1. Can you afford it?
Work out your budget. It’s usually a good idea to take note of your money situation and work out your budget. This can help you decide how much you can put towards buying a car and whether it will be new or second hand. There are advantages and disadvantages to getting a new or used car. Generally, new cars drop in value practically from the minute you drive off, but may possibly hold their value over the longer term, depending on the make and model. A second-hand car is cheaper to buy, but make sure you check out its condition and find out as much as possible about its history. Your decision will depend on your budget and this will also give you an idea of how you’ll manage with the on-going costs.
2. How to pay
There are lots of ways you can cover the cost of buying, some more expensive than others. You might have saved up enough money during the years for you to afford paying in cash for the purchase of your car. You may be in position to negotiate a better deal if you pay in cash. If you borrow from a bank make sure you understand how much it will cost you over the life of the loan by checking the APR (Annual Percentage Rate), and think about how the value of the car may change by the time you finish paying for it. Be sure to shop around to get the right deal for your loan. You can decide to pay the dealer in installments. Many dealers have different finance arrangements; find out how the different options work and which one may be right for you.
3. Other running costs
It’s not just the cost of the car you have to think about. You will also need to keep your car going, so remember to consider other regular costs such as fuel and service maintenance. Most of all, don’t forget the annual licence payment and motor insurance to keep your car on the road.
You have to take out motor insurance before you can drive your car in a public place. There are different levels of cover to choose from. Motor insurance protects you, your vehicle and other motorists against liability in the event of any accident. It is illegal not to have any form of motor insurance.
When looking for car insurance, don’t always settle for the cheapest insurance. It is important to understand the different types of policies available, and their limitations. Some policies will insure for more eventualities than others, and you need to make sure that you choose the correct policy without paying too much. Your car insurance policy should be based on your experience, driving style, age and affordability.