Many of us need a set of wheels to get us from one point to another. It may be for the commute to work, too be able to enjoy different places with the kids on the weekend. Or even things like making life a little easier such as being able to nip to the shops when you run out of bread and milk. However, budgeting for buying a car can be a tricky one, so here are the things to consider to help you stay within your means.
Think about the budget as a monthly or overall spend
When you are purchasing a car, you can often get a little too preoccupied with the overall cash price. Which is fine, if that’s exactly how you are going to pay for it. If you have. A lump sum from savings or you have gotten a loan elsewhere, then that would be your budget. However, many people consider buying cars on hire purchase, finance or lease, which means that instead of it being all about the cash price. It is more about how much you can afford monthly. This may surprise you as what you can afford monthly may equate to a different cash price for the car. Enabling you to spend more or look at a lower price instead.
Additional running costs
Budgeting for a car isn’t just about buying it, you also need to think about the running costs. These are things that may cost you each week or month such as fuel, or it could be the costs you have to pay once a year such as servicing. Then you have the unforeseen costs such as repairing damage if you scratch or dent the car, or needing to get it fixed when it breaks down. Taking time to factor in some of these costs will help you to be more prepared with your additional spending.
What about insurance?
The one cost that you need to think about that you leave as an afterthought is the car insurance side of things. Sometimes changing your car, maybe upgrading it to something better means that you need to pay out more in insurance. This is when it is worthwhile to compare auto insurance rates to ensure that you are getting the best deal. Some insurance companies will be cheaper than others. And it can be interesting to see what is also included in the policies such as hire cars or legal covers.
Finally, it may be time to start thinking about shopping around and not purchasing the first car that you see. It is always going to be beneficial to look online, compare prices, compare models and manufacturers and visit different dealerships. This gives you the chance to ensure that you are making an informed decision and that you are getting the best possible deal.
So there you have it, some suggestions on how you can budget for your next car purchase. Let’s hope that it doesn’t cost you the earth.
A millenial mom (of two boys) who has passion in makeup and motherhood in between.