When compared to other purchases, a new car is among the biggest you can make. Prices can vary, but on average, you are likely to pay more than $34,000. [1] Besides the initial purchase price, you have to take into account interest paid on loans, repairs, car insurance, etc.
Because buying a new be so costly, a lot of people explore alternatives to buying a new car. If you’re interested in that as well, take a look at our suggestions below.
1. Get a Used Car
The first alternative to buying a new car is to find a used vehicle that hasn’t been driven much. If you didn’t know, the value of an average vehicle can drop as much as $9,000 within the first year. [2]
Besides the significant savings, buying a used car also gives you much more cars to choose from. The downsides are that you’re likely to pay more for repairs and upkeep. Moreover, you get limited financing options and used car loans come with higher interest rates
2. Lease a Car
Besides buying used, you can lease a new car and use it for a few years without owning it or worrying about selling it later on. Instead, you return it to the dealership that issued the lease, and you avoid having to sell or trade it in. [3]
Leasing comes with upfront costs (down payment, various fees, first month’s payment in advance). However, after that, leases tend to cost less than loan payments on a new car. Furthremore, with most leasing contracts, all the repairs are taken care of by the dealer or manufacturer. The main downside is that you will have to return the car and that you might have to follow a mileage limit.
3. Try a Car Subscription
Car subscription services charge a monthly fee without interest to drive different vehicles offered by a car company. Payments are usually lower than loan payments, but prices vary from a couple of hundred dollars to almost $2,000 for luxury cars. [4]
Car subscription service let you swap cars often, but not without some occasional hassle and high service charges. Another thing to note is that these services aren’t available everywhere in the US. [5]
4. Use a Rideshare Service
Uber and Lyft are two popular alternatives when it comes down to occasional rides, we assume you would never think of this an alternative to buying a new car. Well, news is, that using one of these services can be financially wiser that you thought. [6]
There are some circumstances where is smart to get rid of your car and start commuting via Uber or Lyft. This is the list of them:
- If you don’t use your car on a daily basis.
- If your commute to work is not long enough.
- If you are paying a high insurance due to a poor driving record.
- If you live in a city or area where Rideshare is more affordable than it normally is. Cities as Detroit, Memphis, Miami, Providence or Tampa Bay are good examples of this.
On the other hand, there are some other circumstances where you should never ever think on using Uber or Lyft as an alternative:
- If you have kids you are going to need extra room for them and their toys.
- If you live far away from your workplace and have a long commute.
- If Uber and Lyft are not available in your area.
- If you live in an area where Ridesharing apps are in high demand and therefore are more costly. Good examples of that are: Albuquerque, Austin, Cincinnati, San Antonio or Tuscon.
5. Try Car Sharing
Car sharing is a mix of renting and ridesharing. A car-sharing service has reserved parking spots in cities where users can rent a car short-term. Doing so is easy with an app that lets you reserve a vehicle and then pick it up. Renting cars this way is possible at any time, and it’s user-friendly, even if it requires a little bit of effort. [7] Car sharing is convenient and doesn’t have maintenance fees, but sometimes pick-up locations aren’t within walking distance. [8]
Conclusion
These are the best alternatives to buying a new car. They can save you lots of time and money. Still, make sure the option you pick is the right one for you. Run the numbers and do your research online before spending a significant amount of money.
[1]https://www.financialsamurai.com/average-new-car-price/
[2]https://www.nerdwallet.com/blog/loans/compare-costs-buying-new-car-vs-used/
[3]https://www.consumerreports.org/buying-a-car/leasing-vs-buying-a-new-car/
[4]https://www.edmunds.com/car-leasing/what-are-car-subscription-services.html
[5]https://www.autoblog.com/2018/10/01/vehicle-subscription-services-guide/
[6]https://twocents.lifehacker.com/heres-when-its-cheaper-to-use-lyft-instead-of-owning-a-1822354625
[7]https://www.treehugger.com/cars/what-is-car-sharing-and-how-does-it-work.html
[8]https://www.popularmechanics.com/cars/a9615/everything-you-need-to-know-about-car-sharing-16099125/
