Unless you have an unlimited supply of money (don’t we all wish), buying a car is a big financial decision.
To protect against a costly mistake, it’s essential to answer a few key questions before signing on the dotted line. Here are a few to address:
1. Will you finance the purchase or pay in cash? There are benefits of both, so make sure you list out the pros and cons.
If you don’t have the money to pay in cash, your only other option is to finance the vehicle. At that point, your primary responsibility is to find the best lender and loan for your situation.
2. Can you afford the monthly payment? Just because a lender will loan you the money doesn’t mean the payment fits into your budget. It’s essential to review all the numbers before pulling the trigger.
If you have any reason to believe that the monthly payment will bog you down in the future, it’s best to avoid a purchase for the time being. Either that or opt for a more affordable vehicle.
3. What is the true cost of ownership? This goes well beyond your monthly payment. It also takes into consideration the cost of gas, insurance, and maintenance.
Once you understand the true cost of ownership, it could alter the way you shop for a car. You may soon find that some vehicles don’t suit you well.
These are the types of financial questions to answer before buying a car. Along with these, address any others that are weighing on your mind. With each answer, you will find yourself in better position to make an informed and confident decision.