The thrill of buying a new car is hard to beat, but the one thing which will burst your bubble is the expense of acquiring a vehicle.
Avoiding this feeling of deflation is easy if you set a realistic budget before you start searching. Ask yourself: what do you need to take into account when budgeting for a new car?
Consider fuel type & engine efficiency
One of the major running costs of any car is fuel, and at a time when gas prices are fluctuating, you need to be aware of what you’ll expect to pay to keep it on the road from day to day.
A good way to make savings right now is to switch to an electric vehicle (EV). There are drawbacks, such as limited range and the need to access a charging point at home, but in the long run EVs offer inexpensive fueling compared with combustion engine cars.
Check whether your car insurance costs will increase
Before you buy any vehicle, it’s wise to compare quotes for cover using a site like Cheapinsurance.com. That way you can see whether or not the price of your premiums will rise or fall, and you will be certain that insurance isn’t too much of a burden on your budget.
Bear in mind that you might actually make a saving on your insurance by switching cars, even if the model you purchase is newer and pricier. Comparison is the consumer’s best friend in this regard.
Explore maintenance costs
An essential part of car ownership is regular maintenance, and this can vary wildly depending on the age of a vehicle, as well as the brand.
There are several ways to make savings here; for example, some manufacturers will offer a servicing plan as part of the purchase price, which gives you ‘free’ maintenance over a certain period.
If you’re buying an older used car, servicing costs can be more variable, due to things like the scarcity of spare parts. Prestigious, luxurious brands tend to be more expensive to maintain, so build this into your budget as well.
You could make costs more predictable by purchasing a warranty, but this is a bit of a gamble, as you’re essentially betting that the cost of maintenance in the period covered will exceed what you pay for the warranty. Even so, for some people the peace of mind is worth the potential extra cost.
Investigate finance options
Plenty of people purchase vehicles on finance, rather than paying up front in cash. If you go this route, you need to know how manageable the monthly repayments on your auto loan will be, and whether you’re eligible for the best deals according to your financial status.
You’ll also have to take into account the size of the down payment that’s required to secure the finance package, and the rate of interest you’ll be charged over the lifetime of the arrangement.
Think about both the short-term affordability of any package, as well as the long-term implications of interest, before signing on the dotted line.
Last of all, assess the extent to which the vehicle you’re buying is capable of meeting your needs as a motorist.
There’s no point getting a sporty coupe if you’re not going to have enough room for the whole family and all of your luggage onboard for those long-distance road trips you take regularly. As such your budget has to be based around what you actually require, not just what your heart desires as a gearhead.