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As your family grows, you will need to make certain changes in your lifestyle — like saving for college, getting a bigger house and adjusting your work schedule to accommodate after-school activities. Buying a car is likely to be one of these changes. You may find that you need a different car so you can participate in carpools and family events, or that you simply prefer a safer vehicle. Read on for things to consider when purchasing a car for your growing family.
Buying a car: Financial options
One of the first things you need to think about when buying a car to accommodate your growing family is how you are going to finance it. You also need to ask yourself how long you plan to drive the car.
If you have a considerable amount of money in savings, you might want to buy your car with cash. That way, you don’t have to pay extra money in interest or finance charges. But if you decide to pay cash for the car, be sure that you don’t totally clean out your savings. You should leave yourself extra money in case of an emergency.
If buying a car requires you to take out a loan, do some research on interest rates and see if they are rising or falling. If rates are rising, you might want to get pre-approved for a loan so you can take advantage of rates before they spike. On the other hand, if rates seem to be falling, you may want to look into adjustable rate loans or variable rate loans. Remember that putting money down can lower your monthly payments, which can help you stay within your budget. Regardless of what you decide about a car loan, you should be sure that the life of your loan won’t last longer than how long you plan to drive the car. Otherwise, you might end up having to sell the car for less than you owe on it.
New car, new costs.
There are some other implications to buying a car that you should consider. If you are buying a bigger vehicle, like a van or SUV, you might need to adjust your monthly budget because gas will probably cost more than it did for your smaller car. Also, your insurance rates might increase because your car will probably have a higher value. If there are improved safety features, however, they might offset the added cost and you may not see an increase. Call your insurance agent to find out. This is also a good time to reevaluate your insurance and research car safety ratings so you can get the best car for your family at the best price.