Determine your Used Car Budget

You made the decision to buy a new car. What comes next? Well, you first have to figure out how much your budget is. After all, buying a car is a considerable investment, even if you resort to buying a used one.

While there are lots of affordable used cars in Calgary, preparing a budget is still essential. If you’re still on the fence on this one, we’re here to help you. Here are the tips we’ve prepared so you can determine your used car budget before you buy one:

1. Calculate all of your monthly expenses

This is particularly important for those who want to apply for used car financing in Calgary. To do this, you have to gather all of your bills (these include your utility, mortgage, internet, and other monthly bills) alongside your latest credit card statements.

After that, categorize them into either fixed or variable. All of your expenses that remain the same every month (i.e. internet, mortgage, utility) shall go to fixed expenses while stuff like groceries, food, clothes, and other stuff shall to go variable expenses.

Once you’re done categorizing, calculate the total for each column. This should give you an insight into your average monthly expenses.

2. Clear, or at least minimize, any existing debts

We highly recommend clearing off any debts you have before you commit to investing in a car, even if it’s a used one. Since they can only add to your financial burden down the road, especially if you get a car loan, clearing off your debts (or at least minimizing them) can help you allocate your extra money on fuel and other essentials.

3. Decide on which car you need

Now that you’ve got your expenses all figured out, the next thing you want to do is to decide on which car you want to buy.

A good idea here is to narrow down your choices to around three or four cars. Check their model, make, and year. Then, check their prices so you can determine whether they fit your budget or not. You can also search for their features online so you can have a grasp of what they offer.

4. Estimate Ownership Costs

After you’ve decided on which car to purchase, what you need to do next is estimate your ownership costs. On average, car ownership will require around $9500, including expenses like maintenance, insurance, financing, depreciation, and of course, fuel. You can use this estimated cost to properly budget your expenses. Just keep in mind that it will depend on the car you pick.

We also highly recommend looking for a used car dealer in Calgary to help you out. This way, you’ll be able to find an affordable car in good working condition.

5. Test drive your options

You can make an appointment with a used car dealer for a test drive. This way, you can thoroughly evaluate the options you have – just make sure not to rush it. To add an extra layer of security, you can have the car inspected by a qualified mechanic for any potential issue that could lead to major repairs later on.

The Key Takeaway

Used car budgeting isn’t really that hard as long as you know which steps you should follow. Once you’re able to follow all of the steps above, you shouldn’t have any major issues when you go shopping for a used car.

If you have enough savings to buy one, then good. However, it’s a good idea to leave a little bit of a wiggle room so you can still use your extra funds on some other expenses. This is also when car loans come in handy, as they take a considerable load off your finances so that you can finally get the car you want.