Don't Bite More Than You Can Chew: Four Considerations To Help You Buy The Right Car For Your Wallet

If you are thinking about buying a new vehicle, you will want to sit down and go over your budget first. The ultimate goal is to end up with a new vehicle you can afford both now and in the future. Here are four considerations if you are going to buy a new vehicle:

Income Versus Expenses: First, go over your income versus your expenses and cut where you can and only if you need to. This is going to help you determine how much you can afford on a new vehicle every month. The best way to go about this is to use the 20% rule. Only 20% of your monthly income should be spent on the monthly car payment and the other expenses of owning a car, which would be gas, maintenance, etc. 

The Down Payment: The larger the down payment, the better off you are going to be financially. This is why, if you know you are going to want to buy a car within the next year, you should start saving for that down payment now. Bear in mind that while 0% down payment offers seem great, they usually only work out for those who have outstanding credit. If this isn't the case for you, then having a higher down payment is going to help you potentially receive a better interest rate on the loan. 

The Consequences: It's helpful to remind yourself of the consequences of not being able to afford the car you buy. Buying a car you cannot afford can lead to the car being repossessed, which does damage to your credit and leaves you without a car. Be realistic when it comes to figuring out how much car you can afford. 

Reoccurring Costs: Finally, you want to consider the reoccurring costs, such as maintenance, car insurance, and gas. All of these are going to have to fit into that monthly 20% rule, and they will all be different depending upon which vehicle you purchase. Look into the different brands to determine which have the lowest of these reoccurring costs. 

Doing all of the above is going to help you narrow down your car choices, which also helps make the buying process a bit easier because you will know what cars to be looking at and will ensure that you end up being able to afford the car in the long term, which is something too many people overlook. Don't forget to also negotiate. Car dealerships want to see you walk away with the car, so negotiating is both something they expect and don't mind participating in, so don't feel too shy to do this. 

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