How to Create a Car-Buying Plan That Works for Your Budget and Lifestyle
“A car is not just a purchase; it’s a commitment to a lifestyle. Make sure your purchase aligns with both your financial situation and your future goals.”
– Suze Orman, Personal Finance Expert
Buying a car is a significant financial decision many of us make. It is reported that, on average, the cost of a car purchase can represent up to 30% of a person’s total assets. (ScieceDirect: The Lifetime Cost of Driving a Car)
When I bought my first car, I learned about the various aspects one needs to consider when buying a car. You cannot just walk into a showroom and bring home the first car you like in line.
Having a structured plan made the whole procedure much easier for me. So if you are also thinking of buying a new car and wish to learn to create an effective car-buying plan, then this article is for you. Read on and discover how to create a car-buying plan to suit your budget and lifestyle.
Think of Finances
Assessing the financial situation was my first step; it helped me narrow down my choices and made my final decision crystal clear. When it comes to finances, one needs to think about more than just the initial purchase of the car; for example, you should think about maintenance costs, insurance, and other fees you might need to cover.
I would suggest you add a few hundred bucks to whatever price you have in mind, just in case. Also, you can make a financial plan and think about the ways to break down the final cost of the car and make sure you can pay in installments, as it will allow you to comfortably pick any car of your choice without having to worry too much later on.
Expert advice that I feel is worth mentioning is that your total car-related expenses, including loan payments, insurance, fuel, and maintenance, should not exceed 15% of your monthly income. That’s about a fair and more than achievable goal you can take into consideration.
And think of the down payment as well, as it can lower the overall monthly installments and the cost of the car in general.
DO YOU KNOW? Over 76.67 million cars were sold globally in 2023, including both electric and non-electric sales.
Defining Your Needs
Before making the final decision, I took my time to think about the purpose of the car and my overall needs. It is wise to define and prioritize them, you can make a nice list consisting of factors such as use, reliability, maintenance, and future considerations.
Let’s take size as an example. The questions I asked myself were: do I need a compact car for city driving or a larger vehicle for transporting passengers or cargo? The same goes for purpose as well. I thought about the following factors: Am I looking for an all-purpose off-roader or just something to get me around the city block?
In those discussions, I came across a situation where I had to choose between a Chevy Malibu’s reliability, or Prius’s affordability or even an electric car came into consideration.
The point is that it is important to establish a purpose, but before you do that, you’ll have to take into account your personal needs and desires. Also, consider your future needs as well; if you’re planning on starting a family soon, then maybe your old Mustang might not be kid-friendly after all.
Do Your Homework
After arming myself with a clear goal and vision, I established my needs and the purpose of the car and thought about the budget and all the finances. With so many websites available at the moment offering different models, it had never been easier. Comparison tools and platforms made it a piece of cake; I could easily narrow down the choice to a few models, using various filters available.
FUN FACT According to Consumer Reports, the best deals on cars are often found in the last few weeks of the year, when dealerships are clearing out inventory to make room for next year’s models.
Test Drive
Never skip the test drive, never! You might ask why, well the reason is simple: you can do as much research as you want and establish all the facts, go over your plan countless times, and in the end, once you are behind the wheel is when you will get to know whether that’s the car you’ve been looking for or not.
The test drive I took, told me so much about the car, more than any fact-checking could ever basically do. I paid special attention to comfort, handling, visibility, and noise levels.
Also, remember that, if you’re buying a used car, request a vehicle history report and have it inspected by a trusted mechanic to ensure it’s in good condition.
All in all, creating a plan to buy a car requires no rocket science, it always comes down to the basics such as establishing a budget, thinking about your lifestyle and your choices, and finding something that soothes both.
But, the hard part is actually finding a car that feels right and comfortable for a long time. That’s something you might find after trying and testing a few models.
