Setting a budget

When you set out to buy a car, the stakes are a bit higher than your average shopping excursion, so the important thing is to decide how much you want to spend before you set off and make sure you don’t go over this amount. You also need to make sure your budget is realistic and is in line with current car prices.

Part of setting your budget is working out how you’ll fund the purchase. Do you have savings, or a car to trade in? Will you be taking out a loan or maybe even leasing the car? Looking at a financing option can make a car affordable as you can pay it off in monthly instalments, but remember you’ll pay interest on the loan, which means you will in effect pay more money for the car. There’s no doubt this will give you extra choice but make sure you’re comfortable with the repayments.

Buying the car is only part of the picture, you also need to look at the cost of ownership.