Should i spend all my money on a car

One of the best ways to significantly reduce the money you spend on a car is to buy used instead of new. The trick is to buy a car when its value has dropped but its condition remains close to new. In most cases this will mean buying a car that is one or two years old. The information provided is based on current laws, regulations and other rules applicable to Canadian residents.

It is accurate to the best of our knowledge as of the date of publication. Rules and their interpretation may change, affecting the accuracy of the information. The information provided is general in nature, and should not be relied upon as a substitute for advice in any specific situation. For specific situations, advice should be obtained from the appropriate legal, accounting, tax or other professional advisors. All articles. How much should I spend on a car?

Share on. Take your time The most important tip for saving money on a car purchase is to take your time. Call your insurance company Paying down a car loan is just one part of owning a vehicle. Consider the cost of repairs Owning a car often involves paying off a loan, making insurance payments and a third expense: keeping the car in good shape and safe to drive.

Christofer Lloyd Aug 10, Search all car deals. Get started with car finance. BuyaCar finance options. PCP finance vs Hire Purchase. How to get the lowest monthly payments. Search all used car deals. See related. Read more about: car finance. Plus, if you keep your job, you will have a steady source of income. That said, buying a new vehicle is almost always a rip-off.

That's money you just lost and can't get back. Your best value will likely be to buy a vehicle a few years old that has already experienced that instant depreciation. With the money you save, you'll be able to afford a whole lot of maintenance, which may or may not be needed. Is it a bit of a gamble? That's the downside. But if you pay an independent mechanic to inspect a used vehicle before purchase, you'll hopefully have a reasonable idea of its condition.

Of course, the mechanic likely won't be looking inside the engine valves, so they won't be able to see everything. Don't forget, new vehicles can often be a big headache too. For example, according to Toyota, the Toyota Prius is allowed to consume up to 1L of oil every km that's 1. The car dealership isn't going to tell you that sort of thing before you hand over your money. As the new vs.

Although taking out a loan costs additional money over the long run, there is a key advantage of a loan that has not been mentioned in other answers:. Regular payments on a car loan will build positive credit history.

It sounds like you're pretty young, so this could have a significant impact when you're looking to make other big moves in your life like renting an apartment landlords check credit history or buy a house better interest rate. In your position, something to consider, is a year old car with an extended warranty. In general, I don't think extended warranties are worth it, but one scenario where I think they are worth it may apply to you:.

If you are not considering purchasing a used car primarily because you don't want to deal with repair costs, and if an extended warranty enables you to consider it, then it may be cost effective to get the warranty, compared to purchasing new. Note that you can be completely against extended warranties and it might still be rational to purchase one!

The reason is to compensate for other irrational decisions which are more costly. This is not necessarily a bad thing either; car buying often entails irrational decisions. Home buying even more so! I bought the specific car I bought because I wanted a manual transmission, and they are slim pickings these days. I have first hand experience purchasing an extended car warranty despite knowing it was probably irrational to do so. It's similar to home buying vs.

Barring the incredibly rare, new car automotive horror story, you'll have the car for a very long time. If "buying a used car and driving it until the wheels fall off, or until you get sick of it breaking down" is the best idea, why does almost no one who is gainfully employed, with positive cash flow and savings do it not to mention with more than enough savings to buy a new one outright?

I'd bet the authors of answers telling you to go the "purchase a used car and drive it until it dies" route are NOT doing that themselves, and have a car they purchased new, or they lease. You'll need to have a lot of money back for repairs, because repairs are very expensive when you pay others to do them.

You are simply being unrealistic to think you can take an older car and dole money out-of-pocket for every car repair that comes up. What will more realistically happen is you will neglect the maintenance until a repair comes up that you simply cannot afford, and then you'll have to park it or give it up.

Even if you borrow and strain to pay that repair bill, around the corner will be another one that will finish you off. However, the tables turn if you cultivate the skills and tools to maintain the car yourself. You put yourself at fullest advantage by buying a car that is a popular, and b dog simple. Make those your priorities instead of "style" or "features".

