The Things People Forget When Budgeting For A Car

Posted by at 15 January 2019, at 23 : 12 PM

The Things People Forget When Budgeting For A Car

Budgeting for a car is a big part of life. Most of us will consider it a necessary expense at one point in our lives – we didn’t spend thousands learning how to drive and booking a test just to let the skill squander away on public transport and in the passenger seats of our friends’ cars. But we’ve got to schill out a lot more money to make sure we at least have a functional car that can get us from A to B, if not the one of our dreams. But what things should you need to factor in?

Well, there’s quite a few points people forget in their quest to become a vehicle owner, and it comes back to bite them once they’ve signed a deal with a smile on their face. They’ve got a lot more money to spend, and they didn’t even realise it. So let’s make sure you’re not making the same mistake! Here’s just a few of the most important factors buyers tend to forget about when it comes to purchasing a car.

Including the Loan

If you’re out to buy yourself a new car, and you don’t want to go second hand or pay on a scheme, then you’re probably going to need to take out an auto loan. These make sure you can finally put down a payment on the car of your dreams, that you’ve been watching and waiting for for a long time now, and it’s going to be hard to manage the price without one.

But that means you’re going to have to budget the loan in as well, seeing as it’ll make up a hefty portion of your car budget. There’s going to be regular monthly payments you’re going to have to keep up with, alongside paying for the car insurance and any modifications you want to make, as well as the weekly fuel top up. Altogether, this is a very top heavy sum, so you’re going to want to be sure about the amount you can borrow from the get go.

Thankfully, it’s quite easy to work out what kind of loan you can manage, as there’s a few ground rules to keep you on the straight and narrow: never borrow a sum that you can’t keep up with by schilling out 15% of your income each month, and if you can help it, try to cut this sum down to 10% at the most. You’ve still got your mortgage/rent, and all your food and bills to pay for as well, so this is quite a generous amount when you think about it!

There’ll Be a Big Down Payment

Down payments make sure the car you want is yours to keep from the moment you see it, and don’t allow any other buyers to undercut you at the last moment. And the bigger the down payment you put on the car you want, the less chance you have of falling into debt as you try to pay the vehicle off.

Not to mention, the more money you can sock into the down payment, the better the interest on the car will be, and it’s much more beneficial for your credit score as well. You’ll own a huge share of the car right away, and you’ll only accumulate more and more ownership over it at a much faster rate than anyone who settled for less than 20% when it came to budgeting for a down payment.

You’ll Have to Undergo Repairs at Some Point

Let’s get into the more practical side of things. Once you’ve bought and financed the car, you’re going to need to take care of it. And unless you want to constantly have to budget for a Car Accident Lawyer to make sure you’re always compensated after a part breaks off on the road, you’re going to need to manage some repairs every now and then.

The maintenance cost of car is going to be 40% of your budget at least, over the next three to five years. And that’s an awful lot when you consider that the other areas independently take up 20% at max! Car maintenance consists of tyre changes, engine repairs, replacing brake pads, monitoring fuel lines, making sure your radiators haven’t burst – the list can go on and on.

So, budgeting for your car will take a lot of time and effort, and you’re going to have to double check and then check again before settling on a car price.

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