Money Matters: Buying a Car
So…you want to buy a car and think you are ready. Have you made the proper plans or are you just going to march down to the dealer and sign a few papers? You think your negotiating skills are perfect and you can get a good deal?
Research is key if you are even considering that new or used car.
First of all, what can you afford. Do you track your spending and income with a budget? Can you afford the car of your dreams without cutting into savings? If you don’t have a budget, click here for information about creating one. Can you afford $200 a month for your new vehicle? What about $300? That number will be the total amount that you can pay for the car itself and operating expenses, like gas and maintenance.
Operating expenses can be about one third to one half of the monthly cost of a new car. So take the amount you’ve decided you can spend on your car each month and multiply it by .66. That is the most you should consider spending on monthly payments for the vehicle to be able to afford operating expenses as well.
How much do you have to put down for a down payment? Obviously, the bigger the better. For most loans, you’ll need 10% and don’t believe the “zero down” promotions. You get dinged with higher rates.
Before you take on that sales rep at the local dealership, use these calculators and determine what’s best for you!
- Do Women Really Make Better Car Choices Than Men? (dailyfinance.com)
- What to Consider Before Buying Certified Used Cars for Sale (athingforcars.com)
- How to Buy From Used Car Dealers? (athingforcars.com)