Buying a vehicle is always a huge financial commitment. There is a reason why it isn’t recommended you buy a car while you are trying to pursue a mortgage or secure a large loan, and that is because buying a vehicle through financing is a huge commitment. When it comes to bringing that cost down, you need to look at the problem from every angle.
Calculate Your Budget
The best way to choose a vehicle that you can afford is by starting with your budget. The budget in question here isn’t actually the upfront cost but rather the ongoing monthly costs. Part of these monthly payments will include your vehicle payments, yes, but your insurance and running costs will also play a huge part in how much it costs to own and operate your vehicle.
The reason why you’ll want to explore your monthly cost is to ensure that it fits your budget. If you end up struggling at the end of each month because of operating and running costs, then your vehicle is going to be a source of stress.
Calculating the budget and comparing it to your income is a good way to understand when a vehicle is affordable or not. Never exceed your monthly budget.
Monthly Budget versus Upfront Cost
The reason why you will want to know the monthly budget and running costs of a vehicle is simple. Sometimes, more expensive vehicles upfront can cost you less per month. How? Because they cost less to run.
Depending on where you are running, costs may include:
- Congestion and road fees
- Fuel costs
- Parking costs
Running costs can fluctuate significantly from vehicle to vehicle, so don’t immediately look at monthly repayments as the only cost that matters. What used car finance options you can apply for will also change how affordable your vehicle is, and there are multiple ways to approach your financing options as well. Taking the time to work out exactly what your monthly financial commitments will be monthly and overall is a great way to understand just how affordable your choice is.
How much can it earn you?
Luxury vehicles are often used by drivers and companies providing chauffeur services and owning a luxury vehicle can still give the option to rent this out (subject to specialist insurance). If you are using the car for your personal use, but are also a chauffeur, why not kill 2 birds with 1 stone and get a suitable vehicle for both eventualities, using for business some days, but giving you the vehicle to use yourself the rest of the month
New, Used, and the Best Ways to Save
When it comes to making your next vehicle purchase affordable, the best strategy is to buy used. Buying new sounds like a great idea because you get the latest features, and the warranty is in effect, but the depreciation cost on vehicles is incredibly high.
What depreciation means is that the value drops immediately after you buy it. You could buy a new vehicle, drive it home, and return it the next day and not be able to sell it for the same price. The best way to save is to instead find a barely used, new model used vehicle. These vehicles are often only a few years old and were barely driven. By choosing this type of used vehicle, you can avoid that huge initial drop in value and save on the upfront and ongoing costs.