Money Talk With Slater

Making Money Across the Board

How to Save Up for a New Car (Part I)

Cars come with a hefty price tag.

Cars are costly. According to research, the average cost for a new automobile was over $31,000. And used car prices are costly too. Research predicts the average used the car up to eight years old costs over $15,000.

In fact, after rent or mortgage payments, car loan payments are the next largest monthly budget item, so it’s vital that you understand how much for a vehicle you can truly afford and shop appropriately.

The cost of a car is just the baseline. Also, you will need to figure in insurance costs, sales tax, registration fees, and finance charges if you cannot save up and pay cash for a vehicle.

If you’re purchasing new, your warranty has to cover numerous big repairs for three years or so, but it won’t cover maintenance such as a new battery, oil changes or new tires or windshield wipers. With numerous used cars, you won’t get a warranty. You must be confident that the model you pick will have low-cost repair costs. Use a budget app to budget for a vehicle.

Car Loans

If you can save up to pay for an automobile with cash, you won’t pay finance charges and you won’t have a car payment every month. Though, most folks have to borrow to buy a vehicle. Even if you plan to get a car loan, you should use a budget app to help you incorporate the cost of the car into your monthly budget.

If you have a car loan, it’s solid if you can make a 20% down payment. If you can’t do 20%, you should possibly think about getting a cheaper car, or wait until you can put 20% down. A down payment under 20% puts you at a big risk of becoming “upside-down” on your car loan, where you owe more than the vehicle is worth.

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