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How to Stay Within Your Car Buying Budget
Americans can’t afford their cars. Experts are reporting that record numbers of Americans are falling behind on their car loans. Needless to say, that isn’t good. We live in a country where cars are virtually essential expenses for huge numbers of people who can only commute to their jobs or to social obligations on the roads, yet we’re seeing evidence that Americans — already not exactly known for their careful saving and deep pockets — can’t afford that basic expense.
But all is not lost — not for you, anyway. It’s important to understand that car loan defaults are not just a measure of poverty and bad luck. There are also people who simply take out too much car debt. It is entirely possible — easy, even — to take out more debt than you can afford, and the loan companies are not going to be the ones to warn you. If you’re going to get the car you want and set yourself up for future financially success, you’re going to need to set a careful car-buying budget. Just as importantly, you’re going to need to stick to it.
That’s easier said than done. Car dealerships and their opaque pricing are working hard to make you revise your budget as you shop. Finding the features you need in your price range may require some research and comparison shopping. But it can be done, and here are a few things that might help.
Shop online
Car dealerships are a big part of why people hate car shopping. Car dealerships are determined to get you to spend more than you want. Their salespeople work on commission, so they are often pushy and aggressive. It’s rough!
Save yourself the stress. Shop online, where not a single pushy salesperson will be found. You’ll have incredible amounts of information at your fingertips. And you’ll be able to expand your search geographically, which might help you find the perfect car in your budget even if that car is not on the lot at your nearest dealership.
Check out auto auctions and buy-it-now sites alike, and bookmark vehicle history report sites and resale value trackers. You’ll have a more pleasant — and more cost-effective — experience if you do.
Determine your budget, and make it ironclad
If your budget is not absolutely firm, you’ll get in trouble fast. Once you exceed your budget for one add-on package, it’s easy to do it again and again for other features, unexpected tax, maintenance costs, and other stuff that you may have forgotten to factor in ahead of time.
Write down that budget, and treat it as unchangeable. Keep it on a post-it note on your computer monitor and carry it with you on a piece of paper in your pocket when you visit dealerships. It is gospel, and you must be ready to walk away from any deal that would violate your pact with yourself.
Consider new-ish cars
New cars are very expensive. Old cars can be very cheap, but they often come with higher maintenance costs. But cars that are just a few years old? Well, they might just hit the sweet spot for cost-conscious shoppers.
Your mileage will vary, of course, but you’re likely to find that certain models that suit your needs are available for less than you’d think if they’re just a few years old. Cars that were leased, cars whose owners are swapping up to newer models, and other lightly used cars are great choices. Given how much cars depreciate the moment that you drive them off the lot, it’s great to be able to dodge the first few miles of ownership while still getting a car that looks, feels, and performs like new.
