When your budget is tight and you’re in the market for a cheap car, you might be tempted to buy a used car as opposed to a new one. Buying a used car, however, can backfire in many ways. Higher maintenance and repair costs and a lack of warranty can take a huge chunk out of your wallet, along with other issues. As there are already so many cheap, used cars in the market, a new car offers better value to the consumer with comprehensive warranties and a peace of mind.
If you’re short on money, continue reading to be better prepared to buy a new car.
Figure Out Your Budget
Before embarking on your car deal search, we highly encourage you to figure out your total budget in order to paint a clear picture. If you are planning on financing part of your car payment, then start by picking a monthly cost that you wish to pay – say $300. The general rule is that it should be no more than 20 percent of your monthly income. Could you make room for another $100 per month on your payment? What about $50? Continue this process of slightly raising your monthly payment amount to come up with your maximum possible monthly payment. Multiply this amount by 36, 48 or 60 months to give you an estimate of how much you can afford to finance over the course of three, four or five years respectively.
Remember that when buying a car, your expenses will also include insurance, gas, maintenance and other costs associated with owning a car. A popular choice of a budget car that offers great features is the 2014 Hyundai Accent with an average price of $13,423. Also a great buy for wallet-conscious consumers is the new 2014 Honda Civic, for which you can expect to pay an average of $18,189.
Decide What Kind of Car You Need
When it comes to kinds of cars, you are spoiled for choice. You may want a sporty coupe, but your significant other might be thinking otherwise. What other choices are out there? Come up with the one that would fit their lifestyle best and then make sure that it works with their budget.
One of the most popular kinds of cars is the four-door sedan, which appeals to people who are comfortable with familiar forms. If you prefer to have the storage/cargo area completely separate and out of view from the seating area, a sedan is for you. Furthermore, you can also buy hatchbacks, which replace the trunk of a sedan with a lifting rear door, allowing for carrying more items and cargo when the back seat is empty. The hatchback style is enjoying a rise in popularity due to its versatile nature.
Typically on the sportier side, you can also choose from coupes and convertibles. A coupe is basically a two-door sedan, appealing to drivers thanks to its sporty look. Note that coupes are usually more expensive to insure compared to regular sedans. Convertibles are not the most practical of vehicles, but driving with the top down on a warm summer day might just make the purchase worth every cent to you.
If you require large amounts of cargo space, you have several choices to pick from. You can go with a wagon, minivan or SUV, all of which are good choices for storage and utility. If you regularly drive in snow or muddy conditions and require four-wheel-drive, SUVs are highly recommended; they are also sportier than wagons or minivans.
New on the market are the “crossover” vehicles that basically combine the features of several types of cars into one. For example, a sedan mixed in with features from an SUV is a crossover. Manufacturers are constantly experimenting with this kind of car, resulting in a variety of choices and shapes.
Research Best Rebates and Incentives
When buying a car, always remember to look into car rebates and incentives offered beforehand. Car rebates and incentives stimulate sales for car manufacturers by passing some savings to buyers, in effect lowering your drive-away price and providing you with additional ammo in your negotiations. If you know what incentives are being provided to the dealer behind the scenes, you can use that as an angle to get a much better deal for your new car.
If you’re not sure how to use rebates and incentives when negotiating the best car deals, consider these pointers.
What to Do in Case You’re Really Poor
We’ve all been in that tough spot where money is tight and the only vehicle we can afford is a used one. If this describes your current situation, go for a used car – but only if buying a new one is completely out of the question. The obvious advantage of buying a used car is paying less money, as a used vehicle has already taken the biggest depreciation in value when it was driven away from the lot as a new vehicle. Used cars are also generally cheaper to insure. However, they also don’t come with a warranty, resulting in potentially large costs when it comes to maintenance and other issues.
Being short on money doesn’t necessarily have to mean that you are stuck taking a bus or walking. With some research and a strict budget, you too can find a suitable car deal and drive off the lot as a proud new car owner.
