How To Budget For Your Next Car

Investing in your next car is a big decision. It is one of the few ‘big’ purchases you will make in your lifetime. After your home, it is probably the most expensive thing you will buy. That means you have to take a lot into consideration. It takes weeks of planning and researching. More importantly, it takes months of saving. If you want a good quality car, you have to be willing to pay for it. However, there are plenty of ways of getting that price down.

When the time comes to upgrade your car, you often have little other choice. The maintenance payments on your current car may be enormous. Older cars cost a fortune to fix. Plus, they are expensive to run. If your old car is giving up the ghost, it’s time to move on. Perhaps your living arrangements have changed. A growing family often means a car upgrade. The same it true if you move house. Whatever the reasons, make sure you budget and get a good deal.

Buying a brand new car is the best way to ensure safety, performance and low maintenance. Brand new cars are usually more efficient too so you’ll spend less at the pumps. However, not everyone can afford the high prices of a new car. There are alternatives out there for you and we’ll look at them here. Although we all love the feel and smell of a brand new car, it is not always realistic.

Save

Whether you buy a new car, a used car or lease, you’ll need to start saving. However you finance it, there will usually be a down payment of some sort. The bigger the down payment you can afford to pay, the better deal you will get. You’ll pay lower monthly payments on a loan or a lease. You’ll also incur much less interest and you’ll pay the car off faster.

Saving requires a strict lifestyle choice. You’ll need to set tough goals and targets and stick to them. The biggest thing is that you already have a big goal in mind: the car. Once you have something to work towards, it’s easier to reach. Try to set aside money like you would rent or monthly bills. Treat saving like a mandatory outgoing. Put it in a savings account that is difficult to access. It’ll stop you from dipping in and out of it!

Lease instead of buy

If you’re struggling to make the budget work when looking at a new car, consider leasing instead. Leasing is a cheaper alternative than buying. It involves a lower downpayment and lower monthly costs. The downside is that you never own the car outright. A lease is essentially a long-term hire arrangement with the car’s owner. You pay a monthly payment to use the car for a set period. When that period is over, you simply hand the car back. The lower payments mean you can typically afford a better and safer model. You will be covered for any maintenance costs too. The downside is that the car isn’t yours and you don’t have the opportunity to sell it on.

Buying a used car

There are so many great deals on used cars nowadays that this can be a great option. There are typically three ways to buy a used car. You can go to a used car dealer like RRG Group Lexus or visit a private seller. The final way is through car auctions. Each have their own benefits, but you’ll need to know what you’re looking for in each case. Buying a used car can be tricky, but if you know what to look for, you’ll find a bargain.

It’s not always easy to know the full history of a used car. So do your research so you know how much each car should cost. Be prepared to ask for a full service history, MOT certificates and garage receipts. Take the car for a full test drive and ask in depth questions about the life and maintenance of the vehicle.

Haggle

However you buy your next car, the price is always negotiable. If you are leasing, there is always room to manoeuvre on monthly repayments. You can always haggle an extended warranty or additional extras. The same goes for new cars. The dealer will always try to add extra to the cost. Beware of what you should pay and what is unecessary. You don’t always have to pay the sticker price. When buying a used car, there are even more options available. In many cases, dealers or private sellers are desperate to get rid of the cars. Start low and see how far they are prepared to go.

Consider fuel economy

When budgeting for a car, there is so much more to the price than simply buying it. You must consider the cost of fuel and how much your new car will guzzle. The benefit of buying a new car and taking a new lease is that they will be newer and more economical. You might pay a higher price than a used car, but you’ll save money on the day to day running. Use car reviews to determine which are the best here. Cars that run a good mileage and low fuel economy are also subject to entitlements. For example, some green cars and low emitters are exempt from road tax. It’s worth taking these extra costs into the overall budget.

Running and maintenance costs

Running costs and the price of repairs should also be factored in. You may get a good bargain on a used car. However, you may end up spending thousands in the following year to keep it well maintained. The implications of a breakdown are varied, it can be inconvenient and expensive. Try to factor this into your budget before you commit to a new vehicle.

When you know what to look for, purchasing your new car doesn’t have to be expensive. Don’t ever jump into a spontaneous purchase. Take your time to save as much money as possible. You will get much better value with a large downpayment. Whether you buy new, used or lease, take into account the full costs of running the car. These will creep up on you later.