Shopping for a new car feels awesome, especially with so much excitement around, right? Well, to make a right purchase, one must take care of some important things and plan carefully.
There is much more than the sticker price that you need to consider while planning your budget. Deciding the budget for new car isn’t that complex. The following pointers will help you greatly in getting the car that you can afford sooner!
Importance of careful planning!
While buying a new car, you must plan to spend 10% to 20% of the monthly income on the automotive expenses. It should be noted that the warranty may not cover routine maintenance like battery, oil changes, tire replacements, or windshield wipers.
While you determine a new car budget, make sure to consider all the aspects related to it. It is important to note that everyone has different situations, so you would need to set up your budget according to your own debts and income.
Some basics about Long term and short term financing
A long term loan is basically to finance the purchase of home, new car, consolidate a debt, etc. This kind of loan option has competitive interest rates. So, it is important to compare several financial institutions to end up finding the one offering lowest rates. These kinds of loan options are generally spread over long period.
This loan option can make it easy for you to budget for your car. However, you will be required to complete lengthy application and qualify for getting the loan. Some long term loan options may even end up being double of the loan amount! So, choose your option carefully before making a final decision.
On the other hand, the short term financing options are ideal for times when you require clearing up the outstanding balance for any bill. You generally don’t require a large credit to qualify for the loan.
These kinds of loans generally need to be paid within 2-3 weeks. This loan option shouldn’t be considered by you if you want to get a loan for expensive item such as a car.
When deciding to buy a new car, be mentally prepared for higher expenses than the cost for used car. So, consider the above points and be ready to buy the car that best suits your budget!