Getting ready to purchase a car can be exciting, but it can be stressful if you are not adequately prepared. Getting all of your finances in order to purchase a car may seem daunting, but it can easily be accomplished. If you want to ensure the most comfortable, least stressful experience, you will want to have some solid plans in place.
Calculate Your Preferred Monthly Payment
If you are planning to obtain your car with a loan, then make it a priority to estimate what you can realistically afford for a monthly payment before looking at vehicles. It’s easy to get caught up in the excitement of a car you really like, and rationalize spending more per month than your budget can sustain. If you know what your maximum monthly payment is and commit to not spending above that threshold, it’s easier to keep your emotions in check.
As you calculate your monthly payments, also consider the cost of fuel, insurance, and maintenance. Your car purchase is going to be a considerable expense, but do not forget about the smaller monthly expenses as well.
Estimate Your Down Payment
When purchasing a car with a loan, a question you will run into is how much money you will include as a down payment. Having a down payment saved can make your monthly payments more affordable and allow you to get a higher value vehicle within your monthly budget. It’s worthwhile to spend a few months saving a down payment and maximize what you bring to the table when financing to purchase a car. Down payments may also impact the interest rate you are able to secure for a loan -- and could be a requirement for some banks to finance. Make sure you understand what you will be required to have on hand so there aren’t any surprises to derail your car purchase.
Determine Your Realistic Time Frame
Once you have a reasonable estimate of the finances and costs of the car purchase, determine a realistic time frame for your purchase. Planning out your purchase in advance can be more beneficial. The longer you have to plan, the more prepared you will be. If you need the car within an eight-month period, then make estimates on how much you will save weekly or monthly. Identify your savings goals and stick to them.
Automate Your Savings Program
The most challenging part of any financial plan is committing to it. The best approach is to create an automated process that handles the savings for you. That leaves you with less decision-making when you want to make a purchase that could derail your plans. It’s easy to have the amount you plan to save withheld from your paychecks and electronically deposited to a savings account -- check with your bank for auto deposit savings accounts.
When preparing to purchase a car, it’s important to be realistic about how much you can spend and how much you are willing to sacrifice to save. Once you have the structures established, you can take a step-by-step approach to getting the rest of the plan together. With these simple tips, you’ll be ready for your new car in no time!
The CESI Team is committed to helping you reach your financial goals. If debt keeps you from living the life you dream of, contact us for a free debt analysis today and get started on the road to a brighter future!
Consumer Education Services, Inc. (CESI) is a non-profit service provider of comprehensive personal financial education and solutions for all life stages and for all of life’s milestones. Our goal is enhanced economic security for everyone we serve.
CESI is NOT A LOAN COMPANY