At some point in your life as a business person, you may grapple with the question of, should I buy a house first or a car? Incidentally, this is one of the most divisive debates out there.
To questions like these, there are no definitive answers. It all depends on several factors such as your financial capabilities, most pressing needs, and outlook on the future.
Considerations To Make Before Buying A House Or Car First
As someone whose decision will hugely impact your business, you need to consider a few of the following things before answering the question, ‘should I buy a car or house first?’
Appreciation or Depreciation of the Asset
Of arguments in favor of buying a house first, this is the strongest. In fact, that is why an overwhelming majority of personal finance experts prefer starting with a house first.
Like many other real estate pieces, a house keeps increasing in value. Even though the markets fluctuate from time to time, the value of houses usually keeps going up with each passing year. And so, with time, you will find yourself building greater equity with each mortgage payment that you make.
By the time you complete the payment, your house will be worth more than you paid for it. Therefore, if it is a business asset, you can see what that will do to your balance sheet.
The opposite is true for the car. A car is a depreciating asset. And the rate of depreciation is significantly high. Usually, a brand new vehicle sheds about 11 percent of its value when it leaves the showroom. After a while, the same car will be worth roughly 37 percent of its original cost.