Should you replace that worn out car?

Boy with Car for April 2017

Your debt has been paid down, and your finances are in better shape than they have been in a long time. Is it time to go out and buy a new car to replace the clunker you are driving? The answer is NO if you are in the process of buying a home. Even though you have obtained a home loan,  the closing is not complete. You can wreck the process by deviating from your normal spending patterns. The additional expense of a newer car can be enough to derail the loan and cost you the house.

If you are ready for a different car consider waiting for a windfall such as a raise, or tax refund to help you with the purchase once the closing is done. If you are not expecting either of these to happen it is still probably better to wait and see what it feels like to make the new home payment. If it is tough to write the check then you may decide to fix up your old car, or buy one that is in better shape that is similar to yours.

Setting realistic goals and reaching your potential without overextending yourself can be very satisfying. So before you take that new car test drive consider what you may encounter along the road.