So, you've decided to buy a car. The first thing on your mind is finding a car that your budget will allow. As most of us know, the hardest part of buying a car isn't looking at different models but in determining what type of car you can really afford.
The most important takeaway from what we've said is the phrase "really afford" because paying for a car doesn't stop when you leave the dealership. The unfortunate truth of the matter is that most dealers will sell you a car that's beyond what you need, and some lenders will lend you more money than you can afford. This particularly dangerous combination requires some self-awareness, commitment, and discipline on your part to make sure that this doesn't happen to you.
Assess Your Real Budget
As it so happens, many car owners who've purchased their car based solely on what model they wanted, are also the ones who then had to rethink their entire budget to fit into that vehicle. Going by preference, alone, is a slippery slope that may end up with you buying a car that's beyond your budget.
To avoid it, however, you should create a household budget. What you need to do is to see your exact net income and how it matches up to your expenses. You should include everything on the list; from your monthly bills to that daily cup of coffee, or candy bar from the vending machine.
If you already own a car, chances are you're making payments. Along with the money spent on gas, the insurance premium, and upkeep for the whole year should be a somewhat good indicator of what you have to pay for the new car after leaving the dealership. Together with your other, everyday expenses, your total car expense shouldn't be a burden on your budget and should not exceed your income.
Search for What You Can Afford
Contrary to what some people may say, a car is not an investment unless you're using it strictly for business-related purposes. Otherwise, it's an appliance, like an AC, a washing machine, or a microwave. Even if bought new, it's price will drop by as much as 30% the moment the rear wheels exit the lot. It is why you should approach the issue with this mentality.
The best way to proceed is to make two lists - a needs list, and a wants list. In the needs, you add things like the number of seats, gas mileage, type of transmission, etc. In the wants column, you add the features you want like leather seats, sports steering wheel, xenon headlights, etc.
Mike Duman Auto Superstore has an inventory search engine that allows you to research cars by several criteria, including specials, or under 10k. When you look for a vehicle, use the budget you have at your disposal, and filter each vehicle through the needs column. Once you have several that fit both your needs and your budget, compare them against the wants list. Whichever has the most, is your new car that fits your budget.
For a more thorough analysis, go on Nadaguides, as it provides you with the annual average cost of all related expenses for the models you are considering.
Once you've decided on several models that fit the criteria mentioned above, stick with them and don't budge. Some salespeople make a habit of pushing customers to buy something they don't want or can't afford. Just say no and walk away.
At the Mike Duman Auto Superstore our no pressure sales staff and our financial experts work with you to get you into a vehicle that you can “really afford.” Our goal is to create lifetime customers, not one-time deals. Stop by or call today - 888-203-7766.