Far more than just a way of getting from A to B, cars and trucks are status symbols through which their owners express their personalities and preferences. But these keys to individual freedom are by no means free: buying a vehicle is one of the heaviest commitments in most people’s lives, second only to purchasing a house.
So – despite all the excitement – it’s important to keep a sharp eye on financial aspects when buying a vehicle in New Brunswick. After all, there’s no point in chasing after your dream wheels if the repayments would leave you without money for gas or maintenance.
Smart Choices Mean Happier Driving
Your vehicle should match your lifestyle and meet your needs. So – unless they meld seamlessly into your lifestyle and budget – leave that snazzy sports car or high-end SUV as an aspiration, at least for now.
With that in mind, here are three crucial questions to answer when picking the perfect vehicle for you – and your budget!
- How much car do you truly need? Seriously… Think carefully about how many miles (or hours) you usually drive on a normal day. Under what kind of conditions, with how many passengers and how much weight? Do you have easy parking? What about weekend activities?
- How much car can you really afford? The real price of a vehicle is far higher than that bargain deal on the sticker. Right off the showroom floor, tax, delivery, and registration must be paid. Then all the regular expenses start to mount up: parking, fuel, maintenance, repairs, inspections, insurance, and licensing. Who will drive the car, and how carefully will they treat it? How long do you plan to keep it?
- How much car can you actually pay back? Although loan and lease instalments are usually fixed for the duration of the agreement, your circumstances may change over the years. Accidents happen, jobs are lost, emergencies crop up, and interest rates on other debts (particularly mortgages) may rise. Over time, your vehicle maintenance and repair costs may soar as well. That’s why it’s wise to leave plenty of headroom in your budget, for added peace of mind.
Payment Options for Buying a Car in New Brunswick
Very few people can afford to fork out hard cash when purchasing a vehicle. The other two choices are:
- signing a lease agreement, paying off only the depreciation over its term (often two to four years) and then either trading in your vehicle for a new one, under a fresh agreement, or buying it out at the end of the lease;
- taking out an auto loan for the full value or against a down payment in cash, with ownership transferred to you once all the instalments are paid off, together with interest.
Avoiding Pitfalls When Choosing a Vehicle in New Brunswick
If you decide to take out a loan, remember that the total cost of the vehicle to you will be increased by interest and possibly other financing charges. Before signing anything, make sure that you fully understand all the implications, for the immediate future and over a longer horizon.
Although extending your loan might seem an attractive option, with more affordable monthly payments, this might not be a smart move in financial terms. With a little bad luck, you could end up with negative equity, owing more on your vehicle than its resale price, while its maintenance and repair costs rise steadily.
Special offers are always appealing, particularly when clearing out last year’s models. These benefits often include a low (or even 0%) interest rate, or a cash rebate. No matter how good these deals sound, take the time to do your calculations (including insurance premiums), comparing interest rates and costs before making your decision.
Remember: You’ll be spending a lot of time behind that steering wheel, so it’s important for you to feel relaxed and confident about your choice.