Buying A Car? 3 Things To Consider
Buying a car is a big financial commitment for many people. For many Americans, buying a car, whether it's brand new or used, can also be a fairly long term expense. The average length of an auto loan is now 69.5 months. Given that purchasing a car is a major decision for many, it's important to think your purchase through carefully. If you are buying a car, here are three things that you should keep in mind.
When buying a car, the first thing that you should consider is your budget. You want to pick a vehicle that suits both your needs and your budget. A good rule of thumb is that the total monthly cost of your vehicle, including the payment on the loan, the interest, and your insurance, should not be more than 10 percent of your monthly take-home pay. When looking at vehicles, it's important to choose one that will work with your monthly budget and that will also be affordable to insure. You will also want to consider how much regular maintenance, which includes things like oil changes, will cost.
Once you determine what you can afford and what type of car you are looking for, it's time to look into financing. There are a variety of lenders that offer auto loans. Many auto dealers also provide financing. Shopping around is always beneficial when it comes to finding the best interest rate on your auto loan. Your credit score will also play a big role when getting financing for a car. The better your score, the better your interest rate will likely be. If your credit score is not as high as you would like it to be, having a down payment of 10 to 20 percent or using a cosigner may help you get a better deal on your auto loan.
Another thing to consider when buying a car is the car's history. This is especially important if you are purchasing a used car. If you are purchasing from an auto dealer, this information is often readily available. You will want to know if the car was involved in any accidents, if it has had any extensive repairs in the past, and its overall condition. Before buying you may even want to consider a car inspection done by a mechanic. This costs between $150 and $250 for most vehicles.
When it comes to buying a car for sale, there are a few things that you should consider. The overall cost and whether or not the car fits into your budget is important to keep in mind. Shopping around and have a good credit score can help you secure affordable financing for your car. It's also important to consider the car's history before buying, especially if it is a used vehicle.