House Vs. Car: Which Should You Buy in 2023?

27 January 2023
House Vs. Car Which Should You Buy in 2023

As the year 2023 is here, what steps are you taking toward your financial freedom? If you have a positive cash flow and a better-paying job this year, which do you think is a good investment, a house or a car? Of course, biases aside, let Lumina Homes list the financial benefits of an affordable house and lot than a car in 2023.



Dream Car vs. Dream House

A new car and an affordable house and lot for sale are both major purchases. Which asset can you commit to giving the proper maintenance? Another thing to consider is your credit history, are you financially responsible to shoulder this kind of financial situation? While there are car loans and home lenders as ways to borrow money, it's wise not to rely on them for your purchase. After all, owning a house and lot in the Philippines and getting your own car is a big investment.


Hence, you must ensure you're ready not only for auto loans or house loans, but you can have some breathing room should there be other factors that can affect your purchase--such as supply chain issues, a chip shortage, and work-life balance. So for your first investment this 2023, you must check which of the two is a practical choice. Need some help? Then discover the benefits and disadvantages of buying a car or owning a house.



Making the Case: Reasons Why A House is an Asset in 2023

For us at Lumina Homes, we think that a house can be a more sensible first investment than a new car, here are the reasons why.


Use it as an initial investment

Whether a house or a car, paying for the down payment for both assets can be quite overwhelming, especially if it's your first investment. As of the time of writing, when you pay for a car via financing, you need to settle at least 20% the price of your preferred vehicle. On the other hand, there are house and lot properties that start their downpayment at only ten percent. If you're just considering a way to safely invest your money, and build good credit, then we advise you to choose a purchase with more flexible payment schemes.



Rising Gas Prices

Aside from the yearly vehicle registration, higher prices of petrol can also be a factor why you should pick a house first before a car. Before buying a car, you need to determine whether you can handle the fluctuating prices of oil in the stock market. This is because once the price of this item continues to rise, then other forms of goods and services are also affected. In today's unpredictable market, it pays to check whether you have the financial stability to handle a car, but also have the endurance and commitment to build wealth which you can start by owning a house and lot.



Car Loan

Aside from the downpayment for each purchase, you also need to consider the interest rates of your loan to complete the payment of your major purchase. According to our research, a house loan has a lower interest rate than an auto loan that starts at only 1.5 percent compared to 3.98 percent for a car loan. Furthermore, car loans and the amount you can borrow vary depending on your down payment, or how much more money can you shell out every month to maintain your good credit score.



Worsening traffic conditions

What's the downside of owning a car? You get to drive in traffic along with the others who just want for you to drive fast rather than be stuck for hours. This traffic problem is costing the economy roughly P3.5 billion daily, according to the Japan International Cooperation Agency (JICA).


Hence we recommend that if you want to smartly invest, then choose a house and lot as your first major purchase. Did you know that there is a loophole to escape traffic even during peak hours? You just need to pick a house and lot with a location that'll be highly accessible for you and other family members. Choose the right location where there are nearby developments and nearby highways, so you can also consider ridesharing apps, trying out public transport, or even a brisk walk from home to work.



You need to have your own space for parking

What's an important factor that most new car owners overlook? It's a parking space for their own vehicle. The average Filipino with a car often uses the front yard of their house to park their cars because they don't have the allotted parking space for it.


But how can you ensure the safety of your car if you don't have a house and lot where you can park safely and as long as you like? Hence, another thing you need to consider, in order not to contribute to the traffic on the roads, and do your part to decongest the roads, ask yourself, do I have the space to park? or do I need to own a house and lot with parking provisions? Just a thought.



A car has higher monthly mortgage payments

A Forbes article mentioned, “Depreciation is a motorist's greatest expense”. This is true because year after year, a vehicle loses its original value. After five years, the average vehicle's value drops by 49.6 from its original value. While, the real estate market gets competitive and thriving as time passes by. Hence, it's safe to say that even though both are assets, a car is a depreciating asset, while a house's value appreciates over time.


As a result, a car has a higher monthly mortgage payment, because its value decreases with time. Similarly, a house and lot have a higher resale value, hence you have lower monthly payments, even stretched for the long run.


You can start a business with a steady income by owning houses and turning them into property rentals

In favor of owning a house, you can have a livelihood if you flip your property to a place open for renting. For example, instead of just an empty house and lot, you can rent it out first, or you can convert it to an apartment for employees, or a dorm for students. If you have a house and lot with lots of parking space, you can also charge for parking. If you have a spacious house or an empty garage, you can turn it into a business space, or even where you can start a small business.


While you can also rent out a car, it does have limited ways to augment your income, but with a house and lot, you can mix residential and commercial purposes within your house and lot.


You will have your own house

Perhaps, if there is one advantage of getting a house over a car this 2023 is the thought that as early as today, you will have a house and lot you can call your own. You can now stop unnecessary expenses, such as renting, moving costs, and other fees associated with constantly trying to furnish a temporary home. With your own house, you're rest assured that your infrastructure plans and spending for that property is an investment and it will benefit you and your family.



For these reasons, we hope to have given you a glimpse of the real estate scene so you can consider diving into homeownership. Want a hassle-free experience acquiring your new home? Let Lumina accredited sellers help you with that. Just send us a message today.

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