How Much Can I Afford for a Car?
It doesn’t matter if you’re a first-time buyer or you’re getting another dependable used car to add to your collection. Having a budget doesn’t just help you narrow down your options; it can also make driving off in your new-to-you set of wheels more affordable.
If you’re in the market for a used car, here are a few helpful tips to help you find out how much you can afford for a car.
Car Affordability: Budgeting Basics
There are tons of tips that can help you afford a car, but creating a budget is key. Again, having a budget is going to make it easier to find the right vehicle for lifestyle and budget.
The first thing you need to do when creating a budget is to consider your income and how much you want to spend on your car. Whether you’re buying new or used, it’s recommended that you spend no more than 15% to 20% of your annual income on a vehicle. If you’re thinking about financing, try to spend less than $10% on monthly payments.
However, the amount you want to spend shouldn’t just include the price of the vehicle or its monthly finance payments. You also need to factor in insurance costs as well as gas and other routine expenses to get a more accurate number of what you could be spending on it once you get behind the wheel. Plus, since it’ll need maintenance and repairs throughout its life to preserve its condition and performance, you’ll want to keep those costs in mind, too.
As soon as you calculate your income and an estimate for your car-related expenses, you’ll have a better idea as to which options are going to work best for you. From there, you can start narrowing down your list until you find the one that’s a perfect fit financially.
How to Make Buying a Car More Affordable
In addition to creating a budget and sticking to it, there are a few other things you can do to make buying a car more affordable. Here are some of the most common tips to consider:
Trade in Your Current Car
If you’re looking to upgrade or replace your current vehicle, a good way to make the process more affordable is to trade it in. The value of your trade-in can be applied to the price of the car you want, so you can save a bit more on your purchase. It can also help reduce monthly payments if you’re planning on financing.
Make a Down Payment
Are you a first-time car buyer? If so, consider making a down payment to help you save on a vehicle. Like trade-ins, a down payment can help reduce the overall price and monthly payments of a new or used car. It can also be helpful if you’re looking to buy but don’t want to get rid of your current vehicle just yet.
Boost Your Credit
Financing is a great option for many car buyers, but if you have no credit or low credit, you’ll want to take the steps needed to improve it. While it is possible to get good financing with bad credit, it’s best to improve your credit, especially if you’re going to want to upgrade to another model in the future.
A few easy ways to boost your credit can include limiting the number of credit accounts you open in two years, paying the full statement balance of your credit accounts on time, and keeping low balances (less than 30% of your credit limit) on your accounts.
Find an Affordable Used Car
There are tons of tips to help you afford a dependable vehicle. However, going to a dealership with a huge selection of quality, affordable cars can make things even easier!
If you’re in the market for a cheap used car, visit any one of Val-U-Line®’s nationwide used car dealerships! With hundreds of options all priced at or below $14,999, you can hit the streets in a pre-owned vehicle that fits perfectly with your lifestyle and budget.
Contact us to learn more about our affordable used car inventory today!