Buying a Car Without Wrecking Your Budget

Knowledge Center

Buying a Car Without Wrecking Your Budget

Buying a Car Without Wrecking Your Budget

Buying a car is a big decision that not only includes finding the make and model you like best, but also includes the financial responsibilities that accompany it. Sometimes our wants overpower our needs and car buyers end up purchasing a vehicle with a price tag that exceeds their budget. We’re here with helpful tips to make sure your next car purchase is in line with what you want, need, and can afford.


Know Your Budget

Before you can start shopping for a new car, it’s a good idea to sit down and decide how much you can afford to spend. Your budget should not only include your monthly car payments, but also other expenses such as gas, car insurance, and car maintenance. Typically, you want to try not to spend more than 35% of your monthly income on car payments, but ideally you should aim for under 15%. You can use our Car Payment Calculator to find out how much you can afford on your monthly payments. To save more in other areas, we recommend shopping around for the best deals on car insurance and getting the best quote from reliable mechanics when getting car maintenance. The more you can save, the better!


Think About What You Need

Making a list of your “must haves” and “nice to haves” options is important before visiting the dealership. Everyone wants the newest and coolest features – heated seats, parking assistance, Wi-Fi, keyless entry, and more. For just a few hundred or couple thousand dollars, you can have it all, but you need to determine what you need and what you want because it all leads back to the golden rule: don’t purchase above your means. Be willing to compromise on some of those “wants” in order to get a car that fits your budget comfortably.


Consider Shopping Used

Here’s a little secret: new cars are often way pricier than they are actually worth. The new car smell, the brand-new label, the security that it’s never been driven before – all of this inflates the cost more than its realistic value to you as transportation. Shopping for a used car can often be one of the best financial decisions you’ll make. Used cars often come at a fraction of the cost compared to the newest model. Another benefit of used cars is they don’t lose their value as quickly as a brand new one. This means that if, for whatever reason, you need to sell your car after buying it, you’re likely to get much more of your money back.


Shop for the Best Financing

Many dealerships will post ads stating “Instant Approval” or “No Credit Checks.” Although these offers sound tempting, they are almost too good to be true. Offers such as this typically require a large down payment or slap you with outrageously high interest rates. It’s better to compare loan rates from other places such as your bank or local credit union. From time to time they will run specials that offer low and competitive interest rates. You also want to make sure that your credit score is in the best condition it can be in before applying for your auto loan. Higher credit scores are typically rewarded with lower interest rates and better loan terms, ultimately saving you the most money. You can check out our auto loan rates to help you get started with your comparison shopping!


Don't Be Afraid to Negotiate

The idea of haggling a salesperson for a lower price on a car makes some people uncomfortable, but negotiating is part of their job. They do it every day and you won’t insult them by trying to get a better deal. You can do research beforehand on similar vehicle types that are selling in your area. That way, when you show up, you’ll already have some knowledge to negotiate with. Always decide on a maximum amount that you are willing to spend, and if that price can’t be met, walk away. It’s normal to expect a bit of back and forth between you and the salesperson before landing on an agreeable price, so don’t feel intimidated.

Buying a car is a huge financial milestone, but it doesn’t have to completely break the bank. Making sure that you stick to your budget, do your research, and find the best offer to fit your needs is crucial in the car buying process. If you feel like you’re ready to buy, you can apply online or make an appointment to visit your local branch and one of our helpful member service representatives will be glad to assist you.



At Robins Financial Credit Union, our mission is to enhance the financial well-being of our members and community. We honor this commitment by providing educational content to help you make the most of your finances. Read our other blog articles to help you gain the financial knowledge you need to succeed.


I’m Ready to Buy