We are all attracted to certain cars; it seems that some car models call out to us – whether you’ve always been tempted to purchase a cool coupe or sports car or have had your eye on that impressive luxury sedan for years. But while we can all dream about the best car models, it’s always better to be realistic. We’re talking about choosing a car that’s the best fit for your budget, of course, so you don’t have to worry about making sure you meet your monthly car payments down the line. Ideally, your monthly payments shouldn’t be more than 15% of your monthly take-home income. But there’s an even bigger question: how can you effectively select a vehicle you could afford? Here’s what you need to know.
- Compute your overall budget
One of the best ways to narrow down your options would be to set a limit for the car you can realistically afford. It pays to follow the 20-4-10 ratio, which is as follows: allot a 20% down payment for your car, and choose a payment term that’s not more than four years. Then, make sure your total payments for your car, including insurance, principal, and interest, are not more than 10% of your yearly income.
For example, if you earn $50k a year (without taxes), your budget for your car would be $5k a year. This amounts to around $440 each month, and it already includes your car insurance. When you factor in your down payment of 20% plus interest, this means you could realistically afford a car with a value of $14k or so.
- Figure out the style you prefer
After you’ve computed your budget, it’s time to figure out the style you prefer. Styles include trucks, sedans, SUVs, crossovers, and so on. If you opt for a sedan, it’s fun and safe to drive, and it comes with manual transmission options. You can also choose from an array of used sedans on the market and even go for something pricier and more luxurious, like an Audi. Buying a second-hand model also gives you lower insurance, as attested to by Young Automotive, premium used car Utah dealers. You can also opt for a hatchback, which has cargo space like a crossover, or an actual crossover, which is roomier and has a high position for driving combined with better fuel efficiency than SUVs. Finally, if you choose an SUV, it has excellent space and can be driven off-road.
If you’re unsure which style to go for, you can always go for several. Try not to rush the process, and the more vehicles you put on your list, the better your chances of finding the best car. When you already have a good idea of three preferred styles, you can browse the net and look for models that fit your chosen categories.
- Don’t forget reliability
Reliability is a crucial factor that can save you tons of money – because if the car you choose isn’t reliable, you could end up spending thousands of dollars to have it repaired. You can find out about a car’s reliability by checking sites such as Edmunds, which will rank the top vehicles for each class or category. With this, you can check which cars are most reliable and narrow down your choices even further.