How to budget for a new car

By: deeperStates Tech

Is a new car in your sights? Avoid getting carried away by that snazzy new model. Before anything else, take the time to set a budget and make sure you stick to it.

 
How to budget for a new car

If you are still thinking about how to begin, here are some tips on how to go about it

 

1. Have a realistic assessment of what you can afford.

Take a hard look at your finances, including your existing loans and mortgages, and crunch the numbers to see how much you can comfortably add to your existing amortizations. In addition, factor in other costs that come with car ownership, including repairs and maintenance, insurance, fuel, registration, and others.

2. Scour the market for options

Research on the prices of various car makes and models, including brand new and used cars. This will give you a good idea on what’s available on the market and how much you can expect to pay for a new car. Narrow your search to what you can comfortably afford using the information from your research.

3. Know your needs and preferences

Come up with a list of car features to look for. Separate the list into two categories – the features you simply can’t compromise on and those that you want but can do without. Items that might fall under your “must have” category include the amount of space, seating capacity, and safety features. Those in your “want” category may include the extras like a smart system or an entertainment system. Compare how much the extras can add to the cost of a car and weigh if your budget can fit them in.

4. Invest in safety

Keeping within your budget doesn’t mean compromising on safety. Check on potential cars’ safety ratings with the Australian New Car Assessment Program, and make sure you’re getting a safe vehicle that’s priced within your budget.

5. Consider a substantial down payment

The higher your down payment, the better the loan terms you can obtain. Paying more money upfront can help keep your monthly amortizations down, shorten your repayment period, and result in lower interest rates. The ideal down payment rate is 10% to 20%.

6. Find the best financing for your car

Look into various car loan products and compare the benefits of each. Find one that best suits your present and future financial situation. Your choices include:

  • Fixed interest rate loan
  • Dealer financing
  • Early pay off options

 

7. Simplify it.

Want to simplify the process? We at fundit can help. We’re a convenient one-stop shop where you can buy the perfect car and get the right financing for it. And we are always glad to help you get that snazzy new model as simple as possible!

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