There are many reasons why you could get a second car. It could be that your better half needs a ride to work, or the kids need a more family-oriented automobile, or perhaps you just want something that is more exciting to drive. Any of these reasons are totally valid, but having one car is already a big responsibility, why get a second one?
This article covers the pertinent questions you should ask yourself if you are contemplating on buying a second automobile. While buying a vehicle is fun in its own right, it is important to make responsible decisions based on rational thought and not impulse. Take note that this article is not meant to be a guide, rather a call for introspection aimed at the prospective car buyer. So without further ado—are you ready for a second car?
Can you afford it?
The first and most important question to get the ball rolling is figuring your personal or familial expenses. Make a spreadsheet, get organized, and figure out your cash flow. Talk to your spouse, and to your whole family. By doing this, you will be able to see if you can actually afford another vehicle. Fit that car into your budget. If you will be paying monthly amortizations or in straight cash, make sure to compute each of the scenarios, and don’t forget the interest expenses. Unless there is a 0% interest promotion, then you must pay off the interest if you will engage in a financing deal.
After you account for the purchase, try and estimate how much the car will cost to maintain and fuel up, as well as any accessories that you want to add. On top of that, there are also other costs such as insurance and registration that you have to think about. While it may seem like a perfect fit, it is always important to leave a buffer for savings and emergency funds just in case something happens to you, or your family. Make sure that you can still live comfortably, and with savings.
What are you going to use it for?
You need to figure out why you are buying a second automobile. It’s dangerous to buy one if the purchase is made out of impulse. There has to be a clear goal and a clear use-case for the car otherwise it will become an expensive paperweight. Ask yourself what days of the week will you be behind the wheel or in the passenger seat, or who will be driving. Use the car that you buy, but most importantly, make sure you can picture yourself in the next few years using it.
Do you have space for it?
Unlike a video game, you don’t have a magic box where you can stash all your inventory. Cars take up a lot of space, and if you don’t have the proper accommodations for it, you could be exposing your investment to risk or even run into trouble with the law by parking it out on the street.
Much like preparing for the arrival of a child, you must prepare yourself for the arrival of a car. Make sure that you have space, and that you’re able to store the car in a safe and legal manner. Leaving your car out on the street isn’t ideal, however, there are also actions that you can take to facilitate this matter of storage, legally. If your local government unit (LGU) allows street parking, make sure to go to the office and file the necessary paperwork that will legally allow you to park on the street.
A more expensive yet sure-fire way to secure parking is to renovate your residence to accommodate a bigger or another car. Be careful with this option because you must only build on a property that is legally owned by you.
Do you have the time for it?
What use is a car if you will have no time to drive it? Issues arise from neglect. If you stop paying attention to your car and properly maintaining it, things start going wrong. You don’t want the battery to go flat or the car to sit unused and unloved, just because not enough time is being given to it. There are cases wherein a car purchase is made, but the owner or designated user prefers other methods of transportation.
Do you have an escape plan?
While it is important to prepare for a purchase, it’s also equally imperative to think of an exit plan. To do this, pose some “what if” scenarios such as: “What if the car gets totaled,” or “What if I want to sell the car?” Questions like these help you prepare and determine whether a second—or even a first car—is viable in the long run. Even after the purchase, it would be wise to keep thinking about these things or have the plans at the ready. If the car is insured, be sure to brush up on the knowledge on how to make a claim so the process can go by smoothly.
If you do plan to sell the car after a certain period of time, factor in depreciation in your accounting spreadsheet. If you’ve bought a second-hand car, depreciation isn’t something to be overly worried about, but in new car deals, you definitely need to account for it. Once a new car rolls off the lot registered to its first owner, the value of that car drops significantly.