If you’re in the market for a car, it’s important that you’re able to get one that will be reliable for you without requiring you to spend more money than you have available or can comfortably afford. Because a car is likely one of the biggest purchases you’ll make in your life, it’s important that you go about it the right way and that you set yourself up for financial success throughout the car buying process and beyond. So to help you accomplish this, here are three financial tips for when you’re ready to buy a car
Set A Budget and Stick To It
Before you seriously start looking for cars, it’s important that you figure out how much you can actually afford to spend, both in total and on a monthly basis. While you might be tempted to go a bit beyond these numbers as you’re looking at cars or speaking with salespeople, it’s crucial that you stick to your budget and don’t waver on how much you know you can afford. According to Kendall Little, a contributor to Bankrate.com, you shouldn’t spend more than 25 percent of your monthly income on all combined car expenses. So make sure that whatever budget you’re setting for yourself will fit into this wise advice.
Always Put Money Down
Depending on where you go to buy your car, you might be offered a deal where you’re not required to put any money down to purchase the car and take it home off the lot. And although this might seem like it’s saving you money, it’s actually costing you heavily. According to David Weliver, a contributor to Money Under 30, you should always put money in as a down payment for any vehicle purchase you make. Ideally, you should shoot for putting 20 percent of the total cost down, but anything’s better than nothing. A down payment helps to reduce the risk that you’ll soon owe more on the car than it’s worth, which is a situation no one ever wants to be in.
Don’t Buy The First Car You See
If you’re really in need of a car, it’s only natural to want to grab the first thing you see and just get on with your life. But if you’re wanting to make a smart financial decision with your car purchase, David Bakke, a contributor to MoneyCrashers.com, advises that you should never buy the first car you see. By walking out of a dealership at least once, you’ll be able to boost your own confidence regarding the negotiation process as well as allowing you to see what the lowest prices you can be offered for the vehicle you’re looking for.
If you’re looking to make a smart financial choice about buying a new car, consider using the tips mentioned above to help you do just that.