Budgeting for a New Car – Can You Afford to Make the Purchase Right Now?

*Collaborative Post*

There is nothing worse than unexpected expenses. Even if you were expecting it at the back of your mind, there’s a good chance that if it’s a big expense, you’ve been putting it off and hoping it would happen much later than sooner. A car is a great example of just such an expense. Investing in a brand new one means there will be all-new expenses added to your budget, usually higher than you’re currently paying.

So, what happens if your current vehicle is starting to act up and you’re unsure of how much longer it will last? Can you afford to purchase a new one right now? Here are some questions and advice you can use to help you make a more informed decision.

Weighing Up Your Options – How Much Do You Need to Spend on the Existing Car?

A good place to start is by taking a look at your existing vehicle and determining how much it will cost you to keep for an entire year. What will the maintenance, payments, car insurance, and repairs cost you? If the car is in really bad shape and needs a lot of work, there is a chance it may cost more to keep than investing in a new one.

Create a Monthly Budget

It’s also important to create a monthly budget for yourself, taking into account all your expenses. This will provide you with a clear idea of how much you can possibly spend on a car payment. Obviously, you don’t want to spend more than your budget can handle.

Start Researching Various Models

Now that you know exactly what you can afford in terms of a monthly payment, you can figure out what purchase price range you’d be in. This will narrow down the options of potential models, which then allows you to start your research.

Do you need a budget-friendly vehicle? Perhaps you’d rather put off the purchase, take time to save for a down payment, and therefore afford something a little more expensive.

Don’t Forget Car Insurance

Of course, you can’t forget to factor your car insurance into the equation. A car insurance calculator can make short and easy work of this part of the budget. Check out this car insurance calculator from Quotezone. On there, simply enter the vehicle registration number and you’ll be shown quotes from different insurance providers here in the UK. And if you don’t know the registration number, you can fill out a quick questionnaire to provide the necessary details.

Would You Get Any Money for Your Existing Car?

The final thing to consider is whether you could make money on your existing car either by selling it yourself or trading it in. This money could then be reinvested in the new purchase to help bring down the overall cost.

A Big Decision to Make

At the end of the day, deciding whether or not to purchase a new vehicle is a big decision as it is a sizeable investment. Taking the time to really mull over your options will help you to feel more confident in your choice.

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