4 Financial Considerations Before You Buy a Car
1. Research! Before you enter into a deal — or even head to the dealership to peruse the lot — have a clear idea of the type of vehicle you want and what you can afford! It’s now easier than ever to find out what your target vehicle price is, thanks to the Internet. Therefore, you’ll need to do some research to find out what various vehicles cost, as well as what the dealerships in your area have to offer in terms of incentives and financing. In today’s technologically advanced world, it’s quite simple to check online for prices and current specials. 2. Make sure you’re getting the right vehicle for you and your lifestyle. Okay, this may seem very quite obvious…but you want to be sure that you’re buying a car that you can be pleased owning. Think about the number of people you’ll be transporting at any given time and the amount of luggage you need to fit. Can you fit your furry companion Fido comfortably? Is there some place to load your skis or surfboard? Is there a hitch on the back for your bike rack? Will it handle snow? Mountainous terrain? In the end, you don’t want to be stuck with vehicle payments you either can’t afford or are just simply unhappy having each month. When shopping for a car, make sure to take the time to read reviews online from such publications as Consumer Reports and Edmunds.com. At Bob Penkhus Volvo, Mazda and Volkswagen (http://www.bobpenkhus.com), our sales team is trained to help you make the best vehicle choice for your financial situation and lifestyle. We understand this is a big financial decision. 3. Decide: New? Used? Lease? Buy? The new/used vehicle debate is one that has gone on for quite some time. There are advantages and disadvantages to both and in the end it becomes a matter of personal preference and economics. Since cars are built better now than in the past, a used vehicle may be the best choice. However, if you can secure a good rebate and financing, the math may point to a new vehicle. On the flip side, leasing provides lower monthly payments than using an auto loan to purchase a vehicle. Additionally, if you don’t have enough money saved up for a reasonable down payment, you typically trade your car in every few years or you don’t drive many miles annually, a lease may be your best option. On the contrary, those that have planned financially, typically drive a vehicle till it dies and put a lot of miles on a car may find that special financing (such as 0% APR) on a new vehicle to be the best financial decision. 4. Determine how much you can pay for your vehicle. The most important advice anyone in the market for a new car needs to remember is: Don’t buy more than you can afford! Though you may be tempted by a low monthly payment, be sure to calculate the total cost of the vehicle (i.e., down payment, depreciation, fuel costs, interest, insurance, sales tax, and maintenance and repair costs). To get a good idea on how much you can afford for a monthly payment, Consumer Reports’ financial experts recommend that your total debt payment should be no more than 36% of your gross income. Using this rule, follow these simple steps to determine how much you can afford: • Calculate what 36% of your gross monthly income is • Itemize and total all your monthly payments, including your mortgage or rent, credit card bills, and other installment loans • Subtract the total of your monthly payments from the 36% figure By considering the four financial considerations related to buying a vehicle above, you will have a better chance of buying a car that you love — and can afford — for years to come. At Bob Penkhus Volvo, Mazda and Volkswagen of Colorado Springs (http://www.bobpenkhus.com), we have a great inventory of both new, used and certified vehicles that will fit all budgets, offering special financing that will allow you to get into a car that you can afford and fits your lifestyle. Disclaimer: Article submitters are solely responsible for the content of their articles. ArtiLib can't be held liable for the contents of the articles. Report Abuse | Browse By Category |
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