What car can i afford?
Anyone living outside of a major city needs a vehicle for transportation, but some budgets are more limited than others. The first step of buying a car is determining a suitable price range. That maximum price will then decide whether a potential buyer can afford a new or used vehicle, as well as which models are still on the table. Without proper planning it’s easy to become overwhelmed by the monthly payments, fuel costs and upkeep associated with owning a car.
There is a quick and simple way to get a rough idea of how much a person or family can afford. It involves settling on a number as the largest possible monthly payment, and then multiplying it by the length of a proposed loan. Subtracting approximately 15 percent from the product accounts for fees, taxes and interest and leaves a reasonable estimate of the sticker price of an affordable car. From there, a buyer can examine new and used vehicles in the area and settle on the type that best fits his or her own lifestyle and wallet. New cars are appealing and fresh, but used models are often drastically cheaper and still in good shape. Whether a new car is worth paying new car prices is up to the buyer.
Of course, a car’s costs don’t stop once a loan has been haggled out and the vehicle has been signed over. The most frequent of these extra expenditures is gasoline, and with prices rising driving is likely to only become more expensive over time. Purchasing a car with better gas mileage is a smart choice, but that often means excluding larger categories such as trucks and SUVs. Car costs tend to go up with car prices, meaning a trade-off will have to be made somewhere.
The other major expenses are car maintenance costs. To avoid a catastrophic failure and the associated repair work, car owners must follow a basic upkeep schedule. This includes changing the oil, replacing brakes, installing new belts and occasionally flushing out the other fluids in the engine. Keeping a car in good working order takes up several hundred dollars a year, but paying to insure it can cost even more. Insurance rates are determined by the driver’s history and the car model, and financed vehicles usually require a more expensive policy. The car maintenance costs required to keep a vehicle on the road can easily outweigh the actual payments, and should always be taken into consideration beforehand.
It’s best to purchase a car slightly below budget to account for insurance premiums and all of the unexpected twists life tens to throw at families. With the right planning and realistic expectations, it’s possible for nearly anyone to buy a car that meets his or her needs without breaking the bank.