According to Kelley Blue Book, the average cost of a new car is approximately $36,000. For some, this may be the perfect price point. For others, it may be entirely too expensive.
As you shop for a new vehicle, it’s important to do so with your budget in mind. If you don’t, you could fall prey to all the bells and whistles, thus paying more than you can comfortably afford.
Here are three basic things to keep in mind when deciding how much to spend on a new car:
• The cost across the board. In addition to the sticker price, consider the long term cost of owning the vehicle. How much will you spend on fuel? How about maintenance? What about insurance? The more details you consider the easier it is to decide what you can and can’t afford.
• Your needs. There are many things you’re looking for in a new car, so make a list of “must haves” to ensure that you’re on the right track during your search. For example, if you have three or more children, a vehicle with three row seating may be a must.
• Your wants. This is not the same as your needs, but instead things you’re hoping to find in a new car. Maybe you want a sunroof, power seats, or a turbocharged engine. It’s okay to make a list of wants, just be sure you don’t confuse these with your needs.
Along with the above, it’s important to compare as many cars as possible before making a buying decision. It can take some time to do so, but the comparison process goes a long way in ensuring that you get the most bang for your buck.
It’s a lot of fun to purchase a new car, but there will always be questions about how much you should spend. Do whatever it takes to set a budget and stick with it, as you don’t want your purchase to have a negative impact on your finances in the months and years to come.