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Buying a Vehicle on a Budget: 5 Frugal Tips

Posted: June 17, 2022 at 1:50 pm / by / comments (0)

These days, most of us are on a pretty tight budget which makes major purchases like cars and homes feel near impossible. As such a big expense, a car takes a lot of thoughtful planning and budgeting before you commit to the purchase – few people can afford to simply make an impulse decision and buy whatever they fancy.

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You need to understand exactly what you’re getting yourself into and do your best to keep your costs as low as possible throughout this journey. Here are a few ways to help you do so.

Plan Ahead

The price of the car itself is unfortunately only the first of many things you need to think about paying for. If you’re not paying cash, consider the interest you’ll be paying on an auto loan, as well as factors like insurance, maintenance costs, registration costs, fuel, new tires, unexpected repairs and any other unforeseen expenses you might have to account for.

These will all add up pretty quickly – make sure to sit down and do the math with a pen and paper instead of just in your head.

Get an Extended Warranty

One of the benefits of buying a brand new car is the potential for a service plan and warranty that will protect you financially for the first few years of ownership. If these are included in the price, you won’t need to pay for services or any repairs that need to be done during that time period.

This should be taken into consideration especially if you’re purchasing a more luxury brand. For example, a Lexus extended warranty or a BMW extended warranty are always a good idea.

Consider Second-Hand

While many people advocate for a brand new car and the benefits thereof, some people simply cannot afford a car in this price range. Fortunately, there are still plenty of benefits of buying second-hand.

Not only is a second-hand car much more affordable overall, but you won’t face major depreciation. This means that if you take good care of it, you’ll be able to resell it for close to the same price in a few years. You will also pay lower insurance premiums and enjoy the option of a bigger, better car for a lower price.

Do Your Research

Make sure you do your homework on the cars you’re looking at. Find out about specs and the cheapest cars that offer you what you need. Then, look around for where you can find those models for the best prices.

The more you read and research, the better prepared you’ll be for every aspect of a major purchase like this.

Shop Around For Insurance

When you’re shopping for car insurance, remember not to take the first policy you’re offered. Ask for a few different quotes and compare them to one another. If an insurance company that you really like has quoted you higher than somewhere else, you might be able to argue the price down by showing them cheaper quotes from other companies on the same vehicle.

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