Buying car insurance is typically seen as one of the major ongoing expenses of owning a car, but the reality is a little more multi-faceted than that. Too often, buyers shop for the car they can afford at the moment, not the car they can continue to pay for and pay off, and unless you want to give your shiny new car back to the dealership, this isn’t the way to do things. Shop for the car you can afford in the long term – simply put, you can’t afford not to.
Needs vs Wants
One of the biggest obstacles car buyers must overcome is the “need vs want” dilemma. If you have X amount of money in the bank, you might be tempted to buy the most expensive car you can initially afford, and in doing so, you mentally assemble a list of features you “need”. Choosing the bare-bones economy car over the decked-out luxury ride can be extremely difficult if you can feasibly afford to drive away in the more expensive option, but you don’t need the luxury provided by the more expensive car. Think practically, and don’t get swept away by possibilities – ground yourself in reality and spend as little as possible on what you actually need.
Next, it’s time to think about how much your new car is actually going to cost. Sticker prices are deliberately enticing, and usually don’t even reflect the final price you’ll be paying. Your payment plan will also likely carry a little bit of interest, and you’ll also be paying for maintenance, gas, repairs, and auto insurance. Before you even think about the initial cost of the vehicle, you need to be certain that you can afford it beyond the most basic payments.
It’s also important to keep this question in mind: “Am I buying this car to get from place to place, or am I buying it because I want a new car?” Having a slick new ride is a great way to garner attention, but after a few months, your shiny new car won’t be as impressive, and the payments will be as “impressive” as ever (not to mention the fact that more expensive vehicles typically require more expensive gas, parts, oil, and insurance).
Taking Out a Loan?
Long-term financing for your vehicle might sound like a great way to lower your monthly costs, but don’t use this as an excuse to buy a more expensive car. The longer the term of your loan, the higher your interest rate, and the more you’ll have to pay before all’s said and done.
Only spend as much as you need to spend – even if you’re approved for a surprisingly large loan. The value of your car plummets as soon as you drive it off the lot, and if you spend too much on a car that isn’t right for you, you might find yourself in debt. Start with a solid Dallas auto insurance policy and a reliable dealership, and don’t let the excitement get the best of you.
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