How Much Car Can You Afford?

Many online resources and financial advisors recommend only spending a fraction of your monthly income on a car purchase. This advice is purposeful advice due to the fact that whatever car you purchase will have unforeseen issues, at times, and may result in a high repair bill, if you cannot fix the problem yourself. You will always want to have money reserved for times like this. Some issues as such are what raise the concern as to how much of a car you can afford. The worst thing you can do is purchase a car to later find out that you cannot afford to maintain or keep it.

Car Insurance

There are plenty of insurance companies that offer cheap auto insurance, but with a few of these companies you get what you pay for. You will want to do your due diligence and research the companies that you are planning on purchasing insurance from so that you do not get stuck with a bad company. Run multiple quotes, across numerous companies, with a variety of coverages, to determine what you can afford. You should also determine your needs so that you can eliminate the companies and coverages that do not meet your needs, or exceed them at a more expensive cost.

Research

If you have chosen the proper insurance company and coverage, you will have to pay attention to the cost of an accident with your vehicle, but your insurance should be able to take care of those costs; normal repair costs will then need to be your primary concern. You should research what parts typically fail on the cars that you are considering. Once you find out these parts and their prices, find mechanics that are able to work on the car and how much those mechanics would charge to do repairs on the car. If the car is new, research previous models and any changes that the manufacturer may have made to improve the previous models; these improvements may have fixed a few common problems.

After you have done individual research, look on forums and discussion boards to see what issues current owners of the car have had with their own vehicles, and what they have been able to do to remedy those issues. Forum members often have cheaper and easier methods of repairing vehicles, and a few sometimes develop parts for the car that are stronger and cheaper than those of the manufacturer.

Maintenance

As you conduct your research you will want to read information about how much it typically costs people to keep their vehicles running. These are the costs that you know will be coming, as the manufacturer will recommend servicing in the owner's manual. A simple task, like an oil change, can have widely varied prices across different vehicles. Therefore, you will want to get a better understanding of how much servicing costs are, for the things that the vehicle's manufacturer recommends you change. Also, in order to save some money, get a better understanding of when parts need to be serviced. If the parts are serviced around the same time, then you can save money by having them all changed at once.

Conclusion

It is very important that you do not purchase a car without being sure that you can afford it. You do not want to spend money on a nice car that continuously puts a hole in your wallet to keep running. You should consider more than just the purchase price of the car. You will want to look into insurance costs for the vehicle, your financial standing, and unexpected costs that you may have to incur.

If you would like more concrete estimates of which car you can afford, consider using an online car affordability calculator. These calculators factor in variables such as whether or not you are financing the vehicle, your pre-tax annual income, and the value of your trade-in.