Buying a Car- A Prudent decision or a Costly Mistake?

If you are buying a car or replacing an existing one, then this article is for you. These are important decisions and need careful thinking as you will be investing a substantial amount. A vehicle is considered to be a status symbol in our society and till recently, was a privilege of the rich and famous. The pricier the car, the higher one is placed on the societal strata. This drives a lot amongst us to buy a car without giving it a thought about its actual use, the maintenance costs or the depreciation.

Time for some introspection

Nowadays, one can easily purchase a car by applying for a loan as a car loan and personal loan interest rates can be negotiated and are well within the common man’s reach. Yet, it would be wise to as yourself the following questions before committing to the decision:
 When do I need a car?
 Will my car be an asset or a liability?
 Is it time to replace the old car for a new one?
 What should my budget be for the first car?

Asset or Liability?

A car has always occupied a prominent place in our list of desires and buying one is considered to be a fulfilment of dreams for most of us. Often there is peer pressure that forces us to keep rational thinking aside temporarily and buy a vehicle simply because all our friends have it. A car cannot be termed as an asset if it is going to be parked in the parking lot most of the time and being taken out only when it needs to be serviced.
Is your office far away from your residence and public transport is unreliable? Do you have a large family who often needs to travel together? Do you love to drive? If the answer to the above questions is yes, then you could be justified in investing in the purchase of a new car. If the answer is no and you are taking an instant loan just because your neighbours have bought one, then think again!