And along with that realization, you can also be confident that the following five tips will suggest a correct direction for your efforts, including researching financing options, simply buying the cheapest car you can, making sure that you don’t buy what you can’t afford, realizing your budget is a huge umbrella, and noting that insurance rates matter too.
Research Financing Options
If you don’t have cash on hand to spend on your new vehicle, then you’re going to have to deal with financing options. Typically this is going to be through the car dealership itself, through a bank, through some 3rd party institution or company, or skimming money off of friends and family with the intent to pay them back down the road.
Get the Cheapest Car You Can
There’s a theory out there that says you’ll save tens of thousands of dollars in your lifetime by buying the cheapest car you can that still performs its function. The smashed up beater with the working engine will get you where you’re going, even if it’s ugly. And instead of getting it fixed when something totally goes haywire, you just buy another cheap car. This method really does work and is well documented as a way to get ahead financially in life starting early.
Don’t Buy What You Can’t Afford
Another smart money management concept is that you shouldn’t buy what you can’t afford. When it comes to expensive items, make sure that you can afford a reasonable amount in terms of monthly payments. If that number is too high, scratch the idea of getting that particular car right off the bat. The last thing you want to do is get your car repossessed because you didn’t think far enough in advance.
Work Out Your Budget As a Whole
Before you even think about buying a car, create a budget. Use budgeting software to see where your financial level is reasonably, and decipher what it would cost for different kinds of cars to operate long term. This means accounting for gas, too!
Insurance Rates Matter Too
And be sure to include the price of insurance in the overall cost of your car as well. If you pay as much as you can for a monthly payment, that won’t leave you in a great spot toward making sure that you have the right kind of coverage for this new purchase of yours!