I mentioned before that if you can skip out on car loans, you can instead put that money to good use for other financial goals, including investing for your retirement. Now I wanted to help out by sharing some used cars that you can buy with money saved that have a track record of reliability. I also want to highlight how looking at total cost of ownership can keep more money in your hands and give you more options financially and otherwise.
Reliable First Cars
There are several sources you can use to find a reliable car. One of my personal favorites is Consumer Reports. Every issue they review different car models and once a year they have a through special all about cars, both new and used. In fact when I was checking out this year’s issue for our own car hunt, I found affordable and reliable used cars, you should consider for your next buy:
- Acura TSX
- Ford Fusion
- Honda Accord
- Honda Civic
- Hyundai Sonata
- Mercury Milan
- Nissan Altima
- Subaru Impreza
- Toyota Camry
- Toyota Corolla
- Toyota Prius
Depending on your budget, you may have to look for an older (but gently driven car). While looking by year made allows you to get some of the latest features, don’t forget to look at actual mileage on the car. A car with lower miles can be a better deal than a newer car, especially if the owner was meticulous.
Operating Costs for Your Car
When you get down to the last few cars, they may seem to be too identical to distinguish. That situation can make it difficult to decide which one to buy. That’s when you need too look at how much the car will cost you year by year. Basically you need to look at 3 factors before making the final decision:
- Gas costs: No one can predict the price of gas over the next year, but looking at history and at recent events one can assume that prices will increase. That means your potential car’s gas mileage is bigger factor. Don’t get an SUV because you want it. Choose a car based on how you’re actually use it most of the time. You may find that a smaller sedan is great for your day to day activities and will cut your gas fuel ups in half.
- Insurance costs: Before you buy a car, give your insurance company a quick call and get an estimate of the premiums. You may be surprised at how much it can be. At the very least you can use the chance to see if your company is still offering competitive rates.
- Maintenance costs: Using sites like Consumer Reports and Edmunds can help you decide if you can expect to have a ton of repairs in your future.
When you look at both the upfront and long term costs, you’re helping yourself save more money. That money saved can be used to fund your next car or you can use it for investing.
Thoughts on Buying a Car
How many of you plan on buying a car some time this year?