When you're in need of a vehicle, it can be easy to fall in love with the first nice car that you see at a dealership. However, it is important to only buy a vehicle that you can afford. Otherwise, you could find yourself in a tough financial situation later. In fact, it is generally best to come up with a budget before you ever start shopping for a car so that you don't find yourself buying a car that costs more than what you can afford. Luckily, following these tips can make it easier for you to set a budget when buying a used car.
1. Consider the Advice of the Professionals
There is a lot of advice out there about how much you should spend on a car. Some say that the general rule of thumb is that you should spend no more than 15 percent of your take-home pay on a car payment and other car-related expenses. Some say that you should not buy a car that costs more than half of your annual income, even if you are financing it over an extended period of time. Keeping these things in mind can give you a good starting off point when determining how much to spend on your vehicle.
2. Look at Your Personal Budget
Just because a car you are interested in falls within the numbers listed above does not actually mean that you can afford it. If you have a large family to buy food and clothing for, for example, you may not be able to afford a higher car payment. If you have a lot of other outside debt, you may also need to reduce the cost of your car. Write out a monthly budget of income and expenses to get an idea of what you can realistically afford to spend each month on a vehicle. If you have had car payments in the past, considering how much you paid and how it affected your budget could help.
3. Remember Other Costs
Remember that when it comes to buying a car, your expenses go way beyond just paying your monthly car payment. Make sure that you keep other costs in mind, too, such as how much you will have to spend on oil changes, tags, tires, insurance, gas and more. If you forget these things when coming up with your budget, you might leave yourself with less money than you need.
As you can see, there are a few things that you will want to keep in mind when setting a used car budget. Follow these tips, however, and you should be able to come up with a purchase price that you can reasonably afford. Then, you can buy a great used car without having to worry about its cost ruining your budget. For more information on buying a used car, check out websites like http://www.starautomall.org/.
When do you call it quits on your old car? The car that you once referred to as "old reliable" might not be the reliable vehicle that it once was. You may be able to make the repairs as often as they need to be made, but think about how much you are spending on making those repairs. This blog is filled with tips that can help you decide if it is time to let go of the car that you love and replace it with something that will keep you going when you need it to get you there with no problems.