrication, and tune-up. Repair minor conditions personally and immediately. If a mechanic is needed for repairs make sure the mechanic is qualified, trustworthy and honest.

2. Wash cars yourself. Both automated and service operated car washes are expensive. If $5 per week is spent to wash a car, you can save $260 per year if you wash the car yourself.

3. Use a written maintenance chart for every car and attend to routine maintenance diligently. Regular maintenance usually will dramatically increase the life of the car.

4. Check the car's gasoline rating and use the cheapest grade of gasoline recommended.

Saving on Auto Insurance Costs

1. Get insurance estimates for the same coverage from at least three major insurance companies before purchasing. Consider choosing an insurance company that gives a multi-vehicle or multi-policy coverage discount.

2. Always select bodily injury liability, property damage liability, and personal injury liability coverage. However, if owners can afford to repair the car in case of an accident, collision coverage may not be necessary (most finance companies demand full coverage, including collision and comprehensive on automobiles that they finance).

3. If collision is chosen, a higher deductible will decrease monthly premiums.

4. If comprehensive is chosen, a higher deductible will decrease monthly premiums.