Can I Afford My Dream Car?
Your dream car is a source of freedom, fun, and comfort. It’s an expression of who you are and a fulfilment of a wish you may have had for years. Imagine, cruising down the highway with your hand on the wheel, your favourite music playing, in the smoothest ride of your life. But, before you get too caught up in the fantasy, reality hits and you wonder, “Can I actually afford this?” Today, we’ll help you navigate the tricky world of car buying and explore alternatives if your dream car seems out of reach.
Ensure your Dream Car is Right for You
You may think this is crazy talk; of course, your dream car is right for you. However, if you’ve always dreamt of a small, sports car but you’ve got a family of five, then maybe that car isn’t ideal at this moment in your life. Even if your dream car seems like it will work for your living situation, you need to do a deep dive into the vehicle. Look up reviews, paying attention to safety ratings, reliability, fuel efficiency, technology, and features. Be prepared to pivot to another vehicle if the reviews are bad. It won’t be your dream car for long if you buy it and you’re practically living at the mechanic’s shop because of all the repairs you need.
Set a Budget
So, you’ve determined that your dream car will work for you and your family. It’s time to work out how much that vehicle costs. Unless you’re buying the car cash, you’ll need a loan. So factor in the total cost of the loan as well as car insurance, gas, and servicing. Financial experts recommend that you shouldn’t spend more than 15 – 20% of your take-home salary on car costs. You don’t want car payments to put a large strain on your other expenses or prevent you from saving. But don’t worry if your dream car seems too expensive, we have some tips to help you out.
Get the Best Price
If you don’t need a car right away, you can use that time to wait for a sale. Or you can negotiate with the dealership. There may be more leeway for discounts than you think.
But remember, the cost of the car is not the only thing you need to negotiate. You also want to ensure that you have the most competitive car loan. It may be easiest to simply apply for a car loan with your bank; but they may not offer the best rates. Instead, get quotes from as many financial institutions as you can. You should also pay attention to hidden costs. For example, some loans also include legal fees, which will increase how much you owe. It may also be possible to save by bundling. For example, if you can bundle your loan and car insurance, you may be able to reduce your overall costs.
Save for a Larger Downpayment
When getting a car loan, the more money you can put down upfront, the less you’ll need to borrow, reducing both your monthly payments and the total interest paid. If you don’t need to buy a new car immediately, you can develop a saving plan so that you can accumulate a more significant downpayment.
Remember, saving for a vehicle downpayment is a marathon, not a sprint. It may be tempting to dip into your car fund when you want to treat yourself, but don’t give in. You can also use visuals to keep you motivated. Make your dream car the background of your phone or put a marble in a jar for every hundred dollars you save. It may take some time, but your future self will thank you!
Consider Leasing
What if you’ve tried all our tips and you still can’t afford your dream car? Well, you may be able to lease the vehicle instead. Leasing allows you to make bitesize monthly payments to rent your dream car. The best leases include benefits such as insurance, GPS tracking, and roadside assistance, and they even allow you to trade in your vehicle for a newer model over time. There are even some agreements that offer vehicle ownership at the end of the lease. Sometimes, we think of car ownership as binary: either you can afford your dream vehicle, or you can’t. However, leasing is a third option that still allows you to get behind the wheel of your dream car.
Final Thoughts
Owning or leasing your dream car is a significant financial decision that shouldn’t be taken lightly. But with careful planning, you can make an informed choice that balances your dreams with your financial health. Whether you end up buying, leasing, or waiting a little longer to save up, remember, the goal is to enjoy your car without it becoming a financial burden. And you’re not alone in this process. You can always reach out to us to help you explore your options. Your dream car might be closer than you think!
