Need a New Car on a Tight Budget?
With inflation and the prices of everything going up so quick these days, many are living on a tight budget. Cars don't last forever so you're eventually going to have to replace or fix it at some point.
Many of us need our cars for work, school, or other activities, so it would be very difficult to go about our daily routines without one. If you ever find yourself in a situation where you need to replace your car, but you don't have the budget for it, here are a few things to consider.
If you live in a big city, you should consider a combination of public transportation, ride-sharing apps like Uber and Lyft, and short-term rentals for things like weekend trips or specific needs.
Here are the most popular short-term rental options:
This combination will allow you some flexibility while keeping your transportation costs to a minimum. In addition, you won't have to pay for car insurance and can start saving some money each month to put towards a replacement vehicle.
Fix Your Current Car
If your current car is less than 10 years old and doesn't have more than 125,000 miles, then it's usually cheaper to fix problems rather than replace it with a newer one.
If you don't have the funds to pay for a repair, you can try to get a small loan from your bank for a "fix it" loan, or try borrowing money from family or friends. If the repairs cost more than 40% of the value of the vehicle - and especially if the repairs aren't guaranteed to fix the problem - then you'll need to consider replacing it.
Buy a Reliable, Used Car
If you really need a replacement vehicle, your best option is to buy a compact, reliable, and fuel-efficient used car that is at least 4 years old (but not more than 7). Vehicles go through maximum depreciation in the first 5 years, so you'll basically be purchasing a vehicle in which the previous owner has paid the bulk of the depreciation cost.
At the same time, the car won't depreciate as quickly while you own it. There are several good, reliable used cars you should be able to buy for less than $10,000. Older Hondas and Toyotas are usually your best bet.
Leasing can be a good choice IF you have a stable job and know for sure that you can make the payments. Breaking a lease is very expensive, so don't even consider this if you're unsure about your future income. However, if you are financially stable - and especially if you know you'll be doing better in a few years time, then leasing can be a decent choice.
Some manufacturers offer special 24 month lease deals as low as $199 per month and I've even seen some car leases as low as $99/month (although very rare). These are on base-level sub-compact models, so don't expect anything nice, but they will give you reliable transportation at a very low price (if you have excellent credit).
Each week, I'll keep you up-to-date on the latest car deals and news that might affect your purchase. This includes...
- Best Rebates, Incentives, and Lease Deals
- Latest Car Buying Scams and Tricks
- The Best & Worst Time to Buy a Car
- Which Cars You Should Avoid