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Finding the Right Vehicle for Your Budget

A vehicle can be an awesome method of transportation and a valuable tool in achieving the life you desire, or a financial burden that eats away at your peace of mind and prevents you from participating in other meaningful activities. At Instant Financial Group, we exist to ensure your vehicle purchasing experience isn’t the latter.

To get a vehicle that meets your lifestyle needs and also fits your budget, research is essential. Below, are three questions to answer when finding the right vehicle for you!

What’s the Best Vehicle for Your Lifestyle?

Sometimes people know they need a new vehicle; however, they don’t have a good idea as to what that vehicle is.  There are a number of categories you can use to determine what features are essential in your next purchase. For example, vehicle size: Does the vehicle need to be large or can you get by with a medium to a small-sized vehicle? Consider how many people you’ll be transporting in the vehicle on an average day and or whether you’ll be using the vehicle to transport other items.

Another important vehicle category is vehicle purpose (e.g. are you looking for a family car, sports car, city car, utility vehicle, etc.)

What’s Your Budget?

When it comes to determining how much you can afford to spend on a vehicle, the following are three rules to ensure you’re prepared for the investment you are making:

  1. Put down at least 20 percent;
  2. Ideally, the term of your car loan shouldn’t be more than four years;
  3. And total car payments should not exceed 10 percent of your gross income. Remember, every month you’ll have other things to put your money towards than just car payments.

Is the Vehicle Going to be Brand New or Used?

There are a number of important factors to consider when choosing between a new and used vehicle. Your current financial situation (how much you have in savings, your income, as well as your other living expenses) and the purpose of the vehicle (e.g. work, family, hobby, etc.) are key factors in deciding what’s right for you.

New cars offer a greater user experience and higher reliability over used cars. On the flip side, they also tend to come with higher insurance, as the vehicle would cost more to replace–should it be stolen or written-off in an accident.

Used cars are cheaper upfront and will likely have lower insurance costs; however, they require more costly expenses and have lower reliability.