How do you upgrade your car when the family outgrows your current vehicle?
Whether you’re driving a two-seater convertible and have just started planning to grow your family or you have children and need to upsize the family vehicle to accommodate more kids (and their friends – hello seven-seater!), Ben Nash lends his advice to us all!
Do we put it on the mortgage, save and pay cash, attempt to get a finance lease? With so many options, how do we know?
Ben explores the four main options
Cash
Great option! There is no borrowings and this can be much cheaper because of the lack of interest rate in other options. The downside, it can take some time – if you need a car soon, you’re not going to want to wait!
Regular vehicle financing
Depending on the interest rate, this can be a much faster way to do things. Depending on what the finance rate is, you can end up paying a lot of interest.
Mortgage borrowing
You’ve got the same amount borrowing power but a lower interest rate. This can be tricky though as your repayments might be lower but you’ve got the option to borrow over a longer period. If you take this option, you will be paying more in interest the longer you have the loan.
Vehicle leasing arrangements
This is a great option if you’re required to drive for your employment. If not, you will likely find that the dealer or financing rates will be fairly similar to the leasing costs. If you’re able to do this through salary packaging due to work requirements, leasing can be a cheaper option.
Deciding can be understandably challenging, but if you crunch the numbers and compare properly, you’re going to be more informed to make the right choice.
Ben Nash. Financial Adviser and the founder of Pivot Wealth, helping people invest smarter so they can create a life not limited by money.
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Disclaimer: The information contained in this article is general in nature and does not take into account your personal objectives, financial situation or needs. Therefore, you should consider whether the information is appropriate to your circumstances before acting on it, and where appropriate, seek professional advice from a finance professional.
