Home Finance & Banking BUYING A USED CAR- PART 1: BUDGETING

BUYING A USED CAR- PART 1: BUDGETING

So, is it time for buying a used car? It may not be the time you would have chosen, but you have
to. Or, maybe you’re ready for something different. Or, maybe your teen is old enough for
his/her own vehicle. In any case, how should you approach the car buying process? Obviously,
there are tons of sites that will lead you through that process, but they all have several steps in
common. Let’s look at those steps so you’ll be well prepared before you set off on your car
shopping adventure. The steps for buying a used car are: Budget for the Car, Choosing a
Body Style, Searching for Vehicles, Contacting the Seller, Test Driving the Automobile, and
Closing the Deal. Since each of these steps is vastly important in relation to this large purchase,
we’ll examine each one in its own respective article.
First, you need to budget for your vehicular purchase. If you don’t currently have a working
budget, then you need to make one so you’ll know how much car you can afford. A lot of people
make the mistake of looking at cars first (because that’s exciting), but there’s no point in making
yourself drool over your dream car only to find it’s completely out of your range. So, start with a
budget. When you’re putting together your budget, include all of your expenses: housing,
groceries, utilities, phone, internet, and cable; include any other recurring bills you may have.
And, since you are entering car ownership, you may want to create a section in your budget for
car repairs and preventive maintenance. Also, don’t forget to include car insurance in your
budget; if you don’t currently have it, you’ll need it for your new ride.
A sample monthly budget may look like this:
Net Income: $2000
Rent: $400
Groceries $500
Utilities $200
Phone $100
Internet/Cable $100
Medical Insurance $150
Car Maintenance $50

Car Insurance $200

budget

Amount available $300
Once you’ve established your monthly budget, you’ll see exactly how much you have to use
towards a car payment. It’s commonly recommended that your monthly car bill be no more than
20-25% of your monthly income; with a net income of $2000 as shown in the sample, 20-25% is
$400-500. However, devoting less than that is sometimes better. Seeing how there are 4 weeks
in most months, at the 25% level, you’re working a week each month just to make a car
payment. But remember, the 20-25% is the maximum; depending on your bills, you may only be
able to budget 15% towards a car, as illustrated in the sample budget above.

Now you can move to the next step: deciding what type of car (body style) you need. We’ll look
at that in the next article.

Must Read

Breaking Out of the Summer Doldrums

The last few weeks of summer brought little rain to the Carolina mountains. Streams withered and water warmed. Trout hunkered down in deep pools...

Effective Post-Operative Pain Management at Cherry Orchard Oral Surgery

Even though oral surgery may seem a bit daunting, it doesn’t have to live up to your scariest expectations. At Cherry Orchard Oral &...

Navigating Dental Anesthesia and Patient Comfort

When it comes to oral surgery, one of the primary concerns for patients is managing pain and anxiety during the procedure. At Cherry Orchard...

Getting Started at a Beautiful Place

The Pavillon campus sits on just over 160 acres of natural and luxurious land in the foothills of the Blue Ridge Mountains of western...

Revolutionizing Manufacturing Workflow: Introducing PASS

Effective order management and process transparency are essential for success in today's fast-paced manufacturing industry. Ben and Neil's new venture, PASS, offers a cloud-based...