Aside from property, buying a car is one of the biggest life purchases you will ever make. If you’re about to buy your first, you need to bear in mind the costs don’t just stop there. You will have to budget for its day-to-day running costs, not to mention any unexpected bills. To financially afford this purchase and everything that goes with it, here is a budgeting guide to help.
Work Out Your Budget for Your Car
The first step for buying a car is to work out your budget. This will outline whether you can purchase a brand-new ride or a used car. Your budget will also establish how much you can afford in terms of running costs. You must be realistic about your budget. Try not to go over your means as this can lead to problems later on. Sure, you may look cool driving around in a flashy vehicle, but if you’re struggling to pay day-to-day bills, this isn’t any fun!
Establish Running Costs
Once you’ve figured out how much you can realistically afford to spend on buying a car, it’s time to look into the running costs. There are all kinds of expenses that need to be factored in. These include fuel, servicing and maintenance, insurance, and vehicle tax. All of these quickly add up, so make sure to leave no stone unturned. How much you pay for running costs will depend on the type and age of your car.
Get the Best Car Insurance Deal
Car insurance is a legal requirement, and it’s likely to be your biggest running expense. The cost of car insurance depends on numerous factors, like your driving history and the type of car you are insuring. Rather than going to any old website to look for car insurance, why not check out Quotezone.co.uk? They have car insurance not on comparison sites that could be cheaper. You can use their services to find the best car insurance deals for you that could result in significant savings.
Plan for the Unexpected
Should something go wrong, having a financial backup plan is essential. If you purchase a car through a car finance plan or loan, there are many ‘what if’ situations that could make it hard work to keep up with payments. You may encounter a job loss, divorce, or accident at work that could see your monthly income drop. If this happens, you’ll still need to pay for your car, especially if you’ve bought it on finance. Help protect yourself against their financial impact by ensuring you’ve got insurance policies that cover health, your house, accidents, and unemployment. Also, have an emergency fund in place that you can dip into should you fall on hard times.
Whether you’re after an old banger or a brand-new state-of-the-art whip, buying a car shouldn’t be a decision you rush into. There are countless models and price tags to sift through, so take your time finding a vehicle that’s suitable for your day-to-day needs. When you budget and know what to expect, you’ll land on a car that’s perfect for you.
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