Buying a New Car? Financial Planners Have a Better Idea

Maintaining Present Vehicle May Be Key to Long-Term Financial Happiness
Everybody wants a new car. You see a nice car pass you on the highway and think, ‘Why can’t I have that’? However, financial planners believe that taking better care of your current car may help you in the long run with your goal of financial freedom, according to the Car Care Council.

“We advise our clients that if they want a 10-percent increase on their investments every year they need to cut down on their expenses,” said Terry Mulcahy, vice president of investments for R.W. Baird in Mequon, Wis. “A new automobile is for most people their second biggest investment next to a home, so a great way to save money and increase financial assets is to hang onto their current vehicle rather than buy a new one every few years. Budgeting for and doing preventative maintenance on your car is one of the best ways to cut your costs and keep your car.”

The Car Care Council estimates that more than $60 billion in vehicle maintenance and repair is not performed every year, evidence that there is considerably more that consumers should be doing to protect their automotive investment.

“Whether it’s an oil change, replacing brakes or new belts and hoses, that periodic repair bill is a drop in the bucket compared to monthly payments on a new car,” said Rich White, executive director of the Car Care Council. “The bottom line is that a properly maintained vehicle is safer, more dependable, more fuel efficient, less polluting and more valuable. The smartest way to get a solid return on investment is to keep your car through what we call the ‘Cinderella Era’. It’s that period of time after the payoff when your car is still in great shape and needs only modest repairs.”

Figures from Runzheimer International, a management-consulting firm that measures travel and living costs, confirm the Council’s claims. Recent figures from a Runzheimer study show that trading a vehicle every eight years instead of every four can save more than $2,481.75 a year after the payoff. That includes repairs and maintenance, license, registration and taxes and insurance.

The Car Care Council is the source of information for the “Be Car Care Aware” consumer education campaign on behalf of the automotive aftermarket industry. The purpose of the campaign is to provide timely and accurate information about the benefits of regular vehicle care, maintenance and repair to consumers. For more information about routine vehicle maintenance and how to “Be Car Care Aware,” log onto www.carcare.org.