new car in lotAre you itching for a new car? Perhaps your vehicle has some wear and tear along with dings and minor scratches or you’re anxiety is kicking in because you see how high fuel cost is and you would like to switch to a car with better gas mileage.

So what’s your best move? Lease, buy or keep? It’s time to empower yourself, consider all the options and understand the fundamentals of car ownership.. First things first, let’s start by auditing yourself.

Audit yourself

Gather all your repair and maintenance receipts for the past 3 years and divide by 36. The annual repair cost for Japanese and US vehicles is between $800 and $1,100.00 putting you spending budget between $66.00 and $91.00 average a month. So if your monthly average is between $100.00 and $200.00 you’re way ahead of the game! Currently a new car payment average is over $500.00 without insurance! (So, do you need a new vehicle or do you want a new vehicle?)

Audit the reason you drive your vehicle

Are you in a four passenger vehicle but you never having anyone else but your gym bag or cloths with you? Are you driving a 4×4 SUV but you never drive out of the city? Do you have a roof rack and towing package but your never tow or put luggage on the roof rack—(Honestly, who even does that anymore? Unless your in Colorado) So… take a moment and ask yourself, what is the functionality of the vehicle I Need?

Audit your annual miles you drive your vehicle

If you’re driving between 5,000 and 10,000 miles a year, then your new car will be more asleep than awake! You’ll burn through the warranty date before you get half of the miles you’re supposed to drive. So much for the warranty! What value did you get for your $30,000 plus new car?

Audit your insurance payment

Call your insurance and ask, what will my new care insurance coverage be? You will have no choice but to have full coverage on a new car as the bank will not give you the loan without full coverage. So, can you really afford a new car with the new insurance premium?

If your current vehicle falls in favor financially to your audit, then it may be a good option to keep it. If after your audit you find that you are way out of whack, then its time to consider a new car.

SO, WHAT’S THE BETTER OPTION?

Remember when buying new car, it will depreciate 10% the moment you drive it off the lot and roughly 10-12% each year after. If you’re looking for the most cost-effective option over the long term, buying a car and keeping it for a several years after you’ve paid it off is often the best choice.

Do you get bored every 2 years and like having the newest technology or the most-up-to-date safety features? Then leasing might give you the freedom to make the periodic upgrades you’re looking for without breaking the bank. Also, when leasing car, if the residual value is set too low, you can buy the car for less than it’s worth at lease end. Moreover, leasing companies have to resell their returned cars either directly to a dealer or through an auction. Often they will negotiate a buyout price that’s more favorable to you to avoid that hassle and expense.

The truth is whether you lease or buy, cars are not investments. There’s no one-size-fits-all option when it comes to the age-old question of lease vs buy. It’s important to empower yourself to be able to identify some key factors related to cost and your personal preferences. Do the research so you can make the best choice that’s right for you.

“ONCE YOU’RE EMPOWERED, YOU’RE ALWAYS EMPOWERED AND THAT MAKES VANITY SUPERFICIAL”