How To Choose A Car Based On Need And Monthly Budget

You should take the time to do an analysis on your vehicle usage, needs, and costs before you go out and buy a new car. Buying a new car that really doesn't fit your lifestyle or budget could prove to be a costly mistake that can take you years to recover from financially before you can afford to purchase a different vehicle that fits your needs and wants. Here is how to do a self-analysis that will help you decide what type of car works best for you based on your needs and monthly costs.

Determine Your Needs

That nice sports car might look great and be fun to drive, but you will have to determine whether it will fit your lifestyle now and in the foreseeable future. If you are young and will be getting married or expect to have children soon, you need to determine if a sports car will have the room to carry a growing family – since sports cars are notoriously small, you can figure that the answer to that question would be no. However, if your children are grown and you don't expect to have any more, a new sports car might be just what you need to get an added boost in your life.

Monthly Budget

You should develop your car budget before you head out to the dealerships. The budget should be based on your current financial condition and not on the financial condition you hope to have a year or two down the line. There are a number of factors to consider including monthly payments, insurance costs, and operating costs. Car payments and insurance premiums are typically fixed costs that you can easily add together to find out how much you will have to pay each month, but operating costs can be a bit more difficult to ascertain. You should learn how many miles per gallon (mpg) the vehicle you are looking to buy gets and then divide that figure by how many miles you expect to drive in a month – this will give you the number of gallons of gas you will have to purchase each month. Multiply the number of gallons needed per month with the average cost of a gallon of gas in your region to determine how much you will have to spend on fuel. You should also add in expected annual maintenance costs like new brake shoes, oil changes, and tires, and then divide that figure by 12 to get your expected monthly costs.

New cars can be expensive, and you'll want to make sure you purchase one that meets your current needs (and your needs in the foreseeable future), and one that you'll be able to afford without breaking your monthly budget.