Okay so it’s a new year and you are tired of taking the bus so you are ready for a car. What should be your first step?
Well before making any major purchase it’s important to consider the cost. Of course you need to find a car that you can afford. However the cost of the initial purchase of the car has to be added to other costs.
After purchasing the car you will need to pay for car insurance. This varies depending on the policy you purchase and the year of the car.
Don’t forget you also need to ensure that the car is fully registered and licensed.
If the car was not being driven, the fitness might also be up and that is an additional cost to renew especially if there are any mechanical issues to correct.
What’s a new car without the accessories? So you might need new mats or steering wheel covers or an updated sound system.
Get Your Finances in order
It’s important to get your finances in order before you go car hunting. The first thing to do is to calculate how much you can spend. If you don’t want a car loan at all, you can skip this but those who can’t pay the cost of the car in full or who don’t mind a car payment, then you need to start by calculating how much you can afford to pay out each month.
Ensure that you have enough for a deposit even if you are taking a loan. Make sure you leave some funds for maintenance for the car, such as oil changes or new tires.
Decide the timeline for the purchase
Once you know how much you can afford to spend, including down payments and monthly loan installments, the final element is timing. Although you might want the car now it might make financial sense to buy later after you have accumulated enough funds.
Just remember that the sooner you want the car the faster you’ll have to find the cash to make the purchase.
Don’t be unrealistic.
If you only take home $50,000 a month but need a $100,000 down payment for the car why not delay your purchase by a few months to build up more savings.
The best way to meet a savings goal is to take out the guesswork and make it automatic, rather than debating every single purchase you make. So every month put aside a specific amount to go toward your car fund. It’s not only less temptation this way, but also less stress.
So when you are ready then armed with this knowledge you will be able to afford your dream car!
So what are you going to save for this year? Let me hear from you!
Teri Ann Renee Paisley
Gleaner online writer