How Much Should Your Car Cost?

If there is one thing that our education system fails to do, that is teaching us how to deal with our finances. Of course, there are plenty of other flaws with it, but this one hits home in every single aspect of our lives. And it shows quite well when we consider purchasing a new car.

If you hit the highway you can see plenty of car transport trucks loaded with all sorts of vehicles. Often these are new cars that cost quite a lot. Chances are you will end up buying a relatively expensive ride as well. But we say relatively, because for someone 20 grand may be a lot, while for a different person even a 100 grand may be cheap.

How can we then determine how much your car should cost? Well, there are several factors you have to take into account. If you are to make an informed decision, you will have to consider all of them carefully. So let’s take a look, shall we?

Your Budget Matters – Figure It Out First

Do you know what happens when you get to a dealership? You may be drawn in by the seemingly low price of a given model, but then end up paying double, because you got tricked into paying for all the extras. This happens more often than you can imagine. And the reason it happens is because you do not set a budget to begin with.

Here is the thing. You have to sit down and be honest with yourself. If you make fifty thousand dollars a year, do you really want a car that costs that much? Of course, you will be paying it off for the next five years, but when you draw the line, you will essentially be working one whole year just to buy a car. Not that wise, is it?

If your job is not dependent on having an expensive vehicle (and it likely isn’t, because it would pay more otherwise), there is no reason to go that high. If you are making just 30 or 35 thousand, it may be worthwhile to check the used market as well. There is nothing wrong with that.

Does Price Mean Quality?

People usually associate higher price with higher quality. This is a sort of snap judgement that almost every person makes. Sadly, marketing specialists have caught onto that, so they will jack up their prices in order to make you think like you are spending to get something of high quality. Well, sometimes that is just not the case.

Do not get fooled into thinking that you should spend more if you want reliability. There are plenty of cheap useful vehicles around that will do the job perfectly and will remain reliable even after several years. Well, they may not be from the luxury brands that will make people think of you in a different way, but if you do not need to build up your personal image like that, you don’t need to spend the additional money.

In the end it truly comes down to this – consider how much you make, and how much the vehicle will help you make. If it is only a passive purchase, or a liability in economics terms, you should not be spending an year of your life to buy it off.