How to set your budget when buying a used car
Buying a used car is a budget-friendly, smart way to get your hands on the vehicle you want for less. Plus, used cars usually depreciate less than new cars so they often have better resale value, and if you’re careful when you buy, yours may be just as good as the new version.
With that in mind, we’ve put together a guide to setting your budget and planning, to make buying a used car easier.
Know what you want before you buy
Before you even set foot on a used car dealership’s yard you should have a clear idea of what type of used car you want. To narrow the field down ask yourself:
- How many seats do I need?
- Do I want a manual or an automatic?
- What do I value in terms of performance – fuel efficiency, towing power, or speed?
- How important is safety? If you answered ‘very’ go for something with a five-star ANCAP safety rating.
- Do I want a sedan, SUV, compact car, coupe, ute or van?
- What will I mainly be using the car for?
- Are low running costs important to me?
Once you’ve narrowed down what you want in a car it’ll be easy to know how much you’ve got to spend to buy the right vehicle. Check out our guide to used cars at every price range to get started.
The key to buying well is planning before you head to the dealership.
Know your budget and stick to it
Once you’ve narrowed down your choices and figured out roughly how much you’ll need to spend, it’s time to start saving. There are countless ways to save for a car but we reckon the best is to simply decide when you want to buy the car, then calculate how much you’ll have to save every month to make it happen.
For example, let’s say you want to buy your next car in around a year and you’re expecting it to cost $15,000. You’ll need to take just under $1,250 out of each monthly pay and put it aside to reach your goal.
If you need a car right now but you don’t have the cash to buy it don’t stress. Nicholson Auto offers car finance with reasonable interest rates, and flexible terms, backed by reputable lenders.
We’ll make sure that finance is right for you then walk you through the entire application process to make buying your used car easier.
The right used car could be just as good as the new version.
Put money aside for extra costs
Buying a car costs more than the purchase price. You’ll need to buy an insurance policy as soon as you drive the car off the lot, and you may also have to pay for a new warrant of fitness and registration if there’s not long left on it when you buy. If buying from a dealer both a new warrant of fitness and registration will be supplied.
You’ll also obviously need to pay for petrol, regular servicing and occasional repairs (if damage isn’t insured). For that reason it’s always a good idea to save $500 to $2,000 extra when saving for a used car so that these costs don’t catch you unaware.
Have you got your budget ready? If you need a hand working out what you need and what you can afford, or you’re ready to buy, drop into your nearest Nicholson Auto and one of our friendly experts will give you a hand.