So, you have now decided to buy a new car? While buying a new car, you need to first research about the prices. Then look at your available resources and decide the model you can easily afford to buy.
In case, you are thinking of leasing or financing then calculate the total cost involved. That is because your total cost would be including the loan amount, your down-payment and your monthly EMI amount.
Consider the following factors if you have decided to buy a new car.
- Total price
Remember that when you buy a car from the show room, it is not only the price of the car, but you have to consider additional cost of the following things too –
- Sales tax
- Registration fees
- Insurance cost
- Cost of various accessories and add on opted
- Gas or fuel cost
- Warranty cost
Therefore, you need to keep provision for additional amount too
- Monthly instalments
Now if you have decided to finance or lease your vehicle then you have to calculate your monthly instalments. This instalment will also include the interest component. Your instalment will depend upon how much down payment you can make. More you can afford to pay your down payment lower would be your burden on your monthly instalment.
- Trading your old vehicle
If you trade in your old vehicle then you will get some relief from the total cost that you pay for your new car. Here you have some scope for negotiation to get better price for your old vehicle as car dealers are ready to pay higher prices in order to clear their store.
- Make sure that your instalment is 10 per cent of your income
With all the above you should finally come to the situation where you need to spend about 10 per cent of your income as monthly instalment. If you can achieve this then it is worth buying a new car.
- Calculate your total debt
You must be having many other debts like credit card debt, mortgage payment and other debts. Calculate what percentage of your income you have to pay by adding this additional debt. According to consumer report one should not exceed 36 per cent of your gross income on repaying your debt. So, calculate to find whether you are within this limit.
Based on the above factor you may decide whether you can spend to buy a new car. Some of the top Mercedes Benz dealers offer excellent payment options for owning new and used cars. That is probably why more people choose Mercedes Benz, even above the Lexus SUV. Make sure you check out for such deals, so that you can save considerable amount of money on your purchase.