How to organize your finances when purchasing a new car
The problem is, you aren't sure if your finances will be able to handle the additional burden.
Well, there are lots of easy ways to organize your earnings and subsequent spending, to ensure that your monthly budget won't buckle under the strain of your new investment.
Create a Monthly Earnings and Deductions Sheet
How much do you currently earn per month? How much do you spend on rent or mortgage expenses, groceries, insurance, current car installment loan payment (if any), and other miscellaneous purchases?
Write everything down on paper, and refer to the list throughout the month to ensure you haven't forgotten anything. If you earn a significant amount more than is needed to cover your monthly budget, then you should easily be able to fit in the cost of a new car payment.
Also, keep in mind that you'll require a budget for upkeep and general maintenance.
Calculate Your Payment
The websites for most car dealerships will not only list the prices of their available vehicles, but provide detailed information about each item on the inventory.
They'll also calculate an estimated monthly payment, based on your credit score. Some companies realize that this should help you figure out what you'll be able to afford.
And don't forget to call your insurance company for a quote on the additional coverage. If you're trading in a vehicle, you should have a rough idea of its value before heading to the dealership.
Save for the Down Payment
Start setting aside the amount you can afford for your new car payment every month, so you'll have more cash to put down at signing. The more you can afford to put down now, the less you'll pay in the long run.
Registration and Inspection Fees
It's always exciting to drive off the lot in a shiny new vehicle, but don't forget that it still needs to be registered. New registrations can edge into the thousands, depending on the car.
Be sure you take this into consideration when you're saving for the down payment. Also, make sure the inspection sticker is current when you visit the dealership.
Whenever you're making a significant purchase such as a new car, information can be as valuable as money. If you've done your research and know your budget, you're ready to begin shopping.