If you want to achieve financial bliss, it is crucial to not always ask yourself what you want, but what you can afford. This philosophy is vital when searching for your next vehicle. It is easy to get swept up in all the glitz and glam of that car you’re dreaming about because of all the fancy bells and whistles, but ultimately you could lead yourself down the path to a financial grave. When prioritizing affordability over desire however, you are setting yourself up for success, confidence, and peace of mind that you are not headed towards financial turmoil. How to achieve such harmony? A thought-out plan with a little discipline will serve you much more than you would think.
A general practice that financial advisors and car-buying experts agree on is your car payment not exceeding 15% to 20% of your monthly net income. To clarify, your net income, also known as take home pay, is the money you take home after state, federal, and local income taxes have been deducted from your paycheck. Why only 15% to 20% dedicated to car payment? The thought process of maintaining the 15% to 20% guideline is to allow you to remain a balanced lifestyle of security where you can pay off other bills, mortgage or rent, groceries, family expenses, vehicle maintenance, etc. comfortably while also accounting for the unexpected financial mishap.
You should also consider fuel efficiency of vehicles you are shopping for if you’re not ready to switch over to an electric vehicle. A great resource is https://fueleconomy.gov, where you can find miles per gallon insights for cars on the market along with estimated fuel costs for a vehicle. To calculate the cost of gas, multiply the cost per mile by the number of miles you typically drive a month. Knowledge of this cost can help you dictate the vehicle that is best suited for you.
Another expense associated with owning a vehicle is insurance, where costs typically vary dependent on location, driving record, age, and the vehicle you drive. An insurance agent should be able to a quote for various models that you are debating between. It is important to remember – the more expensive the vehicle, the more expensive the insurance typically is.
While making accounting for the expenses in your life may seem overwhelming, equipping yourself with this knowledge can alleviate mountains of stress and anxiety when it comes to buying a car.
At Fab Cars, it is out mission to help you avoid these financial disturbances through providing you the necessary tools, guidance, and resources that enable you to approach this process head on with a clear plan.
If you land on a vehicle price estimate that your comfortable shopping for it’s time to identify the makes and models within your price range. Check out our inventory on https://fabcars.com and utilize our price filter to keep yourself on the right track of your financial goals. You can also chat with us on our website or give us a call to help you find the right car for your budget.