How to Buy a Car on a BudgetApril 28, 2016
When it comes to buying a car on a budget, there are numerous financial considerations to be taken into account. The price you see on the sticker likely will not be the final dollar amount that the car will cost you. Over time, small costs add up and what seems like a sound purchase now could cost you big further down the road. It’s easy to get caught up in the excitement of buying a new car and that can lead to you making concessions you might not otherwise make. That’s why compare.com has come up with the top things to consider when buying a car on a budget.
New or used?
Believe it or not, there are people out there who still think that buying a car is an investment. It’s not. Buying a new car is just like throwing your money away. Most cars, even cars widely held to “retain their value”, depreciate an average of $5,000 in the first year alone. That being said, you’ll be making a more sound financial decision if you choose a used car. If you’re buying a car on a budget, purchasing a brand new car probably should not be an option.
What are the maintenance costs?
With new cars, maintenance is becoming a concern when it comes to planning your future expenses. It used to be that when you purchased a car you had an idea of what maintenance tasks you could handle yourself (if any) and which tasks would require professional assistance. Changing headlamp bulbs, for example, used to be a fairly simple procedure. Today, some vehicle models require body panels to be removed and may even require special tools. For procedures such as this, they can come with added expense. Remember, your local mechanic is paid hourly. If changing that headlight involves that much work, it will take more time… and that’s an added cost. Also, don’t be afraid to ask your salesperson (or research online) about other unusual maintenance costs. For example, some sports cars require a specific type of tire and those tires need to be replaced more often than normal tires. Maintenance costs like these can make an affordable car become an expensive car very easily.
You can save money by purchasing a vehicle on which you can do most basic maintenance yourself. Oil changes add up particularly fast if you take your car to a service center. Those on a budget will find tremendous savings in handling this task themselves as the cost of materials for an oil change is incredibly low. If you are interested, you can learn how to do that at Edmunds.com.
Car insurance payments
Many of us don’t consider car insurance costs until we’ve decided on the car we want. Or worse, we don’t bother with car insurance until we’ve purchased the car. This can be a crucial mistake, especially for those buying a car on a budget. Car insurance payments are one of the more important things to consider when you buy a car. The type of car, make, model, and year all affect the price of your car insurance as well as the safety equipment and add-ons. You could see your car insurance payments double if you aren’t careful. Transitioning from a late model 4-cylinder sedan to a V-6 coupe could do just that. Also, if you are taking out a loan for the car, you may be required to carry gap insurance as a condition of your loan. Gap insurance will be an additional cost as well.
Car Buying Guide
Looking to buy a car? We’re here to help. Our Car Buying Guide will help you compare all aspects of the car buying process – price, performance, reliability and more.