How Much Should I Spend on Buying a Car?
How much is too much?
Get educated on the finer points of knowing what to spend on a car
Buying a new car raises a number of questions, many of which have ‘no correct’ answer. However, the two questions you should ask are: what can you afford and how much should you pay? This will depend on your financial situation, intended use of the car, and whether you want a new or used car. However, there are also several other factors at play. Here are a few tips to help:
Work out your budget
It’s imperative to work out your budget before applying for car finance. Most income brackets lean towards spending on average $30,000.00 on a car. If you’re a high-income earner then that figure may escalate to $50,000, but then again it depends entirely on what you want in a vehicle. How much fuel can you afford per month? Licensing and insurance costs? Car services and warranties? How long are you planning to keep the car and is depreciation and resale value something you need to consider?Each of these impact on your budget.
What are you looking for in your next car? Do you need something bigger to accommodate the growing kids, big dog and surf gear? Are you looking for something to handle that seriously tough terrain for your holiday adventures into the outback, and can therefore justify spending more on the car because you won’t be spending on overseas holidays? Maybe you’re simply looking for something to get you from A to B. Each of these factors are centred your current or future lifestyle, financial situation, and will all drive your decision-making.
Buy private or dealer
A private purchase means you pay less upfront but there are no warranties in place and could find yourself in a bind should something be wrong with your new vehicle. When purchasing from a dealer, you may be able to purchase a warranty to extend the cover over the mechanical items on your next car. Please ask us as terms and conditions apply. It is important to be aware that you may also have rights under statutory consumer warranties. We may be able to help with an extended warranty.
New or used
New or used, fancy or practical, you don’t have to stretch yourself thin to own a car. There’s a car out there suited to your exact specifications and budget. Just do the research. Do you want the latest phone connectivity, self-parking assistance and heated seats? New might be the best option for you. But if the latest and greatest technology isn’t what’s driving your decision and you’re happy with a car that isn’t brand new, you may be able to find a better car for the same price in the used car market.
Don’t forget with a new car purchase, the moment extras come into play, you could potentially add on nearly $7,000 with all the options. Always ask what is included in the vehicle price, and what the optional extras are.