If you are thinking about purchasing a car, there are many options that you are going to have. For example, you can purchase a used car or a new car and you have multiple financing options. In the end, your decision should be based on these considerations:
- How Much Money You Have: Of course, you want to be sure that you can actually afford the car. Since there are many ways that you could finance a car, you have multiple options in making the monthly payments as affordable as possible. The best way to determine if you can afford a car though is to determine whether or not you can afford the payments over three years. If you can't afford the payments when they are spilt up over a three year period, then you probably cannot afford the car. You typically don't want to finance a car for longer than three years just to make the payments lower because you never know what can change. Over three years time, your job stability probably isn't going to change, but it might after that.
- Purchasing a Used Car: Most people think their best option is to purchase a new car because the resale value will be higher if they decide to sell it used in the future. However, this isn't the case. As soon as you drive a new car off the car dealer's lot, you lose a great deal of depreciation value. With a used car, you won't lose as much money. The best option is to typically look for a used car that comes with a warranty or is certified by the dealer.
- Lease Consideration: One thing you may consider is leasing a car. The benefit of leasing is that you are typically going to have lower monthly payments on the car than if you actually bought the car and you are able to trade it in at the end of the lease term for a brand new car. However, one problem with leasing you should consider is just how difficult it may be for you to avoid going over the mileage fees. If you drive a lot, then leasing a car probably isn't the best option.
- The Type of Car: Another thing you need to keep in mind is that you shouldn't base your purchase off your desires, but rather your needs. For example, if purchasing a car is going to put a little bit of strain on you financially or if you commute to work, then you probably want a car that is going to save you on gas. This means you shouldn't look into SUVs even if that's the type of car you have always envisioned yourself driving.
By making these four considerations before purchasing a car, you can be sure that you get a car that is the best for you financially and for your driving needs.