Responsible Car Buying Tips - Money Soldiers

Responsible Car Buying Tips

Transportation – whether for work or recreation – takes significant cash flow.  It’s a cost of living, no doubt about it.  Between budgeting in a new car payment, insurance and maintenance, the cost of owning a vehicle can almost make you wish for a bicycle instead.  But realistically, most cities are not equipped for the easy access of a bicycle between highways; weather and the sheer crude logistics of getting from point A to point B often work against you.

Luckily, when shopping for a car, consumers have the option of new car financing options.

Car Financing Options

How one considers the financial burden of a vehicle makes the difference in determining if you should lean more towards new or used.  If you have an established job, a long-held checking account and a trade-line, such as a credit card, buying new would give you the best value for your dollar.  Interest rates are competitive enough, especially if you have good to excellent credit.  You can also receive an extended manufacturer warranty and new car discounts from your insurance carrier.

If you have experienced some credit pitfalls or significant driving points against your license, it may be best to consider used car financing.  Many car dealerships run great deals with limited warranties on their used car fleets.  You typically can get approved with a mid-range bank willing to accept lower credit scores and flawed driving histories.

Sometimes, previous driving records can incur an SR-22 insurance requirement when purchasing a vehicle.  This can create a red flag for the bank if buying new, resulting in a higher than average interest rate, due to risk levels.  Additionally, new car insurance with a financial responsibility certificate addendum to the policy can be billed at double the rate.  Opting for certified new or used car pricing can significantly reduce the financial impact for you.

Responsible Planning

Understanding the financial measurement of allowance is necessary when shopping for cars.  While a newer car may be desired, you have to accurately consider the costs in association.  Between upkeep of a vehicle and the expenditures for gas – the cost can exceed what you intended to spend.

Sitting down with the dealership will help you to determine what allowances you can afford.  Always inquire about a car history and the Blue Book value to verify you are paying what the car is worth.  Take your time and don’t be in a rush to leave the dealership with keys in your hand.

After you visit a dealership, sit down with your finances and plan ahead.  Determine how much the monthly payment of the vehicle, the car insurance, gas and maintenance will amount to monthly.  Far too often, consumers will purchase a vehicle and discover they have sticker shock well after the ability to return the car.  Not paying timely can result in declined credit ranking and repossession with a judgment lien from the bank.

Avoid rushing into such an important decision.  Outside of home buying, car buying is the next highest purchase in your life.  Make it count by understanding the financial burden it brings.  This includes vehicles you may even pay 100 percent cash for.  That doesn’t cover the insurance requirements per state, or the maintenance and fuel.  Responsible choices now will prevent financial troubles later.

Jesse Fin

Jesse worked as a journalist for a large tv station in Korea in her past life. She now works full time at home as a blogger and loves to help her friends manage their personal budgets.

Click Here to Leave a Comment Below 18 comments
Grayson @ Debt Roundup - July 23, 2013

I financed my new car because I could get a loan near 1% and keep my cash in money making investments. I think it was the best move.

    Arnel Ariate - July 23, 2013

    Hi, Grayson. I think it’s a very good move, provided the money making investments make more than the money needed to pay for the car loan interest. Very nice. 🙂

Greg - July 24, 2013

Interesting in the last paragraph how car buying is second to home buying which is correct however vehicles diminish in value so it would be like comparing apples to oranges, i.e. it is not an investment, however you can find great deals on vehicle by going to an auction.

    Arnel Ariate - July 26, 2013

    Hi, Greg. That’s a good point about a car not being an investment unlike a house. But having a car is just too cool and convenient. I guess if you really want to buy a car you ought to do your homework to ensure you get the best bang for your buck. 🙂

Bryce - July 26, 2013

We bought a new car late last year after my wife informed me that she was scared to drive her 1996 Corolla. We had half the cost of the car in cash already (dividend payments that I hadn’t invested yet) and I got the rest by selling some of a muni-bond fund. She went out and bought the new car within a week. I normally would not get a new car, but she wanted a Prius hybrid, and I did not want to get a used hybrid that might need a replacement battery soon. We replaced the muni bond money shortly after several months of heightened saving (now I wish I hadn’t bought the munis, but oh well).

    Arnel Ariate - July 26, 2013

    Great story, Bryce. Thank you for sharing it with us. Are you having buyer’s remorse for buying the new car? What I like about your story is that you made sure to replace the money from the munis by increasing your savings effort. That is responsible of you, cool move. 🙂

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Laura @ Car MOTs - August 16, 2013

Another way to keep the costs of your car down is to ensure that when buying a second hand car it’s recently passed its MOT. Plus when you have to MOT your car ensure you don’t fail on easy to fix problems such as dead bulbs!

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Mike Loshe - September 13, 2013

Thanks for the share. You are also going to want to check out some reviews on the car dealer you end up going to. This is a great way to see how other’s buying experience played out. You can also find some tips here on how to haggle with them a little bit to get the price lower.

Henery Walker - December 20, 2013

This blog really dome good information about the finance of cars and how to handle it . It will help a buyer to crack a good deal that will make profit for him .

    Arnel Ariate - December 21, 2013

    Thank you for visiting, Henery.

Johnny Shi - April 24, 2015

I really appreciate what you said about responsible planning. You have to avoid rushing into these types of situations and it is really great that dealerships are willing to help you do that. Of course you might want a new car, every one does. The problem is, that it is rarely applicable. Responsible planning comes first. This has been really informative. Thanks for sharing.

Delores Lyon - May 2, 2015

Thanks for sharing this advice on buying a car responsibly! It really is true that you need to know all the documents you need when buying a car. Things like vehicle registration and insurance really can’t be ignored. In fact, I think if the car you’re buying isn’t registered, you should probably stay away from it!

Randolph Hoover - June 4, 2015

Her Arnel! Great post! Here are some of the thins things I’ve had pondered upon and considered on buying a car:

-check whether the seller has a good track record.
-it is a must to make sure that every specification is on the post itself.
– conduct research well on what specific model you’re looking for.
-always ask for the condition of the specs of your future purchase.
– Looking for alternatives is also a big must in choosing for an ideal car.

Freddy Palander - July 25, 2015

Buying a car means a significant investment of your time and your financial resources. Your time investment involves doing the necessary research to ensure you get the best possible car in your budget range.


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