How to Set Your Budget for a Vehicle Purchase

As you head out to look at the new and used cars Indianapolis dealerships have for sale, one of the first things you will want to do is set the budget for your purchase. This can be somewhat of a difficult task, especially if this will be your first car purchase – or at least your first purchase in a long time. There are a number of variables to consider, and you want to make sure you get the final number just right so you are left with a vehicle that you can comfortably afford to own.

It’s All About the Monthly Number

In the end, what you can afford in a car purchase really comes down to the monthly payment amount that you will be left with after you purchase a new vehicle. Assuming you are going to be financing most of the cost of the vehicle (plus a down payment), you need to calculate the amount that you are comfortable with paying each month, and then figure out what that means in terms of the size of your loan. Of course, you will need to know the interest rate to do these calculations, so contact your bank or the dealership and ask about the rates that they have to offer someone with your credit standing.

Do the Homework First

You don’t want to get too far into your shopping process – and fall in love with a certain car – only to realize you can’t afford it after all. Have your budget specifically outlined before you ever go shopping, and stick to it no matter what you find. By taking this approach, you can feel good that you aren’t going to get in over your head, and the final purchase will be one that you can handle. 

 

Consider the Bigger Picture in Terms of Cost of Owning A Car

The cost of a vehicle goes far beyond the initial purchase price that you pay at the dealership. While the upfront cost obviously is a huge factor in deciding if you can buy a particular model, you should do some additional math to figure out how much it will cost you to own this car over the long run. There are ongoing costs associated with owning a vehicle, and those can change dramatically based on the make and model that you select.

Insurance and More

The first thing to consider is insurance. You have to have insurance to be driving legally on public roads, so figure out how much your insurance premiums will be based on particular models that you are considering. For example, a sports car with a powerful engine is likely to have higher premiums than a family sedan, so find out what kind of rate you can get before making the purchase. Gas mileage is another big element that goes into cost of ownership, as a vehicle that is highly fuel-efficient won’t require you to spend as much at the pump each week. Also, things like maintenance and service costs are important factors to take under consideration.

Find the Right Car for You

As you browse the various cars for sale in Indiana, make sure you are thinking not only about the upfront costs, but also the long term costs of ownership. Getting the whole picture clear before you settle on your next vehicle is the best way to be confident in your purchase decision. 

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How to Set Your Budget for a Vehicle Purchase