Considerations before buying a vehicle.

So, you want a new car because your friend next to you told you that your car looks like trash or you just decide that you 'need' to upgrade. Before going out and purchasing a car, take these financial considerations first:

Know your financial situation. If you have millions of dollars, then you probably don't need to read this as this probably won't apply to you, however, if you don't have millions of dollars then I suggest buying a car that is 2 years old or older because a car deppreciates the most in value the first 2 years (and the next most the 3rd year and so on). If you have no money in savings, consider 'making do' for the next couple of months until you save up enough money to buy a car in cash (yes, you can stop your debt snowball and pay all minimums if you and your spouse agree).

Buying a car is usually the second highest value 'thing' that you will ever purchase (with number one being your house). To top this off, vehicles always go down in value (were not talking about classics here). Because of this, you should never have more than half of your annual salary in a depreciating asset such as a vehicle. This basically means that if I make 50k a year, I should not have more than 25k in all of my vehicles combined if I wanted to have a chance at building wealth.

Know how much the car is worth. To get a price of what the vehicle is worth, you can go to kbb.com (Kelley Blue Book) and go to the private sale (which means you are buying from a private seller).

To sum it all up, I recommend buying a car that is 2 years or older. Statistics show that a car loses approximately 45% of its value in the first 2 years alone! Another thing to remember, buy the car in cash! This will allow you to save money for the future and invest more. The car will even feel different knowing that you own the car and not the bank.