Do you know which is the most prominent mistake people make when shopping for a secondhand car? The answer is budget, not knowing how much you can afford to pay for the car.
While searching for a used car, it is advisable to rope in a myriad of factors to narrow down the search efficiently.
Unless you can manage the vehicle’s total cost, you are required to finance your used car. You have to determine how much you want to spend and what time frame you wish to pay off to avoid too much interest.
As a rule of thumb, you must have enough money to pay off the 20% downpayment of the car. If 20% is higher, then go for a lower priced car. Explore the best cars on a trustworthy used car selling website.
The optimal loan period for a secondhand car is 48 months. Minus the down payment from the car’s full cost, after that divide the value by 48. Then, ask yourself, can I afford the monthly EMI?
Now, add to that the insurance, maintenance, and fuel costs, not to forget, the interest. If you can afford all of these, then seek out for a used car loan.
If you are planning to get a secondhand car, go to your dealership only when you know your credit score. If you have a bad or credit score, then your loan’s odds of approval are extremely low. Even if it is approved, the Interest rate would be on the higher side.
Lenders want to know whether you have the capability to pay off the loan from your previous record. Yes, 700 is the ideal credit score, but anything above 600 will work. Be patient, even if your loan request is rejected, improve your credit score, and apply.
Insurance & Maintenance Costs
Unfortunately, when its insurance costs, age is against you. Young drivers have to pay off approximately 200 dollars per month, whereas, for experienced drivers, this is way low. However, you can do so many things to lower this payment.
For instance, you can opt for a professional driving license to get a discount on this and speak to an insurance agent for the right advice.
In addition to insurance, there are maintenance and fuel costs. Fuel is only getting expensive; therefore, it is essential not to overlook the mileage of the secondhand car.
Don’t fall into the trap of low-priced cheap used cars in good condition but with low mileage, because later on, you’ll have to pay heavily.
One of the most elemental parts of maintenance costs is replacing tires. Check the tires to know how soon you need to replace it.
Car budgeting isn’t just about the price of the used car; instead, it’s about analyzing the expenses that will pop up and down the road. Remember not to bite more than what you chew off. If the expected maintenance bills are hefty, then avoid buying a high-end car that makes you spend big.
Finally, when you have a budget, stick to it. Narrow down your choices and then do comprehensive market research to find amazing deals over the Internet.
Author: Ailsa Martin