Budgeting Basics for Your First Car

Jan 31, 2012 (0) comment

When you’re ready to buy your first car, it’s advisable to consider a whole lot more than the price tag. The age and condition of the vehicle will impact running costs further down the track and affect the cost of your bay area insurance. Should you be applying for a car loan, remember too that the lender may have certain requirements in terms of what you can and can’t buy. Include ongoing costs in your budget to help you keep your finances under control.

Ongoing costs may include annual registration, maintenance checks, replacement tires and parts, insurance and gas. Factoring everything in together will give you an indication of your monthly or weekly spend, and whether you can afford it. In the event that you’re taking out a car loan, you will of course need to factor in repayments. Finance lenders may require you to purchase a vehicle within a certain age (no more than five years old, for instance), so you should check on this carefully before you start shopping around. It’s worth remembering too that your car insurance premiums are based on several factors including your age, driving record, the age of the vehicle and its general condition.

Legally, the state requires you to purchase a minimum amount of insurance. It can seem a lot to take in, so it may help if you seek professional advice. Give your agent a call and he or she should be able to advise what forms of bay area insurance you may need, what’s optional, and what it may cost depending on the type of vehicle you are looking at. 


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