As we move into 2025 and beyond, the economic landscape is undergoing significant changes. A downward economic trend, sluggish employment, and declining household income have become common realities. In such a context, buying a car requires extra caution. Here are several key considerations for those thinking about purchasing a vehicle.
1. Economic Downturn Means Lower Prices — Patience Is Wise
With the economy weakening and consumers spending less, market dynamics are shifting. To keep the economy moving, governments and businesses are likely to use price reductions to stimulate demand. Car prices and housing prices, as major assets, are especially sensitive to this trend.
As people have less money but goods still need to be sold, lowering prices becomes inevitable. We can expect significant drops in car prices in the next year or two. Buying now at high prices may result in huge depreciation losses in the used car market. The car you buy today might be significantly cheaper brand-new next year, and your used car will be worth even less.
2. Focus on Affordable and Durable Cars
Given the uncertainty ahead, the two most important words when buying a car now are: affordable and durable. Choosing a basic, fuel-efficient, low-maintenance vehicle is likely the safest choice for the average family.
Remember this logic: The more you spend, the more you stand to lose when prices fall. On the other hand, if you buy a cheaper car, even if prices drop later, your financial and emotional losses will be much smaller.
3. Sedan vs. SUV? Unless It’s 7-Seater, There’s No Need to Switch
Many people consider switching from a sedan to an SUV. But if you're just looking at a 5-seater SUV, there’s not much practical difference from a 5-seater sedan. Consider the following:
- Most of the time (around 90%), you're driving alone with an empty car.
- Although SUVs offer more space, it’s rare to need that extra space for moving goods or relocating.
- SUVs consume more fuel on highways and are less stable in high winds compared to sedans.
- Many modern urban SUVs no longer have high ground clearance.
- Roads, even in rural areas, have improved significantly, making SUV “off-road” advantages less relevant.
If you truly want an upgrade, go for a 7-seater SUV, which offers real functional benefits. Otherwise, a 5-seater SUV might just cost more without offering more utility.
4. Buying a Car Can Drain Your Savings — Consider the Bigger Picture
For most people, buying a car means spending a year or more of hard-earned savings. And that’s just the beginning — insurance, maintenance, gas, parking, and depreciation all add up over time.
Instead of rushing to buy a car, you might consider saving that money to:
- Live a more comfortable daily life, without financial stress.
- Handle rent, utilities, and other recurring expenses more easily.
- Be better prepared for emergencies.
- Take advantage of future opportunities — like buying a car or home when prices hit bottom.
5. In a Sluggish Economy, Cash Is Peace of Mind
In uncertain times, savings are your greatest source of security. While a car may feel like a necessity, it’s not essential for everyone’s lifestyle. Unless you have a genuine need (e.g., long commutes, transporting children, or work requirements), it might be wise to delay purchasing.
Right now, “cash is king” is more relevant than ever. Having money in hand means peace of mind. If something unexpected happens, you'll have the resources to deal with it.
Conclusion
An economic downturn is not the time for aggressive spending — it’s a time to scale back and conserve. For most people, it’s smarter to wait, or to buy a simple, durable, and affordable vehicle.
Spend your money on things that truly enhance your quality of life, not on a car that becomes a financial burden.