Sports car, bye-bye, and minivan, hello! All kidding aside, as you have a family, the things you seek for in a car alter significantly, including safety features, functionality for daily usage, affordability, and the ability to suit your family’s demands for years to come. Here are three actions you can take to confidently make the choice.
Determine the Car Needs for Your Family
Decide what kind of car is best for your family before you leave for the showroom. You will unavoidably fall in love with the car that has all the bells and whistles and a much higher price tag if you shop for a car first.
Initially, make two lists. The most crucial qualities, such as storage capacity, decent gas mileage, and possibly a hybrid or electric powertrain, should be on the first list. The nice-to-have items, such as a panoramic sunroof or a high-end technology package, should be on the second list. Keep these lists nearby when you go online to compare car prices (more on this below).
Here are some considerations for the sort of car. Will it also be used for commuting, or is it only the family car? Who will be the main operator? How long do you plan to drive it? If you were a bit more frugal, would you consider a secondhand car? Automobiles are poor investments, so you want to acquire one that you can keep for a while.
Calculate Your Recommended Budget
The whole cost of the car should be considered while purchasing a vehicle rather than just the monthly payments. No matter how long you pay for a car, a $40,000 automobile is still a $40,000 car. The secret to financing is that an extra $5,000 or $10,000 just adds $100 or $200 to the monthly payment, making it seem more affordable. However, you ultimately pay the full amount.
Consider other ways you might utilize the money you don’t spend on your automobile to increase your savings for a future goal as an excellent method to keep your budget in check.
Consider the following scenario: You decide to upgrade to a nicer model of a car after car shopping and add a few optional packages to the car that raise the purchasing price by $10,000.
Instead, if you put that extra $10,000 for 17 years, earning a 6% return, in an education savings account, you would have about $27,000 set aside for college.
[Performance of investments is not assured. Risk is a part of investing.]
It’s uncommon for people to pay $30,000 to $40,000 in cash, or even more, for a new car. You must save money if you don’t like debt or paying interest. A sizeable down payment and a reasonable monthly payment are the best option for the majority of car buyers.
The ideal recurring payment – The general guideline for automobile payments is to spend less than 10% of your monthly pre-tax income on them. Rules of thumb, however, only go so far. To better understand what payment matches your entire strategy, you should consider your other monthly debt obligations as well as your savings objectives.
How much money should I put down? Although it’s not necessary, you usually want to put down 20%. A bigger down payment can have a number of advantages.
- Reduced monthly installment
- An interest rate reduction
- Over the course of the loan, your interest costs will decrease.
- You reduce the depreciation’s first blow.
The best auto insurance: Avoid selecting the cheapest plan. You must locate the appropriate protection at a reasonable cost. Consider shopping around for insurance with several companies, including the one you use for your current residence, since they can offer you a discount for bundling all of your insurance policies with them.
The Best Smart Car Buying Advice
Find a non-dealer auto loan – Before you go automobile shopping, discuss your loan with your bank or credit union. Even though dealerships will provide financing, you may probably get a better loan with a cheaper interest rate elsewhere.
Check your pricing range. Before visiting the dealership, shop online to get a feel for the cost. Do you still recall writing down your wishes and needs? You might discover that adding a handful of those nice-to-haves dramatically raises the cost. You might pay $55,000 for same $40,000 automobile when fully outfitted.
Test drive, test drive, test drive: Always take a few vehicles for a spin to see which one suits your driving preferences the best. Bring a baby seat to the dealership if you’re a new parent. Make sure it is simple to enter and exit.
A car is an expensive investment for your family as well as yourself. The preceding steps will help you move through the process with confidence and put you in charge of choosing the right car for your family.