You’ve been waiting eagerly for months to buy a new car.
You have a picture of yourself in your head driving your shiny, new dream vehicle off the lot. It’s finally time to trade in your old car for something new, but before you make your dream a reality, you have to first take a step back and think rationally for a minute. While you may have the perfect car in mind, it may not be the perfect car for your budget.
When buying a new car, it can be easy to get swept up in the excitement and forget all about your monetary constraints. A car is a huge investment and, in order to manage that investment, it’s important to use your head and stick to a plan.
Before you run off to your Cars and Co mazda dealer, there are a few things you should consider in order to figure out what you will be able to afford when you get there.
Calculate your budget
Figuring out what you can actually afford can be pretty complicated.
You have to figure out what funds you currently have available, such as how much you have saved for a down payment and how much you will be able to get to trade in or sell your old car.
Next you need to figure out how much you can afford month to month.
This includes both monthly payments on the car as well as running costs such as fuel, insurance and registration.
Do an online search
Now that you know what you can afford, you can begin searching for possibly suitable cars.
Look around online for cars within your budget. Include a range of prices in your search so you know what some cheaper options are as well as options closer to your cut off. Chances are you’ll want to get the nicest car you can, but it’s worth looking at cheaper models because you might find you’re happy with one that will save you a ton of money at the end of the day.
Stick to your budget
Whether you’re looking online or at a dealership, don’t let yourself get talked into spending anymore money than the budget you set. It can be easy to convince yourself that a little bit here and there won’t hurt, but think back to when you were calculating your budget. The little things add up. Going over budget, even a little bit, is going to end up hurting you and leave you strapped for cash.
Focus on total price
It can be easy to just focus on your monthly payments and forget all of the other costs associated with buying and owning a car. When you get to a stage where you are serious about making the purchase, go back to your budgeting formula and consider the total cost of owning the car you are looking at. You should also factor in any extras at this stage.
Be careful of extras
When you made your budget and figured out what you could afford to pay, you were figuring out the total cost. This includes a down payment, monthly payments, running costs and extras. You can’t wait til you get to the end of the process and then throw in a sunroof and GPS on top of your budget.
Some extras are necessities for some people, which is fine, just make sure to include them in your initial budget.
Don’t forget about extra fees and taxes.
Taxes and other sale fees aren’t going to be included on the price tag.
Tax alone will be a percentage of the total cost which can be over a thousand dollars extra. There can also be various dealership fees involved so get an idea of all the associated costs before moving forward.
The bottom line when choosing a car that fits your budget is that you should choose a car that is well under your budget in order to account for all of the extras and additional costs associated with owning the car. You want a car that fits your budget so that you don’t spend the next few years trying to make your budget pay for your car.