What to consider when buying your family car

After 15 years of loyal service, you realize it may be time to say goodbye to your old compact car. Maybe it was the air conditioner that didn’t work, maybe you’re tired of only listening to cassette tapes, or maybe you realized your two kids won’t fit in the back seat. Whatever the reason, you’ve decided to upgrade to a newer, family-friendly car. Here are some things you should consider to get the most value out of your purchase.

Father and son hanging outside of a car window

Re-sale Value and Depreciation
When determining the cost of ownership of a vehicle over any period of time, it is important to remember depreciation. Edmunds reports that new cars can lose as much as 20 percent of their value in the first year alone [1].

This doesn't seem like a huge consideration because the cost of the car depreciating doesn't actually come out of pocket, but it can be severely impactful a few years down the road. If you plan on keeping your car for a long time, this may not be a huge factor, but knowing your car's resale value over the next five or so years can definitely influence your decision.

Safety and Reliability
Safety is always a key concern of many family-oriented cars. There are many independent organizations that test crash safety, notably the Insurance Institute for Highway Safety (IIHS) that publishes comprehensive safety ratings for vehicles. If you're looking for a safe vehicle, this would be a great place to find the best models.

If you're leasing a new car, reliability may not be high on the list. But if you're buying a used car, or even a new one you plan to have in 7-8 years, the reliability is much more important. While some brands have higher reputations, Consumer Reports notes that reliability can vary greatly even within the same brand [2]. Do your research about specific year makes and models to get an idea of the repair bills you may be looking at.

Buying a car for a child
Thinking of buying a car for your child? That's great, but this may require some careful planning. If you're planning on giving your teenager an older car after you're finished paying off the loan, you need to be thinking 6-7 years ahead. If you bought a high-end sedan or sports car, consider repair costs, insurance rates, and other costs that may come up as your child learns the rules of the road.

The other option is buying a used car. This doesn't require as much planning as handing over your old vehicle, but you will need to make sure you, or your child, is financially capable of paying the bills. Again, reliability and average repair cost may be a key selling point, especially if your kid has little to no disposable income.

[1] Total Cost of Owning a Car, Nerd Wallet
[2] Guide to Car Reliability, Consumer Reports

The information provided in these articles is intended for informational purposes only. It is not to be construed as the opinion of Central Bancompany, Inc., and/or its subsidiaries and does not imply endorsement or support of any of the mentioned information, products, services, or providers. All information presented is without any representation, guaranty, or warranty regarding the accuracy, relevance, or completeness of the information.