Many people have different opinions on these two things simply because everyone is different and in different situations in life. Buying a new car first is more important to person A since they might need it for their job. A new house is more important to person B probably because they want to start a family as soon as they can afford it.
Whatever you decide, both require a huge commitment, good credit scores, money put aside, etc. You probably know all the basics before applying for a loan.
Here’s what you need to consider before you make a final decision:
Maintenance Cost
Maintaining a house differs from maintaining a car. In fact, houses don’t need as much maintenance as cars. Most home repairs can be handled by the homeowner unless the damage is already extreme. If you plan to renovate, improve, or remodel, it’s still to your advantage because your house value increases.
When it comes to cars, the cost of maintenance is higher since they need to be fueled and serviced regularly. If there are damages, repairs are a separate cost, making them more expensive. If you upgrade your car, it might be harder to sell it when you plan to.
Value and Cost
As you pay off your mortgage, the fewer expenses you need to manage as the years go by. On the other hand, the value of your car decreases by the time you finish paying the loan. What’s worse is that maintenance and repair costs are still the same or even require more since the car is already old.
Income and Revenue
Owning a house can build long-term wealth for you. You can even take property equity and use the money you get from that for something else. Maybe a car? The point is, a house has its potential offers even after you’ve paid a lot of money for it.
There are also ways to gain income when you own a house. You can use it for other people to rent. Either short-term or long-term. You can decide whether you want to furnish it or not. Furnishing it requires more maintenance and security deposit for the renters.
In any way, you can have a stable income as long as you maintain it. With this, you can also use the money to pay off your mortgage if you haven’t already.
With owning a car, you can also benefit from some extra income. You can use your car/s for other people to use, like in ride-sharing apps. This might not give out as much as a house does, but it’s still something.
Whichever You Need First
Despite the disadvantages of buying a car, perhaps you need it more than you need a house. If buying a car is what you really need and appreciate, it’ll be worth it. Besides, not everyone is capable of being a homeowner anyway.
You must surely know which one is more important to you. Do you have a job that requires you to go to different places? Is public transport difficult to reach in your area? Can you handle the requirement and responsibilities of homeownership?
Many independent single people favor getting a new car first since they need it for their career, personal travels, and social life. This way, they can travel anytime they’d want or need. For families, on the other hand, it is advisable to buy a house first. The car can come later.
You also have to consider if you can afford it. If you buy a car first, can you handle all the expenses? Paying all of it—auto loan, maintenance, rent, and utilities—can sometimes be more overwhelming. When you buy a house first, it’s the only thing you think about, including utility bills. If you can afford to buy a car and pay housing rent simultaneously, then go for it.
Your Personal Lifestyle
If you’re a type that needs a place to settle down, then buying a house first might be best for you. You can refinance your loan if you want to change your mind.
Considering how you live is just as important as the finances. If you’re one of those who love to travel and don’t stay still in one area for a long time, then maybe prioritizing a car is best for you. When, later on, you decide to buy a home, too, the odds might be in your favor. By the time you have both, you can take house renters and still travel or live the way you desire.
