When thinking about buying a new car, it can be difficult to consider how much of a budget to set aside if you don’t have all of the details. Use these pointers when you’re doing the math with your specific income.
Think of Your Income Before You Shop
Looking around at different cars is fun, but you’ll be wasting your time looking at cars that you might not even be able to afford. Before you spend so much time looking, you should narrow down your search to a specific price range. This will also prevent you from finding that perfect car only to be let down by the price.
A good rule of thumb is to set aside 15% of your monthly income. For example, if you make $2,400 a month you’ll want to limit your car budget to $360 a month.
Choose Your Car Wisely
Even if you found a car that fits in the budget you set aside, there are other costly factors to consider. Just like how you would pay for utilities on top of your mortgage on a house, every vehicle requires maintenance.
If you want to cut down on maintenance costs, you should look for a car with a simple design and minimal features. Many new models come loaded with safety features, wireless connectivity options, and other electric parts. Unless these features are covered under your warranty, fixing these later on can cost a pretty penny.
Lowering your monthly costs is also as easy as looking at past models. Say you’re looking for a GMC Sierra. Even if you’re looking at the same truck, the difference between a 2019 model and a 2016 model could be a couple thousand dollars. We love showing off our new cars, but you’ll still find a good variety of options shopping with Prieto Automotive.
What Your Sales Person Looks For
The first thing that your sales person will look up is your credit score. The higher it is, the better your rate will be. If you can help it, it’s ideal to have a score of at least 700 before you walk into a dealership. Waiting to build up your score can have long-term benefits. The biggest factor in determining your score is the amount of on-time payments you make on your accounts, so you might want to spend a few months making payments on your house or credit cards first.
The other thing your sales person will ask for is a down payment. It might not be an absolute requirement, but putting down a good amount will lower your monthly payment and might even open up more options that fit your budget. Even if it takes you a couple months to save up a good amount, you’ll thank yourself for being proactive. If you’re looking to get rid of your old car, all Prieto Automotive stores will accept that as your down payment if it offers good value.