Whether you’re in the early stages of researching a vehicle to buy, or your car is on its last leg and you’re looking to upgrade, planning a vehicle purchase is a financially demanding decision. From routine tune-ups to weekly stops at the gas pump, a vehicle is a responsibility that requires thorough planning.
Before waves of panic begin to take over, you should know there are many ways to financially prepare for a new vehicle. From minimizing unnecessary spending to responsible saving, here’s 199ride.com’s list on how to budget properly for your next car.
Do the Math
The first step to budgeting begins long before you begin looking at vehicles to buy. To start, create a budget calendar and establish “checkpoints” along the way to keep your saving on track. Various websites and mobile apps can help determine a comfortable amount to save. This can be done by calculating your income as well as your monthly expenses.
Once you have an idea of your bills and take-home pay, calculate how much you can afford to pay each month. Don’t just consider an auto loan. Factoring in monthly fuel charges and insurance, as well as registration and tax fees, will help keep your budget realistic. Having a firm grip on your income and monthly debt will give you an idea of how much you should save for a down payment and the loan amount you can afford to pay each month.
Keep Track of Your Expenses
Now that you know how much money is needed, it’s time to begin saving! One of the easiest, most beneficial ways to contribute to your automobile savings is to analyze your spending habits. Tracking your daily expenditures helps you pinpoint unnecessary purchases so you know how much you can save by spending smart.
As you begin tracking, continue with your normal routine. Don’t intentionally skip the coffee shop if you’re a regular visitor. Instead, record each and every dollar for one week to see where your money is going and what expenses you can temporarily cut as you budget for a new vehicle.
Weekly treats such as dining out, going to a movie, or getting a manicure can quickly add up. If restaurants are a regular part of your weekly routine, you may be surprised to find that cooking at home for one month could save you enough money to pay your car insurance!
The same can be said for packing a lunch versus hitting up the deli on your lunch break. Small changes can help you cut costs without dramatically altering your lifestyle. By being mindful of your spending habits and scaling back on unnecessary purchases, you can apply more of your money to savings and inch your way closer to owning the vehicle of your dreams.
Don’t Just Save Now, Plan for the Future!
Once you’ve successfully saved for a down payment, it’s time to consider the long-term financial future of your vehicle. Because your overall vehicle budget also includes the cost of repeat expenses, like routine maintenance and fuel costs, it’s important to factor these services into your budget.
According to AAA, the average cost to own and operate a vehicle is $8,558 per year. This accounts for the price of fuel, insurance, maintenance, and applicable finance charges.
Establishing an ongoing vehicle fund can help you stay on top of routine maintenance charges and insurance fees. While the price of gas is continually changing, you can cut down on trips to the gas station by carpooling and planning your route before you leave the house.
Separate Your Wants from Your Needs
Now that you’re working on saving up and have a realistic monthly budget for auto expenses plotted out, the shopping can begin! However, it’s smart not to get carried away. All too often, prospective car buyers are looking to find a car that satisfies all of their wants but fail to consider vehicles that provide the basic needs.
When shopping for a new automobile, focus on what features you need most. Whether it’s a third row of seats or a hatchback for your kids’ sporting goods, begin your search with practicality in mind. With proper budgeting, you just might find a vehicle that satisfies both your needs and your wants!
199ride.com Has Vehicles for Your Budget
If you’re ready for a nicer, newer™, worry-free vehicle, but are unsure if your budget will allow it, visit 199ride.com today to learn how you can end up in the driver’s seat of the vehicle of your dreams!
199ride.com has dealerships across the state of Wisconsin, with four convenient locations in: Green Bay, Appleton, Wausau, and Antigo. We work with your budget and credit score to find reliable vehicles. Don’t wait any longer to find the vehicle right for you!
disclosure: we may have been compensated for this post. We would not work with a company that we didn’t feel was a good fit for our readers and hope you learned something useful.