{"id":100774,"date":"2018-07-20T11:00:13","date_gmt":"2018-07-20T17:00:13","guid":{"rendered":"https:\/\/www.biggerpockets.com\/renewsblog\/?p=100774"},"modified":"2024-01-27T10:40:15","modified_gmt":"2024-01-27T17:40:15","slug":"buy-a-car-within-budget","status":"publish","type":"post","link":"https:\/\/www.biggerpockets.com\/blog\/buy-a-car-within-budget","title":{"rendered":"4 Steps to Buy the Car You Want Within the Budget You Can Afford"},"content":{"rendered":"

Buying a car is a big investment, and if you\u2019re living on a budget, you can\u2019t afford to make mistakes. That\u2019s why, before you head to the dealership, you need to do your homework\u2014because there\u2019s nothing straightforward about buying a car. Car salesmen are masters of the up-sell, and if you don\u2019t know what you\u2019re doing, you\u2019ll walk out of there with a dozen add-ons you never meant to buy. You need to arrive with the tools in hand to outsmart the dealers.<\/p>\n

These four simple steps will give you a clear sense of what kind of car you\u2019re looking for and how much you can spend, and most importantly, they\u2019re designed to give you the upper hand in negotiations.<\/p>\n

4 Steps to Buy the Car You Want Within the Budget You Can Afford<\/h2>\n

1. Calculate your costs.<\/h3>\n

The most important data point to establish before seeking to buy a car is how much money you can afford to spend. That means accounting for monthly payments, but also setting aside the funds for a down payment. You\u2019ll also want to make sure you have a few months of loan payments set aside in case an emergency strikes because it\u2019s going to take you a while to pay down your loan; today\u2019s average loan is 5.5 years<\/a>, but many run for 6 or 7 years because base prices on new cars are so high.
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\nRelated:<\/strong> 5 Advanced Excel Tips for a Better Home Budget<\/a><\/em><\/p>\n

In addition to budgeting for car payments, you\u2019ll also need to account for the cost of insurance, license and registration, and upkeep. These finer details tend to be where first-time buyers slip up\u2014the expenses pile up quickly, and they tend to be front-loaded in the period immediately around the date of purchase. Other costs like taxes that aren\u2019t included in the ticket price can also throw your initial calculations off, so be sure you know exactly what\u2019s going to show up on your bill before you start looking at vehicles.<\/p>\n

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2. Get your loan.<\/h3>\n

Once you know how much money you can spend on a car, the next step is to get a loan\u2014and just like car salesmen, many loan providers will push you up against the limits of what you can afford. Don\u2019t let them. Stick to the number you\u2019ve calculated because when you\u2019re approved for more, you\u2019ll feel obligated to spend it.<\/p>\n

It\u2019s important to get pre-approved for your loan because it gives you control over the negotiation process<\/a>. If there\u2019s a vehicle just out of your price range, salesmen are more likely to try to meet it with a special offer or discount because they know you aren\u2019t going to spend more just because they put pressure on you.<\/p>\n

Another advantage to getting pre-approved for a car loan is that it gives you the time to shop around for loans<\/a> and find the best interest rate. Just because you know how much you can afford doesn\u2019t mean every lender will offer it to you the same way. For example, your bank may give you a better interest rate because you\u2019re a loyal customer, or another lender may be having a special promotion. You have to compare all the options to minimize extra costs.<\/p>\n

3. Research best buying dates.<\/h3>\n

Over the course of the year, there are many major car sales\u2014Memorial Day, 4th of July, even New Year\u2019s day. But when is the best time to buy? This is a surprisingly complex question, but there are plenty of resources that can guide you.<\/p>\n

If you\u2019re thinking across the span of an entire year, many experts say New Year\u2019s day is the best day to buy<\/a>. That\u2019s because no one is trying to meet any quotas; it\u2019s a fresh slate for the dealers and a great opportunity for you. Plus, most dealerships are still trying to clear last year\u2019s models from the lot, so there will be plenty of great sales happening.<\/p>\n

Of course, when your decade-old vehicle breaks down in April or you\u2019re in need of your first car, you probably aren\u2019t in a position to wait around until New Year\u2019s day to snag the best price. Don\u2019t worry, because there are plenty of other great days to buy. Almost any holiday sale will allow you to snag a good deal, and on a week-to-week basis, Mondays generally show the greatest price drop. Like anything else, though, you need to research pricing in your area and check additional resources for the best upcoming sales dates.<\/p>\n

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\nRelated:<\/strong> The Two Best Budget-Building Apps, Compared and Contrasted<\/a><\/em><\/p>\n

4. Focus on function.<\/h3>\n

Finally, as you try to narrow down your options, it\u2019s time to figure out what features you need in your new car, and that means thinking about its function in your day-to-day life. For example, if you\u2019re going to drive for a rideshare to make money<\/a>, there are generally specific rules you have to follow to qualify, like having a car that\u2019s a 2007 model year or newer. Or, if you live in a cold or rugged area, you\u2019ll need a car with four-wheel drive that can handle challenging roads.<\/p>\n

Depending on your budget, you may also have a chance to consider what features you want<\/a> but don\u2019t necessarily need. If you have kids, you might want in-car entertainment options or a particular sound system, but you don\u2019t need one. Maybe you camp and want a trunk that can handle a lot of equipment. As you plan, you can narrow down the list of models to ones that fit your criteria.<\/p>\n

When you don\u2019t know what you can afford and don\u2019t have a plan, it\u2019s easy to be taken advantage of at your local car dealership\u2014but you\u2019re not going to be their next mark. Now, by following these rules, you\u2019re going to be a savvy buyer who gets what you want at the price you want.<\/p>\n

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Have you ever landed a great car deal? Any tips you’d add to this list?<\/em><\/p>\n

Comment below!<\/strong><\/p>\n","protected":false},"excerpt":{"rendered":"

When you don\u2019t know what you can afford and don\u2019t have a plan, it\u2019s easy to be taken advantage of at your local car dealership\u2014but you\u2019re not going to be their next mark. Now, by following these rules, you\u2019re going to be a savvy buyer who gets what you want at the price you want.<\/p>\n","protected":false},"author":59534,"featured_media":95877,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"footnotes":""},"categories":[7396],"tags":[],"class_list":["post-100774","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-budgeting"],"acf":[],"comment_count":0,"_links":{"self":[{"href":"https:\/\/www.biggerpockets.com\/blog\/wp-json\/wp\/v2\/posts\/100774","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.biggerpockets.com\/blog\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.biggerpockets.com\/blog\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.biggerpockets.com\/blog\/wp-json\/wp\/v2\/users\/59534"}],"replies":[{"embeddable":true,"href":"https:\/\/www.biggerpockets.com\/blog\/wp-json\/wp\/v2\/comments?post=100774"}],"version-history":[{"count":0,"href":"https:\/\/www.biggerpockets.com\/blog\/wp-json\/wp\/v2\/posts\/100774\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.biggerpockets.com\/blog\/wp-json\/wp\/v2\/media\/95877"}],"wp:attachment":[{"href":"https:\/\/www.biggerpockets.com\/blog\/wp-json\/wp\/v2\/media?parent=100774"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.biggerpockets.com\/blog\/wp-json\/wp\/v2\/categories?post=100774"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.biggerpockets.com\/blog\/wp-json\/wp\/v2\/tags?post=100774"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}