Introduction

While shopping for a vehicle is often exciting, it can also be complicated and time-consuming. It involves balancing your desires with your economic reality, deciding whether to buy or lease, and knowing what is the best deal for you. This program will cover the basic information you need to know to make the best decisions, including:

Chapter 1: Understanding Your Financial Situation

To make the process efficient and to improve your chances of driving away happy (versus financially stressed), you will need to consider several factors:

• Your Needs. Think about your transportation requirements. Does your vehicle need to be large enough for a family of five, or small enough to fit in tight city parking spaces; tough enough to haul firewood or chic enough to drive clients around?
  
  
• Your Wants. Your desires certainly play a part in the car buying decision. Make, color, options, and style are all important to being happy with your final choice. Read vehicle -oriented magazines and websites for ideas.
  
  
• Your Budget. It is easy to get carried away and end up with a vehicle that is out of your price range and a monthly payment beyond your capacity. Your budget, not a salesperson’s opinion, should dictate your decision. Review your income and expenses to see what you have available each month for auto expenses.

Determine How Much You Can Afford
Complete the budgeting worksheet to see how much money you have available for car expenses. Make sure you include a monthly car payment, insurance premium, gas expense, the projected cost of maintenance and registration, and any parking expenses. If you need to estimate, use conservative figures.

If you find there is little or no money available for auto expenses, you may need to rework your budget by reducing or eliminating non-essential expenses.

Save For a Down Payment or Total Vehicle Cost
While it is possible to buy a vehicle with no money down, you will end up paying a lot more for it. Typically, the more you borrow, the more the vehicle will ultimately cost. To decrease the amount you finance, it is wise to make a significant down payment. With enough savings, you may be able to purchase outright – typically an option when buying a used vehicle, rather than a new one.

Effective saving begins with first knowing how much you want to save (determined by using the budget worksheet), then setting a reasonable date to achieve your goal. Use automatic deduction to make the process easy. Arrange with your financial institution to have a set sum deducted from your checking account and automatically deposited into savings.