There are many factors to consider before you buy a used car, but one of the most important can be how you plan to work the payments into your existing budget. Not only will you have to consider what you will be able to afford, you may also have to think about additional taxes, fees and operational costs. If you're ready to browse used cars but unsure about the financial side of buying a vehicle, we're on hand to guide you through the process.
Review Your Credit Score
Before you visit us at our car lot, it's important to review your credit score first. Not only will this give you some idea of the kind of financing you might be able to secure, it can help you avoid any surprises during the purchasing process. If your score is not what you expected, then obtain a copy of your credit report so you can review and verify the information. The more you know about your credit score, the more confidently you can approach the car-buying process.
Improve Your Budgeting System
While you might have some idea about what kind of car payment you can afford, improving your current budgeting system might help you fit that payment into your current budget more efficiently. Gather all your bills and review what you pay monthly. Then, to gauge what kind of car payment you can afford, calculate ten to twenty percent of your monthly net income. Of course, if you have a down payment to offer, this percentage can be slightly higher.
Think About the Future
Before you commit to a used car payment, you may want to think about if any future events will affect your income status. Some life events that might change your financial situation include moving, having a child or changing jobs. The better you plan, the less stressful your car payment will be.
Taking the time to review your finances before you browse used cars can make for a more enjoyable buying experience. The more prepared you are, the less stress you are likely to encounter.