How to Budget for a New Vehicle

This post is part of a sponsored automotive series. All opinions are mine.

If you’re in the market for a new vehicle, the odds are you’ve already thought about how you’re going to pay for it. Perhaps you have savings that you’ve stowed away, or if you’ve just started thinking about purchasing a new vehicle then you might be trying to figure out how to budget for the new expense. I learned a few tips from my friends at this Georgia Jeep dealer, and here are some things to consider when making the decision. 

First off, you’ll want to decide if you want to lease or purchase the vehicle. Some people choose to lease because you don’t need to put as much money down up front. It also gives you the peace of mind that in a few years, you’ll be able to swap it out for something else. Of course this depends on what your long term plans are for the vehicle. Other people choose to purchase the vehicle outright so that instead of essentially “renting” the vehicle, it’s more of an investment that they’ll get money back out of if they choose to sell in the long run. Neither choice is right or wrong, it just depends on your preferences, finances and long term plans. 

Leasing

If you do choose to lease, you’ll still need to come up with the initial down payment and first lease payment. And of course every month from there, you will have to budget for the monthly payment as well. The payment you’re budgeting for is based primarily on the value of your vehicle so a monthly payment on a $20,000 vehicle is going to be much less than a lease payment on a $50,000 vehicle. You’ll also need to budget for car insurance as well. 

Purchasing

When purchasing your vehicle, you’ll also need to consider your down payment along with any monthly payments that might incur if you decide to finance the vehicle. If you are trading in an older vehicle, it will help to bring down that initial down payment cost which will ultimately bring down the total cost as well. 

Budgeting

So what does all this boil down to? Budgeting for those costs mentioned above. Once you have a number you need to save or budget away for each month, it makes it easier to figure out where you can cut costs. For instance, if you have a $250 per month car payment, you can figure that maybe cutting your cable bill could save you $50, going out to eat less could save you $100 per month, or just cutting back on general spending can also add up. To best figure out where you can save your money, you should look to where you are most often spending your money. That’s where you will find your biggest savings by cutting unnecessary expenses. 

With a little determination, planning and budgeting, you can figure out a way to afford that new vehicle and make the purchase a positive one!