Buying a car, whether it’s new or used, can be an exciting purchase. However, when people go to purchase a car, they tend to focus only on the sticker price and how much the monthly loan payments will be. However, there is much more you need to budget for, in the long-run, before you sign on the dotted line. As you know, the costs of car ownership continues well after you make that last payment on your loan. So next time you go car shopping, remember to take the whole cost into account before you buy. To help you in your decision making, our loan experts have put together some quick tips on new and used vehicles, as well as some additional costs to think about when budgeting how much you can afford on your next car.
New Vs. Used
Deciding to purchase a new or used car can be a daunting task as there is a lot to consider. While new cars are always exciting to shop for and purchase, they lose value the second you drive off the lot. And while a used car may sound like a great deal, you need to make sure it’s actually worth the amount the seller is asking for. Also, the type of vehicle plays an important role in ongoing fuel and maintenance costs.
We highly recommend you do your research on not only the vehicle you are interested in purchasing, but also on how readably available parts are, customer reviews on how the servicing for this type of vehicle is, and how many times they typically need to get serviced. This can help you determine what the quality of the car you're looking at really is, and help you decide between a new or used car.
Real Costs of Car Ownership:
While it is important to be able to afford your car payments, be sure to also budget for the everyday costs that come along with car ownership (Note: the bigger the vehicle, the bigger the price tag is for everything). For instance: will you be able to afford gas for the vehicle, new tires, insurance, licensing, registration fees, taxes, repairs, and regular maintenance? Although it is very important to know if you are able to afford the monthly payments, it’s even more crucial that you can afford the vehicles everyday expenses it will require well beyond you making your final loan payment.
Calculate Your Car Loan Budget:
To help you figure out how much car you can afford, try using some of our easy online calculators: