Before You Buy That Car: Can You Afford It?

buy the car
buy the car

Are you getting ready to buy a new car? As urgently as you may be looking to purchase a reliable means of transportation, there are some things you need to consider first. When making an investment of this size, it is imperative that you have your finances in order. All too often consumers buy a vehicle that ends up being more than they can actually afford. You see, there’s more to owning a car than just paying the car note each month. So, before you make the decision to buy, it’s best you make sure you’ve got it all covered.

Associated Costs of Buying a Car

Before you can even leave the lot with your new ride, you’ll have to cough up a lot of cash. Here are some of the costs you could be required to pay:

  • Down payment – unless you have great credit you likely won’t qualify for promotional offers like zero cash down. You’ll need to have a down payment of at least ten percent.
  • Sales tax – depending on which state you live in, you’ll be required to pay sales tax on the vehicle. The national tax average is about 8%.
  • Motor vehicle fees – To safely and legally operate a motor vehicle, you’re required to have license plates and valid registration. The costs will vary by state.
  • Insurance – Another legality of driving a vehicle is valid insurance. You’ll need to have either liability or full coverage on your vehicle depending on what the dealership requires.
  • Miscellaneous – every dealership is different. Other fees that you could be responsible for might include dealership fees and trade-in fees if you’ve used your old car to afford your new one.

Costs of Owning a Car

Once you’ve paid for the vehicle, the costs continue to add up. Below is a look at some of the costs you’ll be responsible for as long as you own the car.

  • Car payment – unless you paid cash, you’ll be required to pay a monthly car note.
  • Insurance – insurance must be maintained on the car at all times.
  • Gas – the cost of gas will vary based on where you live, but this will be required on a frequent basis.
  • Motor vehicle fees – every year you’ll need to re-register your vehicle and you’ll also be required to renew your license every few years.
  • Maintenance – for every few thousand miles you drive there are maintenance jobs that need to be done. This can include oil changes, filter changes, fluid changes, tire rotations, engine flush, transmission flush, and tune-ups.
  • Repairs – as cars often do, eventually it will break down. You’ll need to pay for repairs that can range from a few bucks to several thousand dollars.

Ways to Pay

Wow! There’s a lot of financial responsibilities with owning a car. Now that you have a clearer picture of what you’ll need to have, can you afford it? If you really need a car but are short on cash, here are some ideas to help you handle the costs:

Short-term loan – Need the cash to cover sales tax and motor vehicle fees? Car due for some maintenance? Or maybe it breaks down and you don’t have money upfront? A short-term loan can resolve your problems. They have installment loans for bad credit you can apply for. Applications can be done online and if approved, you can have as much as $1250 in your account within a business day.

Tighten your budget – If you really need a car then you may need to sacrifice in other areas of your life. Take a look at your budget and see where you can cut costs. Perhaps you make your coffee at home and take your lunch, cut your cable, reduce your energy consumption, or find a cheaper mobile plan to find additional funds.

Sell some things – If you just need help paying that large sum of cash you need at the dealership, you can accumulate a lot of cash really quickly by selling some of your things. Jewelry or clothes you no longer wear, electronics that are damaged or out of date, and even books and DVDs can turn into a decent amount.

Find ways to save – There are always ways to get discounts on things you need for your car. Shop around for affordable insurance, look for coupons on car maintenance, buying aftermarket parts for repairs, and shortening your commutes to save on gas are all ideal.

Buying a car really is a huge investment that comes with a lot of responsibility. Before you sign a contract making you the responsible party, take a moment to make sure you can afford it. If you’re a bit short on cash, or really need a car and can’t afford to wait, there are some ways you can boost your income or generate a lump sum of cash quickly.