How to Choose the Right Car
In a perfect world I’d be driving a Porsche Boxster Spyder. Unfortunately if I did own one I’d be living off ramen noodles and living in a cardboard box under a freeway underpass, selling plasma to fill the gas tank. There are dreams and there’s reality.
Finding the right car as a balancing act between the two. You should love your new car, but on the other hand you shouldn’t sacrifice your lifestyle to drive it. Here are a few guidelines to consider when choosing your next vehicle.- Begin by researching car prices, pick 4 or 5 models you like and compare.
- Review reliability ratings as discussed in this earlier blog entry, to avoid added maintenance expenses down the road.
- Find out the trade-in value of your current vehicle, this amount can be added to your down payment.
- Start saving for your down payment, you should put down as much as you can afford, preferably at least 20%.
- Calculate monthly payments based on available auto loans, remember you’ll pay less overall if you choose higher monthly payments. Depending on your credit rating you should pay 7% interest or less.
- Itemize your monthly bills, rent, credit cars, loan payments, etc.
- Subtract the total of your monthly bills from 36% of your gross monthly income, this will give you an estimate of the monthly car payment you can afford.
- Factor in additional costs of purchasing or owning a new car, such as taxes, insurance, and registration fees.
- Talk to people. Ask people about their experiences with the vehicles you’re interested in.
- Test drive. Visit dealerships and try multiple vehicles.
It’s a lot to consider, but in the end buying a vehicle you can afford will improve your car buying experience tenfold. Enjoy a car that suits your lifestyle without sacrificing your lifestyle.
Have you ever purchased a car out of your price range? Or found a less expensive vehicle that turned into your dream car? Please tell us in the comments.
