In recent years, it seems that a lot of people, especially those who live in big cities, are feeling the pinch of an increasing cost of living. Consequently, more young people shy awayfrom buying expensive assets such as automobiles. In part, this may also be due to the financial independence and general know-how required — a tough challenge for anyone whose top priority is usually paying off student debt.
Yet once you have achieved a certain level of financial stability, owning a car is a significant milestone with many benefits. All-around convenience and a greater range of travel and access to more lifestyle options are among them. After that first purchase, the question eventually becomes one of owning a second car. How do you make this decision?
Run a lifestyle check
Being a responsible car owner isn’t for the faint of heart. You need to take care of your ride, go about routine maintenance checks, and attend to any urgent repairs. Now, imagine doubling that effort required. Even before weighing on the financial aspect of buying a second car, you can see that it’s a pretty big commitment.
Car repair equipment such as automotive hoists or home storage lifts can allow your garage to house more than one vehicle, but beyond the question of storage space, how does it fit into your lifestyle? Is this going to be an all-purpose family car, an all-terrain SUV for your off-roading hobby, or a gift for your oldest child, so they can enjoy more freedom while learning to handle greater responsibilities?
Run the numbers
Once you have established the real purpose of buying a second car, it’s time to do the numbers. This isn’t only about shopping for the best features relative to price or looking for the best auto loans available. You may still be making monthly payments for your first car; then, on top of that, you’ll have to pay for gas, parking, insurance, and maintenance.
Make detailed calculations, so you’ll be better prepared for the financial shock of owning two automobiles; you may even realize it’s not worth the outlay. For instance, buying a second-hand car with a superior fuel economy may save you $150 a month on gas if you drive often. But weigh that against the recurring upkeep costs, and you may lose money on the whole.
Buy on the low end
Excluding certain sought-after vintage cars, you can be certain that an automobile’s value will only depreciate over time. What you paid for in the beginning is a cost you can’t recoup, which you could otherwise set aside for investment or an emergency fund.
It may be possible to justify buying a second car if you’re willing to scout the low end of the market — not just second-hand vehicles (which may still be in good enough condition to command a high price) but the so-called ‘beaters.’ When your extra ride is a beater, you can duck the commitment to a hefty car loan. You pay less on insurance, taxes, and the purely cosmetic aspects of maintenance with a beater car that meets much of the basic functionality you’re looking for, like giving the whole family an additional means of getting around the city.
Given the uncertain state of the economy in recent times, buying a second car shouldn’t be something you do on impulse or gut feel. Weigh the functional reasons versus the financial impact, and be open to buying on a budget for practical savings and reduced opportunity cost.