How to budget for car purchase?

Hi,

Welcome to the Forums.

It is very easy to overspend on a car. And that's why it’s very important that you prepare a budget and see how much you can afford. By overspending on a car you may be putting your financial security at a risk.

Here are some points that will help you in your car purchase.

• There are lots of expenses associated with a car, even after you purchase it like, maintenance cost, gasoline and insurance premium. This may not have an affect on your debt to income ratio or credit report, but this will affect your month bottom line just like other unavoidable expenses like mortgage payments, utilities etc.
  
  
• If you have funds available in the form of saving or securities then don't hesitate to pay out from your pocket for a car purchase. The only instance that I will not allow this is when you have the option of investing this money at a interest rate that is higher than the loan rate.
  
  
• Through a credit report you will have a brief idea about how much credit you will allowed by most lenders. But then it is important to remember that just because a lending institution is ready to give you more credit than what you have calculated does not mean that you just blindly go for it. Nobody knows your financial strength than yourself, so be careful before accepting higher debts. If you have any doubts than it is better to stick with your own calculation.
  
  
• Don't get emotional, if you cannot afford a car don't buy it.

Don't go beyond your means on what is typically the largest consumer purchase after a house.

Thanks,
Jerry

Budgetting the car purchase is a vital decision but before that we need to plan the whole scene so that we can avoid us getting into the general mistakes on car purchase.

• Always define your need.


• Your head should rule your heart not viseversa.


• Research it well, neglegence into this or doing no research into this matter can seriously led into the pithole.


• Always choose the dealer whom you can reach and contact easily and most importantly spend time in learning about him like his Customer Service Index(CSI).


• Learn the art of negitiation. This can make to save plenty.


• Always look around for more options available.


• And the last but not the least, think carefully about the purchase or else you will find your car running over your finances.

I have tried to highlight some of the basic things which many experts expect from the common people.

Thanks

Niicss