Can Your Family Afford a Fun Third Car?
With global microchip shortages and a thriving used market impacting vehicle sales, it might seem like your dream car is out of reach. Settling for a Toyota or a Honda with ten years of experience on the road might help your budget, but it won’t deliver a fun driving experience.
Although a Lamborghini or Ferrari is out of reach for the average household, most families can afford a fun third car with the proper financial structure. Money isn’t worth earning unless you can enjoy it some – after setting cash aside for retirement and emergencies.
How Can I Afford a Fun Third Car?
If you’d like a fun vehicle to drive and two others are already in the driveway, here are some milestones to hit before you put down some cash.
- You don’t have any consumer or credit card debt (including student loans).
- At least six months of living expenses are saved in an emergency fund that offers protected liquidity.
- You’re putting at least 10% of your monthly income into a retirement account.
Do you have any leftover money after those budgetary goals? If so, your family can probably afford a fun car.
When you shop carefully in the used marketplace, you’ll discover that luxury vehicles often cost significantly less than when they are new. Just be careful when looking at European brands, as their maintenance costs tend to get considerably higher as the vehicle gets older.
What About Leasing a Third Car?
Although a lease can get you into a better car for the same monthly payment as a financing package, it’s suitable for families that expect to maintain this cost indefinitely. If you want the expense to disappear eventually, your best choice is to use a loan or pay cash.
It can be fun to have a weekend car that the family can use. Treating yourself to something that works for the entire family allows you to take a practical approach without paying for unnecessary upgrades.