If you want to buy a new car it is good for as it will be an asset for you. But make sure you do not make it a reason for your debt. Lot of people around the globe commit the same mistake, do not make a huge down payments when buying a new car. If you do so you would be short on money on your other monthly expenses and this would lead to the use of your credit card driving you deep and deep in the holes of debt. Follow the following steps and work out your personal financial status to buy a new car.
- Not Knowing How Much Car You Can Really Afford
When you have decided to buy a new car and you cannot understand how much payment you must make for your car then seek the help of a financial expert. According to most of them you must make a payment of 15% percent of your monthly salary from which the tax is deducted. This will give you clear pictures of what types of car you can afford. Even if the car dealer is forcing you to make a payment higher than this, do not listen to him and stick to what you have decided. This is because you don’t only have to worry about the cost of the car but also about the insurance of your car, maintenance cost, etc.
- Buying New Versus Used Cars
If you are buying a new car with the idea of selling it within two years then the resale value of your car may be less than you expect. Most of the cars value depreciates drastically within first two years. But if you have the plans of keeping your car for more than 2 years then there is no problem. If money is the issue then you must go for a second hand car its resale value wouldn’t be affected a lot. Make sure you get yourself the best.
- Choosing a Long-term Loan Versus a Short-term Loan
When choosing in terms of short term and long term loans, you must be clear with your budget, you must be able to understand how much you can afford to pay as premium. Then the best choice would be to take up 36 months or 48 months loan plan. But if you want to go for long term loan such as 60 or 72 month loan plan, then you can choose to have a better car than what you are looking for. The consequences that you would have to face are you would end up paying more on the premiums and your car would have crossed the depreciation period.