And the first priority there is to get a traditional stick-and-clutch manual transmission. Usually the clutch fails, and a clutch change is well within the reach of an amateur. Likewise, manual steering removes two high-maintenance items: the steering gear, and the belt driven hydraulic pump.

Manual gear is simple. I don't know the UK market too well, but just to give a world-relevant example, a Ford Focus might work. One rule of thumb is the fewer things on the fan belt, the better.

The complexity of the engine onboard computer is usually not a concern, since they are exceedingly reliable in most cars. Sensors and actuators are the least reliable part, but they're cheap; the only real danger zone is doing poor diagnosis and concluding the computer is at fault when it's actually a sensor.

Always ask: "which sensor could cause this? Most of the answers are focused on the fact that in your situation you absolutely shouldn't be spending so much on a car and they're for sure correct. But I just wanted to answer what I suspect was your intention in the question: "Should I pay in cash or pay in monthly installments". I would recommend this as you get a fair amount of profit by just safely investing the money for that period while paying the minimum repayments.

Once the interest free period ends, pay off the remainder in it's entirety. Just make sure that you are allowed to pay it off completely and for no extra cost. Also be sure to not use the money for anything else and end up not being able to make a repayment on time.

If you feel you can't do this then you should just pay in cash upfront, you never want to be paying interest when you have the cash.

There are good answers already, let me add one that might seem tangential, but I feel is important, as it is very often ignored. Also note: You say you were saving for 15 months to save GBP. Note that once you get a car, it will take you much longer to save another GBP. And that you'd want another car in years even if you buy new one. Many people don't realize until they do a detailed calculation that even if they were given a fuel for free, their car will cost them plenty there is not only fuel cost, but also insurance, paying damages for incidents, possibility of damage and theft, yearly registration and technical checks, parking and other tickets, planed and unplanned maintenance and repairs, often overlooked and expensive amortization etc.

Update: After your update and comment indicating you really only want it instead of needing it , I would advice against buying any car at this time and especially against buying new one for GBP! Get a taxi for those rare moments you miss a last public transport and you didn't use bike. You say you'd like to move to live on your own in few years - do a calculation - what is cost of rent in your area? How much are your parents covering beside shelter - food, clothing, hygiene, etc?

Even if they are only a fraction of that cost, You should still have a healthy stash before you decide to move out, as you will run into unexpected costs along the way.

Car also has many hidden costs. Probably different in your area, but you should definitely invest some time to investigate local prices for all those components of car full cost, and calculate how much that car would REALLY cost you per month Total cost of ownership! So - calculate cost of living alone, and calculate full cost of a car not just a price of a car and gas!

If not, you will have to give up on one or both of your wants either you will continue living with parents indefinitely, or you will not have a car until you get a better paying job. Excellent point. But if you get a very low-interest rate, you could probably finance the car and make more money by investing the cash instead of using it to pay for a car.

A car is a depreciating asset which means its value is constantly dropping. It only makes sense to start considering a car loan as an option when you have the cash available to pay for the car you want, but you feel like you can find a better use for that money that is worth paying the interest on the auto loan. Sign up to join this community. The best answers are voted up and rise to the top. Stack Overflow for Teams — Collaborate and share knowledge with a private group.

Create a free Team What is Teams? Learn more. Ask Question. Asked 6 months ago. Active 5 months ago. Viewed 13k times. Now I need a car. So I decided to go for a new car. Would you purchase a car in that manner? What do you think would be money wise here? Improve this question. Jason Krs Jason Krs 1 1 gold badge 2 2 silver badges 8 8 bronze badges.

That costs money Paying from your savings is a very good idea. Paying this much of your savings on a car is very much not a good idea. Also, take a moment to think about how steve will feel about you spending that much money on a car today. You may think you have nothing better to do with the money, but he will probably think otherwise.

I've always since my first new car bought "New Used" - cars from the dealership, right off of lease and with all the insurance and warranties of a "new car". BRAND new car loses thousands in price when it drives off the lot Also, how much are you going to be driving? WernerCD hit it on the head.

They rarely have any more problems than a new car, they often look and feel just like a new car, and you save a lot of money. This method also avoids having to deal with the major inconvenience of having things break and taking time off to fix them, which many proponents of 'buy a 15 year old car' often gloss over.