Budgeting for a car can take a lot out of your bank account – it’s a big investment, especially with the ongoing increase in car prices and insurance premiums, and it’s a big worry for anyone who’s considering it. After all, a lot of your savings can go on the right car, but as soon as you take it out onto the road, it begins to lose its value.
Overall, cars can take a huge chunk out of your ongoing budget as well. You have to pay to fill them up with fuel, get them serviced as and when it’s needed, and fork out for any repairs should they occur. Even when you’ve got an insurance company to help you out, their prices might be a little too astronomical for you as well.
So it’s important we think about how you could even begin to budget for a car. It might take a while to pay one off in full, but if you know what you’re looking at from the get go, you’ll be in a much better financial position.
Don’t Pay More Than 20% Per Month
With this we’re talking about your down payment, as well as the ongoing monthly price point necessary to pay off a car. If you get the opportunity to pay only 15% of your monthly income on your car purchase, that’s great! It’s the optimum price for anyone in the market for a new car, whether that’s used or brand new, and it’s the target to set your sights on.
But if you don’t get that option, don’t worry – just try not to pay out anymore than 20% per month. This is about a fifth of your take home pay, and usually, that’s something you would cram in your savings, or save for something special. But for now, it can be used on the car.
Make Sure You Work Out Finance Options
Finance options are great for those of us who are working on strict budgets, and a lot of them exist out there. Rarely do we buy cars out of our own pockets; instead, we use auto loans, or swap deals, to make sure we get the right car that suits our purposes. But before you shop around, it might be worth it to get pre approved for such a scheme.
Companies like Really Easy Car Credit often allow people with bad credit, or those who need a guaranteed loan, to take out a credit stream for a new car. Of course, loans incur interest, and you’ll have to factor that in soon, but do you have the cash in hand right now? Cars are very necessary to modern life, after all, and most of us are going to need to rely on one for the foreseeable future. So, make sure you turn to a credit company that understands that!
Budgeting for a car takes a lot of planning, but it’s not impossible when you have a need for one.