For many of us, purchasing a vehicle is a big decision, and it can perhaps be one of the biggest decisions in our adult life, short only of buying a house, getting married, or having children. But when you plan to buy a vehicle, you also have to think about how you can pay for it – in fact, this is one of your most vital considerations. Aside from the actual cost, think also about the cost of running the vehicle in the long term. So how can you work all of this out? You need to think carefully about your budget for your vehicle, of course. Here’s your all-important guide to finding the right vehicle for your budget.
Determining your car budget
Your budget will determine a few things, such as whether you can afford to purchase a new or used vehicle or pay for a car outright, or whether or not you need to apply for a vehicle loan or other financing agreement. But here’s one important aspect regardless of if you decide to make an outright purchase or apply for a loan or lease: you should be realistic. Try not to over-extend yourself because this can lead to greater issues later on, especially if you don’t have other savings or you experience a drop in income.
Figuring out the operating costs
Once you have determined how much your budget for your new vehicle will be, figure out how much it costs to drive it. You should remember, for instance, that UK drivers spend a yearly average of around £1700+ on running and operating their vehicles, according to the Office for National Statistics in 2018. But this doesn’t yet factor in depreciation costs, which is equivalent to the amount lost by a vehicle each year in terms of its resale value.
Some expenses associated with running and operating a vehicle include fuel, insurance, maintenance and servicing, and vehicle tax. If you get a new car, the cost of fuel can be around £900, while insurance may be approximately £500. Maintenance and servicing can set you back £300, while vehicle tax can be around £10+.
Know where to find the right vehicle
Unless you are already thinking of your dream vehicle, there are several ways to look for the right vehicle for your needs. You can, for instance, check out motoring sites and vehicle magazines, or you can visit your local dealer or go online and look for the best new car deals. Nowadays, going online is the preferred option because the costs can drop significantly, and it’s a safer way to look for the perfect vehicle for you.
Other considerations
So you have already decided that you can afford a new vehicle and have set your budget for it – what next? There are other essential aspects to consider as well. One of these is the warranty, so consider the length of the warranty that’s best for you. You should also consider the safety of the vehicle and its reliability, and if it’s a new vehicle, think about how well the vehicle’s value will hold over time. Consider the car’s purpose and how often you will drive it and for how long, and consider the space you require for passengers, equipment, bags, and the like.
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