Figuring out if you can afford the car you’ve been eyeing is essential. To help, check out our 3 easy rules to know if you can.
Did you know that your monthly car costs should be within 10% of your monthly income? It’s easy to overlook the costs that come directly after the purchase – for example, gas, car insurance, and even maintenance, so check out the 3 golden rules!
RULE #1 | Car insurance – can’t pick up the car without it!
If you are thinking of purchasing a new car, we always recommend you contact your broker and check out what the monthly insurance cost for that particular car would be. You can’t just assume it will be the same as the car you are driving currently – especially because it most likely won’t be.
RULE #2 | Car maintenance + servicing – might throw your budget off!
Depending on the type of car you purchase your maintenance can seriously impact your budget. Youngs Insurance explains, “A new vehicle will cost you more money up front, but the new vehicle warranty you receive will lower maintenance costs for the first few years.” On the other hand, an older car may cost less up front, but your maintenance and servicing could higher. According to Youngs Insurance, with an older car, it would be helpful to “budget at least $100 per month for maintenance and unexpected servicing costs.”
RULE #3 | All those EXTRA car costs….
We all know that gas prices fluctuate and that makes budgeting for it more challenging, but the amount of time you fill up also depends on the car you purchase. Don’t forget to review the gas mileage rating for the car you’re thinking of buying. Plus, remember the annual fee for your