After your home, a car is the biggest purchase we make during our lives.
Car purchasing can be a nerve-wracking process for even the most experienced driver.
For a beginner it is fraught with challenges. That’s why it’s best to talk to people you trust – and to read expert guides like this.
How to pay
Firstly, you need to decide how you are going to finance your car. There are various options to choose from however it is important to choose the one that meets your financial needs best.
Cash
It has almost become the old-fashioned way, but it is still the simplest. Simply save an amount, then spend it on a car.
Yes you need to have all that money in your account but you’ll avoid interest charges and should be able to negotiate a better deal from the seller.
Loans
This is probably the most common method of buying a car. You can borrow the money from a bank, credit card or car dealership. You will enjoy owning the car while you repay the loan.
The problem is, the money isn’t free. You pay for the facility to borrow by paying extra interest. For the easily annoyed, there are also a lot of dreary forms to fill out too.
Leasing
Even more forms but leasing systems have become more and more popular. It’s easy to be lured by a photo of a new attractive car with a monthly price alongside. It seems so cheap!
The catch is that instead of owning the car, you rent it for two to three years. You are making monthly payments but at the end the car still belongs to the lease company, not you.
You have to choose to buy the car for a predetermined price – or return it to them.
Manufacturer Financing
Car dealers offer financing deals. You can get the money sorted at the same place as you buy the car.
The drawback is that you pay full price for the car – you won’t be able to haggle discounts. And rates are unlikely to match the best you can find by shopping around.
Credit
There are many ways to get credit deals.
If you own a home, for example, you can use its equity. Or you could simply borrow the money on a credit card. The dangers of these processes can outweigh their benefits though. Ask a professional for advice.
Each method has advantages and disadvantages. Try to consider your financial situation without emotion. As how you pay for your car is not your only financial aspect. Another main financial decision you will have to make at some point will be how you will finance new tires.
There is now the ability to buy tires on finance so you would be able to pay for them over a period of months, or if you were to have a budge for any car repairs you can choose the option of getting high quality but low cost tires like Delinte Tires.
What other financial things should I consider?
If that lot isn’t enough, there are some other important considerations beyond the initial purchase.
- Depending on where you live, you may have to pay tax, registration, or licensing fees.
- Car insurance is a legal requirement. It can vary from easily affordable – to prohibitively expensive.
- Cars require regular maintenance and unexpected repair costs over time. That supercar may seem a bargain until you discover the price of a service.
- Also think about financing upgrades. It’s great to enhance your vehicle with improvements like great new tires or a performance chip.
- The cost of these upgrades will vary between vehicles and manufacturers. It’s worth checking before you buy.
- From the cost of charging an EV to the miles-per-gallon of a standard car, it’s essential to work out how much you’ll be spending every week.
- Cars lose value as soon as you drive them off the lot. Understanding the depreciation rate of the car you’re considering can help you make a better long-term buying decision.
- You may also need to budget for regular parking fees. And city drivers increasingly face extra costs for tolls and road charges.
It sounds worrying but taking all of these factors into account in advance can help you make a wiser decision about which car is best.
Experienced car owners know that it’s better to worry in advance than worry how you’re going to pay for everything afterwards.