Arguably the biggest purchase one can make in his/her lifetime is the purchase of a vehicle. Second would be the purchase of a home. It is no wonder why when purchasing a car one may feel lost and get easily overwhelmed. Purchasing a vehicle for some may feel like going into an exam with no preparation. But with the right guidance and knowledge of things to consider prior to purchasing a vehicle. Purchasing a vehicle can feel less daunting and possibly even enjoyable.
One thing that is overlooked when purchasing a car is how much to spend. Personally, I’ve seen a handful of people purchase vehicles they cant maintain let alone afford. I believe purchasing a vehicle you can’t maintain is far worst than purchasing a vehicle you can afford. Allow me to explain, consumers who walk into a dealership and purchase a vehicle because they seem to be able to afford the car note have only won half of the battle.
One thing to keep in mind when purchasing a vehicle is that a car is a luxury not a necessity. This is seen in areas where public transportation run around the clock. For example, New York city. This city is filled with millions of residents who rely on public transportation to commute back and from work and to travel just about anywhere in the city contrary to this if you live in New York State having a vehicle becomes a necessity. If you don’t live in an area where a car is a necessity congratulations, you can save up more money prior to purchasing a vehicle. For those who need to purchase a vehicle as soon as possible because getting around without one feels like a marathon you have come to the right place.
A good rule of thumb to stick with when purchasing a car is to stay within your take home pay. I’ve seen people who make 40k, 50, 60k, 80k and even six figures who overspend on vehicles all the time without knowing they have until it’s too late. If you make 40k before uncle sam jump in you make roughly $3,333 a month. This figure isn’t a bad number, but if you live in a place like New York like I do technically you only take home about $1900. This number is what you should really factor in when purchasing a vehicle. I suggest not spending more than 15% of your take home pay on a vehicle. Using the $1900 a month, which equates to $22,800 take home a year. Do NOT spend more than $3,420 – $4,420 including closing cost and hidden fees associated with purchasing a vehicle.
Furthermore, pick a vehicle that is good on gas and maintenance is ranked low. Far too many times people purchase vehicles they can hardly afford to gas up on a weekly basis. Sometimes being forced to take public transportation or just not drive for the day. If possible opt to get a 4 cylinder vehicle over a 6 cylinder. This will save you plenty of money at the pump. In addition, review common problems with that make and model of vehicle. Last but not least, look to purchase a sedan over an SUV as they are much better at the gas pump as well.