You need a car. You donâ€™t have a lot of money. Itâ€™s a classic problem, but what do you do about it? Hereâ€™s how to afford a new vehicle without busting your budget.
Focus Hard On Creating A Budget
Create a budget and stick to it. No matter how many times this advice is given, it seems like itâ€™s forgotten almost immediately as soon as financial trouble strikes. A sound savings plan is one that gives you access to your money when you need it.
It should also be something that teaches you discipline. Saving money is hard because there are so many things competing for your dollars. A shiny new iPad, a vacation, or a new smartwatch. These things will derail you quicker than you think.
Aside from a savings plan, be willing to budget an amount that youâ€™d be willing to spend on loan payments. Most people canâ€™t afford to buy a car with cash. So, they have to finance some of it. The less you can finance, the better. But, when you do have to finance, make sure you can afford it.
Look At The Total Price, Not Just The Monthly Payment
Look at the total price of the vehicle, not just the monthly payment. When a vehicle is out of your price range, some salesmen will pressure you into buying by switching focus to the monthly payment.
Itâ€™s a covert way of hiding the true cost for the vehicle. If the salesman can get you to focus on the monthly payment, he can make the car look cheaper than it really is.
If you remain focused on the total price of the vehicle, you can cap what you spend and get a loan that doesnâ€™t go on for 5 years.
These used cars at stlmotorcity.com are a great place to start looking. Remember, focus on price and compare various vehicles so that you know what youâ€™re getting for the money.
Factor In Fees and Interest Charges
Donâ€™t forget to add in fees and interest charges to the total cost of the vehicle. If you do finance, ask for the total interest or finance charges before you agree to the deal.
You might be surprised by how much a vehicle costs once you factor in the financing. A $10,000 vehicle could cost you $15,000 or more, depending on the interest rate. Interest should be included in your spending cap.
Hunt Through The Forums
Hit up the forums for your favorite vehicle or a vehicle youâ€™re considering. This is probably one of the best moves you can make. Toyota forums will have amateur and professional mechanics lurking in the threads and are usually willing to help out a newbie.
Forums are also a great place to learn about common vehicle problems with a specific make or model. While you could hunt through the technical service bulletin (TSB) listings for the manufacturer, the forums will tell you about personal experiences. Sometimes, these donâ€™t match up with what the manufacturer discloses publicly.
For example, a manufacturer might put out a TSB for a car, and cover it under a warranty. You take it into the dealership and they fix it right away. Problem solved, right? Not so fast.
Not all dealers are created equal. Maybe dealers are having trouble reproducing that problem and so they refuse to do the service work. Suddenly that problem becomes your problem.
Forums are where this kind of â€œundergroundâ€ information comes out and it can dramatically influence your buying decision.
Walk Away When Itâ€™s Not A Good Deal
Sometimes, you have to know when to walk away. When itâ€™s clear that the dealership wonâ€™t work with you, or you canâ€™t find the right vehicle in your price range, you have to give up and move on.
A huge mistake most people make is getting trapped into thinking that they need to have a vehicle from the dealership theyâ€™re at right now. Another mistake people make is getting too emotionally attached to a vehicle and letting that drive the purchase.
You should be willing and able to walk onto the dealerâ€™s lot and walk off without a vehicle. Think about it like this: you really donâ€™t know what youâ€™ll find when you show up to a dealer. The car that looks pretty on the website could be out of your price range or it might not feel right when you take it out on the road.
Whatever you do, donâ€™t let the dealership pressure you into buying.
Jeremy Bend is a financial advisor. He likes to write about money topics online. His articles can be found mostly on finance and money sites.