Is it A Good Time For Us To Buy A New Car?

Is it a good time for us to buy a car? My husband and I have been seriously contemplating about it because we're thinking of getting one as a college graduation gift for my son next year. There are so many things to consider which had me checking out any resource that can help us decide wisely. Here  are some pointers that I got so far...

Photo by joshua yu on Unsplash

It may not be a good time to buy a new car because prices are high

This global pandemic affected had people confined to their homes for weeks or months. How many lockdowns have we had here in the Philippines alone? So when the government started to lessen restrictions, people resorted to revenge travel. (We're guilty of that, LOL!) Those who were able to save money from staying home, now have extra cash to pay for a new car. Moreover, Transport Network Vehicle (TNVS) companies that had to sell vehicle units during the early months of the pandemic started buying cars again to augment the need when people started going out again.

In other words, the higher the demand, the higher the price. Then again...

It may be a good time because car loans are relatively more flexible and affordable than before

Car dealers offer limited incentives nowadays because they know that the demand is high. However, banks and other financing institutions are offering very attractive financing options especially for brand new cars. Our local bank even offers zero cash out and flexible monthly payments. Very very very tempting, if you ask me! 

I checked the prices of the car models we are eyeing, entered the price along with the interest rate and other numbers on CarPaymentCalculator.net and got very appealing results. By the way, I like this calculator better than my bank's calculator which only had Price, Downpayment, and Years to Pay variables. This calculator is a lot more flexible and more customizable and it includes a Loan Amortization Schedule that's a big help for us in thinking about our future expenses. 

It may be a good time to buy a new car because of the state  of public transportation in this country 

After  college, my son may either enroll himself in grad school or work right away. Either way, he will have to take public transportation from our house. It takes a a tricycle ride, a jeepney ride, and 2 train rides from our place to his university in Manila. To save time, he would often book with a motorcycle ride-sharing app  so that he would only take the train rides. It's difficult to call a cab, too, especially during the rush hours.

It may not be a good time to buy a new car because fuel prices are going up

Aside from the global pandemic, the Russian-Ukraine conflict has also largely contributed to the rising fuel prices. When will fuel prices go down? As reported in a recent Forbes article, it won't go down anytime soon. This means we'll have to limit our fuel consumption and do carpooling as much as possible. Let me stress the "as much as possible" part, though, as my husband's office and my son's university are almost 11 kilometers apart. So I started calculating our fuel budget and we may be able to make it work because of my last point.

It may be a good time because our family car is already fully paid

We finished paying our family car's amortization in November last year. I added the numbers and found that from December last year until June next year, we will be able to raise half a million pesos that we can use either to buy a second-hand sedan in cash. 

So as you can see, we might be able to push through with this project next year. Planning ahead is indeed important and it helps to list down the pros and cons to be able to reach a wise decision. If you're also thinking of getting a new car for the family, you can check out the online tools I used and list down your pros and cons, too.