How to Successfully Budget for a New Car

Buying a new car or upgrading your current one are two very expensive costs that you need to be careful with. You never want to go beyond your limits when buying a car, because it simply isn’t worth it. Struggling financially for a vehicle that lost a lot of its value from the moment you drove it off the lot and back home is a mistake. You need to budget appropriately, choose the vehicle that will work best with you and your needs, and to, of course, follow this guide so that you can successfully budget for it all:

New or Used Debate

One of the first considerations you will need to decide on is whether you want to buy new or used. If you are on a tight budget, the answer to this question will often be to buy a used car or an older model of a new car that has a great price on it as the dealership is attempting to get rid of it.

You do need to be careful, however. Each option has its pros and cons, and it is up to you to weigh them carefully beforehand.

Pros and Cons of Used

There are a few different types of used vehicles. For one, you can buy a used vehicle directly from a private seller, or you can buy one that has been certified from a dealership. Unless you know your way around a vehicle and what to check for, you will want to opt for the latter option. Buying used from a private seller holds no guarantees, whereas buying certified from a dealership does. Often, the extra price is worth the peace of mind.

Pros and Cons of New

New cars offer the best safety features, and when chosen at the right time can still be a budget-friendly option for many. For example, buying last year’s model during a big sale can offer you big discounts on a new vehicle. All new vehicles will also come with a manufacturer’s warranty, which can be a huge plus to many.

Financing Tips

Once you know what kind of car you want, all that is left is to prepare yourself financially and then negotiate the price down from there.

Prepare Your Finances Beforehand

You can use this car loan calculator to estimate your costs before you ever go into a bank or dealership. This way you can figure out exactly how much your vehicle can cost before its repayment figures begin exceeding your budget. By doing this in advance, you can set your expectations accordingly and have a firmer grasp on what you are looking for.

Negotiating Tips

When it comes to buying your next vehicle, there are a few negotiating tips to remember, including:

  1. Have at least 20% of the cost saved for a down payment
  2. Go in with a pre-approved loan
  3. Shop at the end of the month, financial quarter, or financial year to get the best deal
  4. Know the MSRP
  5. Be prepared to walk away

Waiting a little bit longer for the deal you want (so long as it is reasonably fair to the dealership) is worth it in the long run. You never want to blow your budget on car repayments, so follow these tips today.

Tom Brown
Tom Brown is an automotive market enthusiast living in the United States. He holds a diverse background in automotive marketing and enjoys utilizing that to produce insights into the inner workings of the industry.