Is It Smart to Buy a Car Now?

Moving around the city or areas is not only a hassle but a health hazard for everyone – the reason that made work-from-home and online businesses a new reality. Traveling remains essential and the most ideal to do it is to own a car that you can personally use and avoid the public. But you ask: is it smart to buy a car now?

Is your car an asset or a liability?

We often ask what a car is: a liability or an asset. Let us define both terms first. Assets refer to items in your possession that have value and these help you expand your net worth. Pieces of jewelry, bonds, and stocks are examples of assets. On the other hand, liabilities refer to anything that you ought to pay, and these reduce your net worth. Personal loans, credit cards, and mortgages are examples of liabilities.

Now, in which category does a car fall? This is as tricky as to how it seems to be. A car you own can be sold at a high price, but a car can also take away a portion of your finances for its fuel or maintenance. Indeed, a car is an asset, however, its value the year you bought it will not be similar for the following years – it will be lower. This is why it is categorized as a depreciating asset.

How much should you spend on a car?

Knowing that your car is not an investment should pose another question about your car. That is how much you need to allocate from your income to your car. Financial experts recommend that you must only spend from 10% to 50% of your yearly gross income on your vehicle.

Purchasing a car is probably the second among the biggest outlays you will do, so consider your current financial situation to adjust and match the number of funds for car-related expenses. It’s best to create a sinking fund for your purchase and choose a car that is more affordable than the ones you dream about but can’t afford for now. If you still have loans underway, you need to be modest with how you spend your money on vehicles. In the long run, these decisions place you in a better financial position.

Is it smart to purchase a car right now?

The answer is a straightforward yes. It is smart to buy a car right now due to the ongoing health crisis worldwide brought by the coronavirus disease.

If this seems impractical because we are all going through the financial crisis and our economy is failing, the reason is buying a personal vehicle gives us safety more than convenience. Despite the threats of COVID-19, we have to move forward with our lives, go to work, and attend to families or personal needs. By purchasing a car, we can reach our workplace or travel around the city (for shopping, essential meetups, transactions). At the same time, it reduces our contact with strangers in crowded areas that we often regularly run into when we commute.

A car is not a mere luxury or convenience amid the pandemic. This is a necessity in the new normal while the world continues to flatten the numbers of COVID cases. If you can afford to buy a car now, it’s time to contact your dealer to find the unit, be it brand-new or second-hand, that is the most suitable for you.

Does the pandemic affect car sales?

The pandemic affected car sales as much as how it disrupted all the industries since the virus breakout. The national lockdown in the Philippines had caused the market to crash and businesses to shut down. With limited mobility and a suffering economy, car sales dropped at an alarming rate, and this slump has persisted at present.

Some of the companies launched a variety of deals and promos to cope with the lack of sales. Take advantage of these deals to own the car that you will conveniently bring you anywhere amid health protocols against the pandemic.

How do you buy a car in these times?

A sales pattern is seen that there is more demand in used cars in these times thus these are sold at a price higher than its price before COVID-19. However, always do your research on where to get the best vehicle for you. You can apply for an auto loan from trusted lending companies such as Global Dominion Inc, banks, or dealers. One good thing is that the application and purchasing processes are now structured online to lessen physical contact.

Cast your doubts away about buying a car in these times. It’s a smart decision to keep yourself and your family mobile without the anxieties of easily catching the virus. Now is the next best time to have a car.