Should you buy a new car ?
CALLOUT: I am not sponsored by any car company (but I wish I was :P ) promoting sales. I was propelled to write this article after watching tons of Utube videos and reading articles where the central theme/idea is buying a car is not a financially sound decision. My reasoning to buy a new car is totally personal but I have some solid reasons to support it also I have gone from being a car owner to no car to car owner again, so I have experienced both sides for long periods of time.
Reasons why I bought a new car:
CANCELLED: I live in the Tech capital of India(Bengaluru) where every morning I would get ready at 8.30 am, book a cab (ola/uber) and on a every lucky day the cab will come but unfortunately most days it would be 3–4 cancels then driver would come after lot of phone calls and text messages. By the time I sit inside the cab I would be already a bit exhausted and annoyed.
Safety: Although this was one off instance but this also cemented the fact I have to buy a car. Midnight had to rush to the hospital for my kid, the driver almost hit a broken wall near construction site, I screamed loud enough to alert him in time and he somehow managed to miss it.
COVID times: Well with what happened with this invisible thing that created havoc in our lives, I am glad I bought a car before year 2020. It was easy, hassle free and tension free way to move around only when the need raised to go out, today we are in 2021 but I still have doubts about travelling in a cab.
Cleanliness: Although most of the cabs are clean but there are many times during rush hours where you get a cab which smells like hell. You don't have much of a choice but to go with it.
But things to remember before purchase:
Buy less than what you can afford: In todays consumer driven economy buying any dream car is few clicks away with easy loans offered by banks. My thumb rule would be to buy a car of value (based on road price and not ex-showroom price) somewhere between 50–55% of the annual in hand salary. If you cant fit in then better wait or buy a second hand car(personally I will wait to buy a brand new car).
Down payment -Loan ratio (30%+70%): Ideally if its 100% cash nothing like it as no interest to be paid but as we know most people cant, so at least make sure the down payment is minimum 30% or more.
Car for life: Although it rarely happens but one should treat it as one car for the entire life the idea is not keep buying better version cars in every 4-5 years because surprise! surprise! there will always be better cars in terms of looks and technology than the one that you own right now. Drive this car for as long as possible but again it depends case by case because it might happen buying a new one makes more sense.
Conclusion:
Buy a new car that you can afford without hampering your financial well being. In an ideal world I would want no personal vehicles but well connected rail networks: fast and reliable where commute is hassle free. I do believe how we commute will change in next 30 years to almost sci-fi movie like as people like Musk are working on projects like hyperloop which will make travelling like the way that we cant even imagine today.
