Any time I get a raise, I start thinking what I can do with the extra money in my pocket.
My first few raises went to practical things like paying off my debt, upgrading my apartment, and investing in stock. With my last raise, it took me some time to figure out what I really wanted and needed to spend my money on. But after a long day driving to the office, I finally figured it out. It was time to budget for a new car.
When you’re thinking about buying a new car, there are more things to budget for than just the monthly payment. To figure out just how much you can afford to spend on a new car, here’s what you should consider.
What Upgrades do I Need?
My first car was a gift from my mom. I had no idea the floor mats, leather interior and bluetooth system that I had grown to love were considered “upgrades.” When you start shopping for a new car, adjust your budget to include upgrades you can’t live without. Your budget may shift after looking at the cost of your required upgrades.
Can I Afford for my Insurance to Go Up?
If you’ve had an older car, you’ve probably enjoyed low insurance premiums for years. Since new cars hold more value than older cars and can cost more to repair, you may see an increase in your insurance. Talk to your insurance agent BEFORE you buy a new car to get an idea of how much your premium could change.
How Much Do I Need for a Down Payment?
Signing up for the $0-down car payment special is a great deal if you can afford the required monthly payment. If you want your monthly payment to be less than the offered amount, be prepared to bring a down payment. The more you put down, the less your payment will be.
Will this New Car Fit in My Budget for 3+ Years?
Unlike apartment leases, cars are a long-term commitment. To get you a great rate, car dealers may help you sign-up for a three to six-year payment plan. If you don’t see yourself in the same financial situation for that amount of time, you might not be ready for a new car.
Answering these questions can help you plan a better budget for your new car. When you work hard, you deserve to drive what’s the best for you.
Looking for a car now?
Check out Cars.com to find cars for sale in your area.