choose a car that will hold its value and has low maintenance and insurance costs.
My family is in the market for a new SUV. Our 2008 R300 Mercedes Benz has done an admirable job for our family: It is AWD, has a third row, is super comfy and is an absolute beast on the highway. However, it has reached my standard goal for a car of 160k miles and 10 years old. Combined with the fact that expensive things are starting to need to be repaired… its time we move on.
Next to purchasing a home, buying a car is one of the biggest personal financial decisions you will make. Given that, I am incredibly calculated when it comes to car buying and want to share the process I go through:
Josh’s Financially Sound Car Buying Process
1. Trade In or Sell Your Existing Car
2. Set A Budget
You need to have a firm budget with a clear understanding of how much you can comfortably afford. A car is not worth the financial strain of sleepless nights over high payments. Decide how much you can spend on a car and how you’re going to pay for it. We determined our budget for this car purchase is $40,000.
3. Define Your Car Requirements
Here are our requirements:
AWD for family safety
Either Japanese or American badge, for value, ease of repair, supply
Not a European badge, because TCO is generally higher, with a higher starting cost. ( We already have one European car in the family.)
A car that is 1-3 years old, so that I do not pay the new car premium