If you’re looking at getting a new car, this could be an exciting purchase that you can look forward to. Cars make a huge difference to your day to day life. They provide you with a means of going wherever you want, whether that’s getting to work easily, heading to see family and friends, going on a day out or taking a full blown road trip. It’s truly exciting stuff. But when choosing a car, it’s important that you take the time to consider all sorts of factors that will determine whether your chosen vehicle is a beneficial asset in your life, or something that drains you and causes you ongoing problems. A huge factor in choosing the right vehicle to suit your needs is budget. You need to make sure that you take this seriously - and setting a budget is definitely the first step you need to take in this process, before setting your heart on any particular make or model of car. Here are some steps that can help you with this process.
What is a Budget?
Put simply, a budget is something everybody should have. When you have a budget, you take your income into consideration and then distribute it out into the different things you need to pay for each month of the year. It’s the best way to manage your monthly expenses, while also ensuring that you are best prepared for life's unpredictable events, making sure you are able to afford unexpected outgoings and also giving you an opportunity to save. Perhaps most importantly, a budget will prevent you from going into debt, because it allows you to clearly see what you can and can’t afford. When choosing a car, you need to take your regular budget into account and see how much of your disposable income you can genuinely afford to fork out on your vehicle.
Setting a Spend Limit
Take a look at your budget. This should detail your take home pay and should have all essential and necessary outgoings deducted from this amount. This could include things like your mortgage or rent payments, necessary taxes, energy bills, grocery bills, water bills and financial agreements, such as insurance premiums, loan payments or credit card minimum payments. The amount you’re left over with is your disposable income - the amount you have free to spend on what you want each month without overspending and ultimately going into debt. You need to decide what amount of this disposable income you’re willing to commit to a car. Consider what your disposable income will be after these deductions to ensure that you still have enough to live a good quality of life around affording your car and other commitments. By looking into this, you’ll be able to set yourself a spending limit.
Consider All Car Costs
Remember that you need to take more than the cost of the car itself into consideration - though this does tend to be the largest regular payment for most vehicle owners. You also need to consider costs that come hand in hand with car ownership. You’ll need to pay for fuel. You’ll have to pay vehicle or road tax. You’ll need to pay for annual services and MOTs. You also need to consider repair costs. Then, you will need occasional cleaning - whether you spend money on products to do this yourself or have your car professionally cleaned. These are all essential and increase the outgoings you will have associated with your car.
Consider Additional Car Costs
For some people, a car is a project and you’ll want to carry out a variety of activities to improve the look, feel and performance of your vehicle. You might want to add spoilers, look into the best jeep 4.0 header, have your vehicle painted a different color or a whole host of other activities. Consider these costs when setting your budget too.
Choosing the Right Car
Once you have your budget, you will need to find a car that falls into that budget. Now, there are a number of steps you can take to reduce costs, but it’s important that you think of all the ins and outs associated with these decisions before making them. Here are some pieces of advice that can help you to find the right car within your budget.
New or Used
Do you want a new car or a used car? There are, of course, merits to getting a brand new car. You will have been the only owner. You know that it will arrive to you in perfect condition and most new vehicles come with a warranty that ensures any faults are resolved without charge for you in the agreed period of your warranty. Your vehicle will have low mileage and a high value. However, you should also bear in mind that the vehicle will drop a huge amount of its value as soon as you drive it, as it moves from “brand new” to “used”. You may be able to save a lot of money by looking for a vehicle that is almost new. There are many people out there selling these type of vehicles and you can get something that has minimal mileage and use for a much lower price tag.
Payment Type
You should also consider how you’re going to pay for your car, as this can greatly impact its overall cost to you too. If you have the money available, try to pay for a car in cash. This means you get the price that it’s advertised at without having to worry about interest charges being applied. Of course, not many of us have this option. If you are going to finance your car, you need to make sure that you look at all of the finance options available to you. Take time to do this before heading to any dealerships, as many will have their own finance plans that they will try to promote to you for their own benefit. Finding the lowest interest option is always going to be best. Some people find that taking out a bank loan or finding an interest free credit card with a high credit limit can prove to be a good option.
Hopefully, some of the advice above should help you to budget for your car as best possible!
