Buying a car is probably the second most expensive thing you will ever buy after your home. While it’s not a simple decision looking at the initial buying costs and the running costs after the purchase, it requires in-depth analysis. Most people choose to pay for down payments for the vehicle and later the balance in installments. When signing up for such a deal, you need to be sure that you can afford the said monthly payments comfortably until you are through with the entire amount. Here are three ways to stay on track.
Boost the down Payment
A bigger down payment means that you will have a smaller balance for the vehicle and consecutively, less stress. Consider sourcing funds from your private accounts, pulling together funds with your spouse, borrow money from friends and family to make the down payment considerably significant. The balance should be manageable, and the interests charged will be lower. You may consider going for the long-term loan payment terms that stretch to prolonged periods with low monthly payments to make them manageable.
Buy a Less Expensive Car
Can you comfortably afford that first vehicle you desire without turning your monthly payments into a crisis? Your monthly car payments shouldn’t force you out of your normal lifestyle and budget just to afford it. If the proposed installments seem to bring a burden, it would be wiser to shop for a vehicle at a dealership that’s less expensive and with less harsh terms. Remember, the more expensive a car is, the more you will be forced to pay huge installments and down payments to match its value.
Buying Vs Leasing
Leasing is generally considered a bad idea by the majority of people, primarily because you will pay monthly payments for a car you will not own in the end. But is leasing really a bad idea compared to buying? Leasing allows you to pay for the use of the car during the contract period. During this time, you will pay monthly payments but, in this case, lower than the buying alternative. In some states, you only pay sales tax for the monthly payments instead of the total value of the car. You will also be exempted from paying the full depreciation costs of the vehicle since you not buying the car. Leasing might be the way to go if you don’t want to stress a lot about monthly payments.
There are multiple ways to reduce the monthly car payments. However, do not rush into buying a car without considering these three options.