Wednesday, December 9, 2009

What type of car should I get?

Post by David Held

One of the most important burdensome financial decisions that you will have to make is purchasing a car. Now, the questions that arise are what type of car should I buy, should I buy it or lease it, and should I purchase an extended warranty with the car?

TYPE OF CAR: When deciding what type of car you should buy, you first have to access how much you are willing to spend. After figuring out your budget you have to consult what are your needs in a car. Do you need it to go to work and back, weekend mobility, for your child to go to school? Then, finally you have to look at the location that you reside in. If you live in Florida you do not need four wheel drive, but if you live in Vermont you need four wheel drive and maybe even an SUV for ground clearance issues.

LEASE OR BUY: Depending on your money situation is how you make a decision on whether to lease or buy. Most people do not have a lump sum of money to throw down for a car, so leasing will not cripple your financial position. Buying increases your assets (net worth), but once you go over your factory warranty, the costs of repairs can be burdensome.

Extended Warranties: If you lease for a modest amount of time (39 months or less), there is no need for an extended warranty. If buy a car and plan on having it for a while, you should definitely look for extra warranties for your car.

Sources #1, #2, #3

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