Cars

Can I Afford a Brand New Car?

The idea of buying a brand-new car can be a real dream for some people. Having something that no one else has owned that is so new can be so appealing and many people cannot afford to contemplate this and so always have to go for a second-hand car. A brand-new car will lose value as soon as you drive it away from the dealers as the fact that it is new means that more is charged for it. So, if you sold it the day after it would be worth at least a few thousand less. However, this is not enough to put many people off their dream if a new car but the cost is.

The cost of the car

A new car will be a lot more expensive than a second hand one. However, that cost will vary between models. There are some new cars that are cheaper than second hand ones; it all depends on the specific model that you want to buy. If you just want a new car and are not that fussy which type then this could mean that you could just buy a small one and achieve your dream. For some people, even a cheap car is out of their budget or they want a specific model which is more expensive.

Even so, it is worth comparing prices of cars and making sure you get good value for money. Some dealers may give you a better deal than others and you will need to think about whether you want extras on the car and how much you might be prepared to pay for those.

Finding a way to afford it

If you have savings then you could put these towards the cost of the car. It might even be sensible to try to add to them until you have enough to buy it outright. This could take a long time, but it will be a much cheaper option than borrowing the money. If you are really motivated to buy the car, then it should not feel too much of a burden to put some money away each month so that you can save up. Put it in a savings account and it will earn interest which will add to your pot. It is best to set up a direct debit so that money is transferred into your savings account regularly, just after you get paid. Then you will not be so tempted to spend it. This idea may work for you well, but some people may not have had success at saving and may feel it will not work. If this is the case then you need to make sure that you are really determined about doing it. Try to motivate yourself by pinning up pictures of your dream car and concentrating on your goal of owning one. This could help you to leave the savings untouched and make sure that you budget properly so that you can save what you need to.

An alternative option is to get a loan. There are different options for borrowing such as a car loan form a dealer and a bank loan. It is worth comparing both to see how much each will cost you and whether they have terms that will suit you. Consider the price and whether you are prepared to pay more for one than the other. Look carefully at the repayment amounts and think about whether you will be able to afford them. It is so important to check this out because if you do not make the repayments you could end up with your vehicle being repossessed and that would be a very nasty end to your dream. Also, this would show on your credit record so you would have difficulty in borrowing money to buy another one and that could mean that you have trouble getting to work which may even end in you losing your job. So, if you take on a loan that is too expensive you could find yourself in all sorts of trouble.

Conclusion

It is not an easy decision to make, but if you have all the figures in front of you it will help. Make sure you are clear on what your options are and how much each will cost you. Also know the cost of the car so that you can calculate how much you will have to put by each month, either in a savings account or repaying a loan. Whether you save or borrow is very much a personal decision, but it needs to be considered really carefully. It is wise to discuss it with others before deciding on what you will do and they might see things differently and give you other things to think about with regards to whether your preference is the most sensible.

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Loans

Should I Save up for Home Repairs or get a Loan?


If you own you own home then you will be responsible for any repairs that need doing. This can be quite costly at times and some repairs will not be covered by your house insurance. So if you do need a repair to be done, then you may consider whether you should get a loan or wait and save up before you get it done.

Advantages of saving

If you save up then you will avoid the costs of a loan. Loans vary in cost but you can never avoid paying something for them. This means that you will need to find some extra money on top of the cost of the repair to repay it.

As loans are expensive then we may only be able to afford to borrow a small amount. This could mean that we cannot afford to do a good repair. If we wait and save up, we have the opportunity to get more money together and therefore we are able to afford a better job. This might not only look better but it may last longer as well.

A loan can be a burden for some people. Some may stress about having a loan and worry that if they have one it will be always hanging over them until it is paid off. Not all people feel like this but it is worth thinking about whether it will apply to you and if you might be better off saving up so that you can avoid this feeling.

It is really important to make sure that you can afford the loan repayments. It is too easy to take out a loan and focus on what the money is going to pay for and the advantages of that. It is also to remember what will happen in the future and that you will be responsible for finding the money to repay that loan. With most loans you will need to be paying out each month for a year or more. You need to find out how much you will be expected to pay and see whether you will be able to afford this. If you are not sure then look back over previous bank statements to see how much you normal spend and how much you have left at the end of the month and whether you can afford to cover those repayments. There may be alternative loans that have lower repayments and it will be up to you to compare them and think about which will be the best for you to manage. It is wise to also look at the total costs of the loans so you can pick one that is relatively cheap as well. Make sure that you do not borrow more than you need and that you allow for increases in interest rates when you are calculating what you can afford.

Advantages of a loan

It may be that the repair needs to be done quickly. It could be causing further damage and if you do not get it done it could be a lot more expensive to repair in the future. If you do not have the money then a loan can be a very convenient way to get the money quickly and get the job done.

Some people also are prepared to pay a bit more to get work done sooner. They would prefer to just know that it is sorted out and that they need not worry about the repair and they may not worry about having to make the loan repayments.

Conclusion

Although the loan does not have many advantages the fact that the repair may need to be done quickly is a really important one. If it is not done and more damage occurs as a result then you could end up paying out more and this could be a lot more costly than a loan. It is not always easy to calculate this risk but if you talk to those that will be repairing it, they might be able to give you a better idea. Get several opinions though, just so that you are sure and getting several prices is good too as you can think about how much you are prepared to pay. You may not want to go for the cheapest as you may not feel they will do such a good job, but go with the person you feel will give you the best value for money.

If you are saving up then it is still wise to try to save up quickly, even if the repair is not vital. You will feel better once the work is done and if you leave it too long the cost of the work will increase. It is therefore worth having a plan on how you will save. You could start by putting aside as much money a month as you would be if you had to repay a loan. You would have to find those repayments so you should be able to find the money to save as well. If you can, try to put extra in as well so that you can save up more quickly. You may want to try to find opportunities to earn more or to spend less so that you can do this.

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