Buying a car could prove to be a disastrous mistake if you’re on a budget and overextend yourself. Before jumping in the deep-end, there are a number of factors to consider to ensure that you don’t end up regretting the purchase.
To help you avoid an expensive mistake, we have listed a number of tips below to determine the feasibility of purchasing a vehicle.
Buying a car is quite the purchase. You should definitely set a strict budget and stick to it. Remember too that the budget isn’t limited to the price of the vehicle. You also have to consider future expenses that come with the purchase. Fuel, insurance, maintenance, as well as repayments are factors to consider when working on your budget.
In addition, it helps to know beforehand if you’re buying a brand new or used car. A new car may sound really exciting to have, but it’s worth noting that a second hand car can be just as useful as a new one; Not only that, buying a used car can also help you save. Just make sure you don’t get a lemon.
Research and understand your vehicle requirements
Just like any big purchase, it is important to know what you need in a vehicle before heading off to the car dealer. Do you need a car just for yourself or something that can fit the whole family? Is fuel efficiency something you’d really like in a car? It would also do you well to compare car models and manufacturers to determine which car actually meets your requirements.
Remember, buying a car that offers features you don’t really need will take a toll on your budget. So, take your time researching and planning your car purchase to ensure that you get the best car that meets all your needs.
Pay with cash or with finance
Once you’ve narrowed down your car requirements, it’s time to consider how you’re going to pay for the purchase. It’s best to buy a car when you already have some cash saved up for the car. However, not everyone is fortunate enough to buy a car from savings. If this is the case, you have the option of approaching banks or companies offering flexible financing solutions such as these car loans by stratton.
Paying outright could mean buying the car at a cheaper cost since there’s no interest to consider. However, there might be a chance that your budget could be compromised if new expenses come up along the way. On the other hand, getting a car through financing will help spread cash flow burden on your budget. The best thing to do is to create at least a 12-month cash flow projection to give you an idea whether or not buying outright or through car financing is the way to go.
Choosing the right finance broker
Never make the mistake of going with the first finance broker you come across with. Shop around! You don’t want to get stuck with a broker who doesn’t have your best interests at heart, do you?
The first thing to consider is to look for someone seems to really know the business. This way, they can clearly answer any questions you might have. Also, work with a finance broker you’re comfortable with. This should make it easy for you to ask anything that confuses you. Also, a great car finance broker should have no problems assisting you with all your queries until you have clearly understood all the financing terms and conditions.
If you have a business, you can claim deductions for company-related car expenses when doing your tax returns. Make sure you log information whenever you use your car for the following business purposes: delivering items or collecting supplies, traveling between workplaces, attending meetings or conferences.
Buying a car for business can get complicated. Take time to research before making the big purchase. Make sure that the company can afford a company car before getting one. Otherwise, buying one might end up hurting the business instead of being beneficial.
This article was written in collaboration with stratton. Stratton has grown to become the largest vehicle finance broker in Australia. With access to a panel of lenders, stratton provide competitive finance solutions to thousands of Australians each year. If you require a vehicle finance solution, reach out to their professional team today.