3 Expert Tips on How To Determine Your Used Car Budget
Whether you're buying a used car for the first time or a seasoned veteran, it's never easy to determine how much money to spend on one. You may think you can afford $20,000 but get sticker-shocked when you see what's out there. Or maybe you'll start looking at vehicles that cost less than your monthly rent and wish there was something more within your budget range.
Here are some expert tips to help you make the best decision for your wallet and lifestyle.
Calculate Your Monthly Expenses
Monthly expenses are costs you regularly pay, including housing, utilities, food, insurance, and transportation. If you have other recurring expenses like student loans or gym memberships, add those in. Next, calculate your monthly income by looking at your take-home pay after taxes (not including any bonuses) from all sources — salary or hourly wage, tips or commissions, investment gains/losses, etc.
Finally, calculate your net worth by subtracting any debt held against assets owned (bonds purchased with cash, for example). The result of these calculations will give you an idea of what kind of budget is realistic for buying a car based on current conditions.
Clear Your Existing Debts
If you have any debts, you should clear them before getting a new car from used car dealers Calgary and area. While some people like to have a certain amount of debt on their credit cards and student loans, a car loan is different because the risk is higher. If you default on your payments or get into an accident, it can be much more expensive.
To start paying off your debt, take stock of what you owe and prioritize your payments according to interest rates. If one of your debts has an exceptionally high rate (like 15%), focus on paying that off first so that you don't pay more in interest than what was originally borrowed.
If your boss allows for flexible hours or working remotely at home, try signing up for side gigs or freelance work so that every extra dollar goes straight toward paying off those bills.
Test Drive Your Options
Start by test-driving a few options in your price range. You want to drive a variety of cars and brands, so don't just go for the first one you see. And if you can't find exactly what you want on the lot, ask the used car dealers Calgary and area if they can get it for you.
Once you've narrowed your options, take each car for a spin, and pay attention. This is where things start getting personal. If a model doesn't feel right when it's zooming past 70 miles per hour, that's not the car for you. The same goes for automatic vs. manual transmissions. Which car feels more comfortable is completely up to personal preference, but keep in mind that automatics are typically cheaper.
Now that you know how to determine your used car budget, you can feel confident that you'll be able to buy the right car. As soon as your budget is set, start researching cars and test-driving them until you find one that meets your criteria. This will take some time, but it's worth it when you find the perfect ride. Check here for Mazda car manual.