Next to purchasing your home, a vehicle may be the largest purchase you make. And it’s a purchase you’re going to make several times over your lifetime. Whether you buy a new or used car, you get what you pay for, and vehicles aren’t cheap.
Budgeting for your car loan is something you need to consider in advance. If you overestimate what you can pay, you’ll only end up resenting your car, and you may not be able to keep it. Here are a few guidelines to help you set a realistic budget for a car loan so that you can buy an affordable vehicle that you’ll also love to drive.
How to Budget for a Car Loan
Vehicles are a necessity for most people. But they are also a major expense. Before you run out and buy your next car, it’s a good idea to figure out what you can afford. You can begin by putting together a household budget and then a separate budget for your car.
Things to Include in Your Budget
If you’ve never made a household budget before, the prospect might be intimidating. You can start by including these broad categories in your list:
- Budgeting for Your Next Used Car
Now that you understand basic budgeting, how do you budget for a car? What most people don’t understand is that the cost of owning a vehicle involves more than just the price of the car. Here are the figures you need to keep in mind as you come up with a transportation budget:
- Your car payment – This is the regular payment you’ll make on the vehicle, including any interest.
- Tax, title, and license – Some of these are one-time fees that you’ll pay within 30 days of buying a used car. In Oklahoma City, tax on a used vehicle is $20 up to the first $1,500 in value and then 3.25% for the remaining value. The title is a one-time $17 fee, and registration is $96 for the first year.
- Auto insurance – Auto insurance rates can vary depending on your driving record, where you live, and the type of car you choose. For example, rates for a red sports car will be much higher than those for a beige sedan.
Routine and preventive maintenance – When you own a car, it’s also your job to maintain it. This involves regular oil and filter changes, tire rotations, and more involved maintenance. These items should be in your budget.
- Fuel costs – Don’t forget to create a fuel budget and consider that some vehicles get better gas mileage than others, and some also require more expensive fuel.
Get an Affordable Vehicle that You’ll Love to Drive
If you’re looking for a quality, affordable used car that you’re going to enjoy driving, Integrity Auto Finance wants to help. We won’t set our customers up for failure, meaning we’ll make sure that any car we sell has a payment that is within 25% or less of your monthly income.
Submit an Easy Financing inquiry, give us a call today at (405) 456-6235, or visit our convenient location in Oklahoma City to find out how we can help you get a used car that fits your budget.