[B]uying a car is a major investment. It can be fun, especially when you see all of the new features and systems that are available. However, it should also be a serious decision that you make after considering the following three things.
1. Your Credit
If you have good credit, you’ll find it much easier to be approved for financing than if you have poor credit. One of the first things you should do is get a copy of your credit report and make sure everything is accurate. If you have a lot of negative information on your credit report, you may want to wait until it improves before you apply for a car loan. If that’s not possible, realize you will pay a higher rate of interest for a loan.
2. Your Budget
Even if you are approved for a car loan, only you know if you can afford those monthly payments. You might find out that you can only afford payments half the amount of what you’ve been approved for. Take time to look at your budget and calculate how much you can put towards a monthly payment and still be able to pay for your other expenses.
3. Other Expenses
All too often, the only consideration when buying a car is the monthly payment. However, that will not be the only expense you have for your car. You’ll have to pay for insurance, which may be higher or lower than what you’re currently paying. You must include that in your budget.
You’ll also have maintenance costs even with a newer vehicle. Oil changes, tire rotation, and wheel alignments all add up over time and must be factored into your budget. Depending on the kind of vehicle you’re getting, you may also pay more in gas, which can really take a bite out of your budget if you aren’t prepared.
Make sure you’re ready to take on a new car payment without damaging your budget and your credit. Think about all of the costs associated with a vehicle before you commit to a purchase.
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