How to Budget for a New Car

Whether your current vehicle is on its last legs, or you just feel like it’s time for a change, buying a new car isn’t a process that should be done impulsively.

These are expensive purchases and you need to know that the type of car you get is going to be reliable and suit your needs. If you have been thinking about getting a new car, but aren’t sure how much you can afford to spend or perhaps have an unrealistic expectation of the cost, here are some tips on how you can budget for it and make sure you’re not getting yourself into a difficult financial position.

Look at Your Financial Health

The first place to start when coming up with a budget of any kind is looking at your current financial health. Although this is subject to change, you should base your budget on what you’re currently earning and what your outgoing costs are. This should leave you with an idea of how much you have left after paying all the necessities each month, and what you have to spare on your new car. You might also have some savings that you can use to purchase a new vehicle, but think about how much you want to dip into this pot, or if you have been saving for another purchase, such as a house. If you don’t want to have any setbacks in your savings, you should try to avoid using them for your new car if you can.

Consider the Cost of the Car

Once you have a clear idea of your financial situation, you can then start looking for cars in your price range. While there are options to pay on finance with the majority of car dealerships, you still might find getting a used car is more suitable for your budget. There are plenty of reputable places where you can purchase a used car easily and safely, and often there are some excellent car brands that you can get for more affordable prices; for example, this dealership where you can get a used Audi Liverpool. Make sure you shop around though, to get the best price.

Insurance

Another element that you need to account for is the cost of your insurance. Most providers give you the option to pay monthly or annually, whichever will be more suitable for you. Ask your insurance provider if they can give you a quote for how much your insurance costs will change based on the vehicle you’re going to purchase and your previous claims or lack of thereof; as well as any additional cover you are interested in adding to your policy. You might want to look for quotes from other providers as well, so you can compare prices and get the best deal.

Factor in Taxes, Fuel and Maintenance

Finally, remember to factor in how much it will cost you to run the car, including taxes and MOT. If you will struggle to keep up with these costs long term, then you might want to hold off buying a car until your circumstances change, or choose a vehicle that won’t cost as much to run.

If you’re interested in purchasing a new car, use these tips to help you come up with a realistic budget that will keep you in a comfortable financial position.