(And if you’ve got kids, you know they’re just going to spill grape juice all over that brand-new car anyway.) Trust us, a used car is the way to go! And yes, there are still plenty of reliable used cars out there. After one year, a car loses around 20% of its original value. But you waste so much money when you do that! In fact, you shouldn’t even consider buying a brand-new car unless you’ve got at least a million-dollar net worth.ĭave's easiest money-saving tip: See if you're over paying for car insurance. It seems like a better idea (and more fun) to get a shiny new car with that new-car smell. Having a firm budget and paying in cash are both powerful negotiating tools. Once you land on a number you can spend out of pocket, decide you’re not going above it-no matter what promises the dealer tries to throw your way. So, make sure the car you’re looking at won’t push you over that line. And things with motors depreciate big time. Why? Well, you don’t want too much of your wealth tied up in things that depreciate (or go down in value). The total value of all your vehicles shouldn’t be more than half your annual income. If you’re planning on replacing your current car, check out Kelley Blue Book to get an estimate of how much it might be worth if you trade it in or sell it. Do you have debt you want to get rid of? Are you saving for a down payment on a house? You may need a new vehicle, but remember: Every extra dollar you put toward a car is one less dollar you could put toward something else. You also need to ask yourself where buying a ride fits in with your other financial goals. Look at your bank accounts and see what you’ve got in savings. (Spoiler alert: It’s enough to make you steer clear of a car payment.)īut do you actually know how much cash you have to spend on a car-and we mean in total, not just on a down payment? Here are a few factors to help you find out: If you’re still not sure, use our car payment calculator to see just how much more a car loan would cost you. Not only do you end up forking over thousands more when you take out a car loan or lease a car, but do you really want a gigantic car payment weighing you down like a modern-day ball and chain for the next six years? You’ve got to take the idea of getting a car payment completely off the table. And by money, we mean cold, hard cash-because a car you can afford is a car you can pay for in cash. Know how much money you have to work with.īefore you can know what to spend on a car, you need to know exactly how much money you’re bringing to the table. Here’s how to calculate how much car you can afford:ġ. We’ve got some steps to help you narrow it down. Your price range depends on your income, how much money you have in savings, any trade-in value, and your overall budget. When it comes to how much money you should spend on a car, there’s not really an exact number. How to Figure Out How Much Car You Can Afford Because we want you to own your car-not have your car own you. We’ll break down what that means and walk you through how much you should spend on a car. And as a general rule, the total value of all your vehicles combined shouldn’t be more than half your annual income. ![]() ![]() Here’s the deal: The car you can afford is the car you can pay for in cash. ![]() ![]() Either way, you’re in the market for a new ride. Or maybe you’re just tired of driving a car that’s older than a college student (hey, Rhonda the Honda has served you well all these years). Maybe your Kia went kaput or your Toyota took a tumble.
0 Comments
Leave a Reply. |
AuthorWrite something about yourself. No need to be fancy, just an overview. ArchivesCategories |