Car Buying 101: How to Stay in Your Budget's Lane

You may not be traveling as much since the pandemic entered 2020 like a bull in a china shop. Nonetheless, you still need to get where you are going, and if you live in the burbs or the boondocks, the transportation of choice is a car. That choice of car can be anything from an economy car to an SUV. Regardless of the type of car you want, your decision can significantly make a difference in your wallet. 

Whether you are buying a car for the first time, need to replace an old clunker, or had a lifestyle change, you'll want to choose a car that meets your specific needs. If you already have a budget in mind, you can quickly get a loan option through the autoloanzoom.com website. If not, let's talk about what you should do.

SHOULD YOU BUY A NEW CAR?

Let's be honest, for most of us, a new car is the second most expensive purchase you can make. Of course, a house is the first.

According to a Kelley Blue Book report, the estimated average transaction price for a light vehicle in the United States was $38,723 in September 2020. New-vehicle prices increased $940 (up 2.5%) from September 2019, while raising $23 (up 0.1%) from last month. That's why it's essential to know how to make a smart deal.

HOW MUCH CAN YOU AFFORD?

First, you really need to figure out your budget and stick with it. If you find a car that you can't pay in cash, you should verify you have enough income to cover your monthly living expenses. This includes rent or mortgage, food, utilities, insurance, and credit card payments.

WHAT PERCENTAGE SHOULD YOU BUDGET FOR A CAR LOAN?

The answer to this will vary based on your situation, but we recommend that your car payment should be no more than 20 percent of the money you have leftover each month after paying your living expenses. 

DON'T FORGET ABOUT THE REAL COST OF CAR OWNERSHIP!

Here's a sobering fact: just because you can buy a car doesn't mean you can afford it. Owning a vehicle is not only buying one. 

When planning your budget for a car, you must also consider other costs. These costs include insurance, registration, fuel, license, and personal property taxes. These costs can really add up depending on where you live, your age, and your credit score/report.

Tip! Call your insurance company before you start shopping to figure out how much the monthly insurance cost will be.

WHY SHOULD YOU CONSIDER A FUEL-EFFICIENT CAR?

A fuel-efficient car can be a wise choice for a couple of reasons. 

1. You could potentially save thousands of dollars over the life of the vehicle. For example, the current average price for regular gas is $2.19. The difference between a car that gets 20 MPG and 30 MPG comes to almost $3,000 over 5 years if you drive on average 15,000 miles a year. 
2.  You'll contribute to reducing pollution and smog in your community. Visit www.fueleconomy.gov for more info. 

When you are ready to buy a car, head over to AutoLoanZoom. They will help you get auto financing, whether you have good credit or bad credit. The best thing about their service is that you can get a loan option before you get your new car AND it’s super-fast. 

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