4 Things To Check To Make Sure Your Used Car Fits Your Budget

When purchasing used cars on a tight budget, you need to look at more than the sticker price. You need to take into consideration your monthly car loan payment, monthly insurance payments, car registration fee and car maintenance costs.

Monthly Car Loan Payments

Your monthly car loan payments are going to depend on the price of the vehicle you choose, how much money you have to put down for a deposit, and your credit score. If you have a low credit score, you are going to face higher interest rates for your auto loan. If you have a high credit score, you more than likely will be able to secure lower interest rates for your loan.

One way to keep your monthly car payments lower is to go for a loan that is spread out over a great number of years. For example, a loan of $10,000 spread out over three years, not including interest, would generate loan payments around $278 a month. The same $10,000 loan spread out over six years would only be about $139 a month plus interest. It is important to keep in mind though that the longer the loan term, the more interest you are going to end up paying on the loan, which means you will have paid more for the loan if you have the same interest rates spread out over six years instead of three years. However, depending on your circumstances, a longer loan term could be in your best interests.

Monthly Insurance Payments

When you carry a loan on your vehicle, your insurance provider is going to expect you to carry full coverage on your vehicle. Full coverage is more than the bare minimum that you are required by state law to carry. In addition, it is always a good idea to add things such as roadside assistance, rental car assistance and gap insurance.

Call your insurance provider and find out how much the premium will be for any car you are interested in purchasing. Make sure that the quote is for full-coverage and includes the cost of any extra insurance you may want to add on.

Car Registration

Next, find out how much it will cost you to register your vehicle and how often you will have to pay that registration fee. In many states, the registration fee is based on the value of your vehicle. Registrations fees can be very reasonable, under a hundred dollars, or they can cost you hundreds of dollars depending on the vehicle you own and the fee structure in your state.

Some states require that you register your car on a yearly basis, whereas other states only require you to register your vehicle every few years. Be sure to add this as a yearly ownership cost.

Car Maintenance Costs

Some cars cost more to maintain than others. For example, a European car that requires synthetic oil and premium gas is going to cost you more every time you fill up at the tank or get an oil change. Look into the maintenance costs associated with the vehicle, as well as common mechanical problems associated with the vehicle. Make sure that you can afford the regular and surprised maintenances costs that may come up for your vehicle.

When purchasing a used car, make sure that you can afford the monthly cost of owning that particular vehicle as well as the yearly and long-term costs associated with owning that particular vehicle. Keep looking till you find a reliable vehicle that fits within your overall budget. 

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