Should I Buy a Car? How to Know if You’re Financially Ready

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Every large purchase requires careful deliberation. That’s because large investments entail significant financial implications for you or your family. These big-ticket investments can include houses and the most common being cars.

You’ve probably heard of the financial responsibilities associated with owning a vehicle. Owning a car isn’t a one-time payment. You can’t afford to be ultimately head over heels over the idea of owning a car because it’s more than just purchasing one then forgetting about the other fees that come with it.

Before asking yourself, “Should I buy a car?” it’s crucial that you thoroughly educate yourself on the various factors to consider before purchasing. To help you with your decision, here’s what you should keep in mind to determine if you’re financially ready to buy a car.

7 Financial Factors to Consider When Buying a Car

Owning a car is a huge financial responsibility. We’ve listed seven things to help you decide whether you’re ready to make that automobile purchase.

  1. Adequate research
    Researching doesn’t only entail getting your head in between books and reading up on all the articles you can find online. Researching about cars also means going into a car dealership and taking your vehicle of choice for a test drive.

    The best thing to remember is that, when buying a car, especially if it’s your first car, you must prioritize what you need instead of dreaming and latching on to an impractical vehicle. Focusing on what you need and want keeps your car payments lower and helps reduce other ownership costs, like routine maintenance, fuel expenses, and repairs. 

  2. Clear financial goals
    Purchasing a car entails a financial responsibility. Suppose you’re the type of person who is responsible for their money. In that case, you probably have a financial goal or things that you’re saving up for, such as an emergency fund or retirement fund—including a certain amount of money you’ve saved up for your chosen vehicle’s down payment.

    However, financing a new car is not a decision made overnight. This takes will, determination, and patience. So, if you don’t have an emergency fund or any savings for that matter, then it might be best to build one first.

  3. Sufficient income
    Car payments can be hefty, and you don’t want to be living from paycheck to paycheck once you get one. Before purchasing a car, ensure that you have the means and do not bite more than what you can chew. If you’re unsure about what you can pay out of pocket each month, you’re going to have trouble in the future.

    To score lower monthly payments, try to make the largest downpayment you can comfortably afford.

  4. No excessive amount of debt
    If you’re someone who cannot meet their financial obligations, that is an indication you shouldn’t invest in a vehicle just yet. Instead, focus on the lowest debt you have and try to pay that off first. Once you have a stable budget and extra money to afford a car, then you can seriously consider the big purchase.

  5. Knowledge of financing options
    If you can purchase your car outright, you might want to look into financing options to support the purchase. Shopping for loans before going car hunting might be odd, but it’ll give you a better idea of what type of auto loan you might need. Asialink Finance offers the best auto loan in the Philippines, providing financial assistance for different cars, trucks, and any other vehicle you might need. 

  6. Consider buying 2nd hand
    If you can, try to compare prices across multiple dealerships to ensure that you get the most bang for your buck.

    However, if you’re someone who’s looking for functionality, you might want to consider buying a 2nd hand car. They’re cheaper, and more importantly, they can still get the job done. Contact the nearest car dealership branch to know the best offers in town.

  7. A good credit score
    Having a solid credit score is crucial to your car budget because it directly affects your interest rates, especially when financing your first vehicle.

    If you don’t have a good credit score, be wary of salespeople who may try to talk you into paying for a longer time. You’ll end up paying more interest over the payment term. This can negatively impact your finances big time.

Think Before You Buy It

While buying your first car might be an exciting time in your adult life, it can also mean a huge responsibility you’re putting on your shoulder, so make sure that you’re ready to take on the challenge.

Asialink Finance is one of the leading finance companies that offer an online loan in the Philippines for a wide array of convenient and accessible loans with competitive interest rates. So, apply for a car loan today!

Gab Doromal