You need a family vehicle to get everyone to work, school, and appointments. Any family that has lived without a vehicle knows how hard it is to manage the tasks of daily living without one. It can be strenuous, time-consuming, and may cost a small fortune in taxi and transportation services to live without owning a vehicle.
Aside from the necessary needs your vehicle may fulfill, you may need it to take road trips, see friends and relatives, and get out for fun now and again. You want to spend enough to get something reliable and safe with a lot of life left, but you also want to save money so you can afford those trips and fun.
1. Determine Your Car Payment
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How much of a car budget you can afford is going to be based on a combination of a few things:
- What size of a car payment you can afford every month?
- How much money you can put towards a down payment?
- How much money can you afford to invest in vehicle maintenance and insuring the vehicle?
- How much money can you budget toward fueling the vehicle?
Larger down payments reduce your monthly payments, but it might also delay how soon you get a new vehicle as you may need more time to save up. It is a combination of all these factors that really paint a picture of how much it will cost your family to own a vehicle. It’s usually best to stay under your monthly maximum so you have breathing room.
Make sure you avoid financial setbacks by purchasing a vehicle you can actually afford. A vehicle becomes a detriment to your household finances if once purchased, you can’t afford to actually use it or maintain it.
2. Spend Time Online
Debt.com recommends both doing research online and shopping around online. This has many advantages, including:
- Figuring out what you really need
- Identifying what you want
- Getting to know the modern market options
- Familiarizing yourself with specific brands and models
You don’t have to actually do your shopping online, but looking around a lot first will mean you walk into a dealership lot highly educated about your options and needs. Keep in mind, however, that online dealerships tend to have less overhead costs associated with running their business and can usually offer greater discounts and perks than the traditional auto dealerships you have to walk into.
3. Get Your Financing First
This is different from determining your available budget as we discussed earlier because it actually involves getting formal financing from a lender, bank, or financial institution. There are three reasons for doing this:
- You won’t spend more than you can actually afford or borrow.
- You don’t have to rely on dealer financing to afford the vehicle.
- You can shop around for the best financing just like you shop around for the best vehicle for your family.
There are several things to consider when deciding whether or not to take out a loan to purchase your vehicle. There are options such as payday loans, quick cash loans, and personal installment loans. Each of these options has its pros and cons, and it’s important to analyze all of these options carefully before making a decision. Remember to shop around for the best option to minimize the amount of interest you end up paying in the long run.
4. Get Something New to You
“New to you” is of course a polite way of saying “used”. You’ve likely heard the common refrain of vehicles losing 20 percent of their value as soon as they’re driven off of the lot. They don’t actually always drop that much at that moment, but they do depreciate the most in their first year.
Look for a gently used vehicle that is less than three years old without many miles, and you can find a tremendous value. A car that has just a little age can be a known quantity that’s not a dud or a lemon and yet still provide many years of service at affordable prices.
While you check out various dealerships, visit at least one site that sells used rental cars. Rental car companies routinely rotate their fleets after just a year or two so their customers always drive newer cars. They sell used models at steep discounts. They might have some mileage on them, but they’re also maintained really well.
5. Watch Your Shipping Costs
You’ve probably grown accustomed to watching out for shipping fees when you order things online. Whether it’s free delivery minimums on groceries or getting free shipping for choosing the slowest mailing methods on packages, you always make sure the final total doesn’t have hidden expenses when you check out.
If you decide to buy a car online that’s in another city, state, or region, then you will have to arrange for car transport to get the vehicle to your location.
Exact prices will always vary. However, you can use the following figures to estimate your shipping budget when saving money:
- Short distances of 1-500 miles run approximately $2.00 a mile.
- Medium distances of 500-1500 miles run approximately $1.00 per mile.
- Long distances of 1500 or more miles average to less than $0.60 per mile.
As you review the information above, you’ll find there are various ways of saving money when buying your next family vehicle. Saving money on your next family vehicle is as easy as:
- Determining your budget
- Doing online research
- Shopping around for financing first
- Buying used
- Estimating shipping costs
If you want to keep saving money on your car after you finance and buy it, then consider refinancing every six months. This is a bit of an unknown trick that can lower your monthly payments every time that you do it.
Saving money is a crucial part of supporting your family. You want to make sure that you get the most out of every dollar you spend. Whether you’re saving up to move your family into a better home or if you’re simply saving up for potentially rainy days ahead, it’s important that you don’t sink your family finances into a hole you can’t recover from. By following the guidelines above, you can rest assured that you’ve done everything in your power to make sure your next vehicle purchase keeps your family living well and thriving.