Simple Ways to Budget for Buying a Car
- Jun 4, 2015
- Our Blog
- Posted by Andrea Prelorenzo
- Comments Off on Simple Ways to Budget for Buying a Car
The automotive industry has blessed us with so many options that it is not tough to budget for buying a new car that suits your needs. Planning a reasonable budget for buying a new car may take you to the next level of vehicle choice and step into the category of luxurious and comfortable sedans.
Decide Between Buy or Lease
Most often, leasing a car sounds like a pretty good option to many, but it may be a trap. Read the advertisement carefully and add the ‘other’ fees which may include driving fee, repair fee, extra mileage fee, general wear and tear fee, and a lot of other fees which you cannot even imagine to exist.
In contrast, buying a new car on cash is a dream for most people, but we know that saving up for the car of your dreams may give you many a sleepless nights. If you are thinking about buying a new car, here is a technique you can use to find out whether you can save enough money for it.
The average market value of a car reduces by 11-25% after every five years, depending on how much the car is used. The realistic calculation says that after five years, the worth of the car (at the time of first purchase) reduces by 40%. This is why the dealers offer you loan incentive as low as 2%. At very realistic notes, if you carefully search the automotive forums, you will definitely be able to find a new-looking car that is not of a very old model and functions well also.
So, when buying a new car on loan, keep in mind that you are budgeting for a long duration and the car will lose its worth gradually. By the end of the fifth year, the car’s condition will be similar to the one you may purchase today at almost half the price.
Are Used Cars Safer?
The maintenance budget, repair cost, and car reliability depends totally on the condition of the car and the way it was kept by the former owner. With careful approach, you may find a reliable car that does not require much repair and maintenance. Remember that lesser usage of the car does not represent good condition. Ask an automotive expert/technician to check the car’s condition before finalizing the deal. Things to check include these.
- Engine condition
- Fuel economy
- Interior (upholstery, floor and other)
- Steering wheel
- Noise and vibration
- Road turn-over/acceleration
- Coolant condition
- Test drive for 30 minutes at least!
Buying a new or used car is an investment which should be made after considering advice from the experts.