How Much Car Can Your Budget Handle?

18 Jan


We’ve all dreamed of tooling around town in a luxury ride, like a Ferrari, Aston Martin or Jaguar. But in reality, they’re often neither practical for our lifestyles, nor are they affordable – that is, unless you want to drive a spectacular car and live in a shared one bedroom apartment with two roommates. Which,let’s face it, no one wants to do.

2013 toyota matrix

 

Instead of settling for nothing less than your dream, consider this: If you buy a car that you can actually afford, you can probably have a better life – and not just a better car. By spending your money wisely,on a car – and a house – that suit your budget, there’s a better chance that you can travel, a better chance that you can go to concerts or museum exhibits, and a better chance that you can live, well,better.

But just how much car can you reasonably afford? In general, experts suggest that your car payment should not exceed more than 20 percent of your take-home pay. That said, if you’re more comfortable with your car payment taking 15 percent or 18 percent of your pay, go with that. Your finances are your finances – and you shouldn’t  feel pressured into manipulating them in a way that isn’t  comfortable for you.

Of course, the out-the-door total that you’ll pay for a new car, truck, or SUV depends on a number of factors – the trade-in value of your current vehicle, your down payment, credit score (which helps financiers decide which interest rate you’ll receive), and your negotiation skills.

Now, if you’re like most people, you hate negotiating – can’t stand it. Think you’re terrible at it. And sure– maybe you are. But it can save you somewhere between a few hundred to a few thousand dollars, so get comfortable with it, be polite about it – and don’t take it personally. In addition, prepare for it. Know the value of your trade-in and the real value of the car you want – and don’t forget to:

  • Eat before you go to the dealership. Negotiations, test drives and paperwork take hours, so go in with a full belly, a snack in your pocket and a bottle of water.
  • Ask for what you want (just don’t be insulting about it). The worst they can do is say no, right?
  • Walk out if you can’t reach a deal that’s comfortable for you.
  • Leave any hint of desperation at the door. You need/want a new car, fine – but don’t let the salesperson know that you have to have a vehicle today – or that you have to have a certain make or model.
  • Be confident. Don’t let the salesperson intimidate you. If you feel as though you’re being bullied,and are uncomfortable because of it – walk.

Finally, even though you probably won’t be opting for your dream car (remember the Aston Martin mentioned earlier), do get a car that you like. That way, you won’t be filled with loathing every time you slip behind the wheel.
BIO: Rose Fox – Rose is a guest author who just loves to write. She occupies her time wordsmithing about everything from user interfaces to used cars, from farming to pharmaceuticals.

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Date posted: January 18, 2013