If you are thinking about buying a vehicle, there is often a lot to consider before you sign on the dotted line. What size do you need? What’s the mileage? What’s the fuel economy? And, of course, most importantly, what can you afford? Here are some tips to help you stick to your budget.
First and foremost, think about your budget. Be realistic. What is the maximum amount you want to spend monthly? How many years do you want to be paying for the vehicle? Use online calculators to look at different amounts and estimate the amount you can afford to spend on a vehicle based on the monthly payment you can afford. Once you’ve set this number, don’t go over it, no matter what.
Secondly, don’t get excited about or set your mind on a particular type of vehicle. Sure, that cherry-red mustang with the convertible top sure looks nice sitting there in the sunshine. Sure, it’d be lovely to drive, top-down with the wind in your hair. What won’t be very nice is when those payments start causing you to regret your decision or make it hard for you to keep up with other payments. Instead, think about what you need, rather than what you don’t. Getting stuck on the type of vehicle can land you with a payment you can’t afford.
Once you’ve done some research, look at available financing options. Is monthly financing through the dealership the best option? Sometimes this is a great idea and can really work. Other times, especially when you look at a used car, interest rates climb and those 7 and 8-year terms, while bringing your monthly payments down can seem attractive, mean you’re paying for far too long.
Don’t forget things like:
- Tax
- Admin fees
- Freight (if you plan to buy new)
These items are not always included on that sticker when you look at the price of a car, but can add a ton to the amount you end up paying, so just don’t forget about them.
Speak to your local loan company to start planning to buy, based on payment. A loan from a reputable finance company is often a great option when it comes to financing a new vehicle. Obtaining a loan prior to shopping gives you a total that you can spend – and it can save on interest. Not only does this help you stay within your budget, it means you’re likely paying for a shorter period of time.
When it comes to buying a vehicle, there is always a lot to consider, but purchasing for the payment should be at the top of the list. Don’t get stuck with a car you resent – or a payment you can’t actually afford.
Want to find out about obtaining a loan to buy a new vehicle?
Call Prudent Financial today at 1-888-852-7647.