How much of a vehicle

can I afford?

Are you in the market for a new ride? Buying a vehicle is more than just negotiating the sticker price on a car, truck, motorcycle or RV. There are so many other “items” to consider.

First is the financing. What interest rate will you pay or are you going to purchase the vehicle with cash? Over the course of 3 to 5 years, you could pay thousands of your hard earned dollars on interest payments. It does help to get pre-approved by a reputable lender before heading to the dealership, or looking in the classified ads. At least you will know you have a set amount of money you can use to purchase your new ride and what interest rate you will pay.

One thing that is often not considered when purchasing is insurance costs. Vehicle insurance costs can be astronomical and a definite blow to your wallet. If you know what kind of vehicle you are buying, call your insurance agent and find out how much that will cost in insurance premiums.

How does this vehicle do on gas mileage? With the price of gas surpassing $3.00 or more per gallon, is it wise to buy a gas guzzler or one that gets better gas mileage? Have you considered a hybrid? The mileage your vehicle gets, in relation to the amount of miles you drive, can make a large financial impact.

What is the maintenance record of the vehicle you are considering buying? Maintenance costs can be in the hundreds or easily thousands of dollars each year. Should you consider purchasing a vehicle warranty?

Do I need a new or used vehicle? Depreciation costs are usually the most in the first year of new car ownership. Do you want to bear that expense or would you rather have someone else take that expense and buy a one year old vehicle?

Never force a vehicle to fit your budget. Only you know how much you can really afford to buy. Don’t over-extend or commit yourself to a vehicle that is above your budget. Figure out what monthly payment you can handle, the insurance cost, how much it will cost you in gas, and buy a vehicle that you can afford. It just makes good financial sense.