Buying a car and paying for all the additional services, such as car insurance, can be pretty expensive. Globally, the expectation is to see a sale of more than 78 million cars by the end of 2017, which would mean a rise of around 7 million compared to 2014. However, a worrying statistic shows that around 13% of all drivers are uninsured. While it’s natural to want to save as much money as possible, especially to avoid financial trouble, it’s also necessary to cover all the essential expenses, such as insurance. By knowing what your budget is and having realistic expectations, you will avoid excessive debt.
Start By Calculating Income and Expenses
If you already have a personal or home budget and use it daily, you have already completed this step. Otherwise, consider setting up a personal budgeting system for all future expenses, not just your car, as this can be very beneficial and give you incredibly useful insights on your spending habits. There are plenty of excellent apps that can help you achieve this easily.
Calculate how much your income is (after taxes) and what your fixed and variable expenses are. Consider what you would be willing to sacrifice to pay for a new car and how much in general you want to spend on it. Always consider all your priorities and be sure to account for unexpected expenses down the road.
Calculate Your Down Payment
There are plenty of 0% down offers, but don’t let yourself be fooled by them! They are often not as good as they look, as they come with other compromises, and are usually reserved for people with the best credit score in any case. Remember that your aim is to build up as little debt as possible, so the larger the down payment the better. This will certainly end up costing you less in the long run, as not only will there be less total payments but you will also probably get a better deal on the interest rate.
Aim for a Reasonable Loan
As not very many people are able to pay the full price of the car immediately, most people get an auto loan. In fact, according to CNN, today around 107 million Americans have auto loan debt, which equals in approximately 43% of the adult population of the US.
However, having a loan means that you will have recurring monthly payments. In general, avoid spending more than 15% of your monthly income. Consider which areas – if any – you can cut from your personal budget, such as your vacation or entertainment budget.
Don’t Forget to Consider Insurance
Insurance can be really expensive, especially if you’re a new driver. However, it is possible to get fair rates which come with great service. Shop around for the best insurance deals or use comparison sites to help you determine the best quotes. Remember that the cheapest quote definitely doesn’t always correspond to the best service. Make sure to read the fine print, which will tell you how a company will react in case of car accidents or similar events. Ultimately, be sure to choose an insurance company that has excellent service and will allow you to explore all of your options.
Make sure to do your homework in all areas of budgeting for a new car. Examining every expense and every aspect of your budget will allow you to budget effectively.
Popular How To Guides
How To Decide Whether A Vauxhall Could be the Right Car Brand to Invest in
Continually recognized as one of the UK’s most beloved car brands, Vauxhall have once again come in as one of...
How to Ensure Your Car has GAP Insurance
It is not common knowledge amongst motorists, but if your car were to be written off then your comprehensive insurance...
How To Make Awesome Cocktails
The cocktail culture is ever changing with innovations every year. Mixing of different drinks creates new trends of cocktails. Brands...
How To Save Money With Your Gadgets
With the mass amount of sales from our top retailors all year round, and even better deals around the corner...
How To for Wealth Brokers: Develop Your Online Networking Skills
There are numerous statistics that reinforce the value of social networking for businesses, regardless of the industry in which they...
How To Live Well with a Disability: Improving Your Quality of Life
Living with a disability can make life more challenging, especially if you are newly disabled. Depending on your disability, there...
How to Make Your Office More Eco-Friendly
Research has shown that an office designed with the environment in mind can help improve your workplace culture, making it...
How to Trade Forex to Make Extra Cash?
Everyone is looking to make some extra cash in a side hustle. This is mainly because people need a little...
Business3 years ago
5 Things You Must Consider Before Starting A Construction Company
Cars & Vehicles3 years ago
How To Deal With A Driving Offence (Quick Tips)
Games / Video Games1 year ago
How To Connect a Mouse and Keyboard to Your PlayStation 4
Sport1 year ago
How To Get Into A New Sport: 10 Inspiring Tips
Cleaning5 years ago
How to Make a Shower Tray Look Like New
Fun1 year ago
How to Survive a Zombie Apocalypse
Business4 years ago
How to Make Your Own Mini Conveyor Belt
Home Maintenance & Repair4 years ago
How To Build Your Own Fitted Wardrobes