working out your budget
Before even working out what car you want and where to buy it from, you’ll need to think about what you can reasonably afford.
For many people, affordability means working out what you can afford each month. Rather than paying in one lump sum, buying a car on finance can help you spread to cost of your vehicle over a number of years. So if you’re looking to take out finance, here are some pointers to get you started…
Take time to work out what your realistic income and outgoings are each month. If you are already paying for a car, assess how the monthly payment is going and whether you want to increase or decrease that budget. Buying and running a car is a long-term commitment so, give some thought to your plans for the coming years. Will your commuting increase/decrease? Might your family size grow?
Next, assess the running costs associated with a car;
- Fuel Costs
- A Budget for Service & Repair
- Tyres – some can be very pricey
- A future budget to extend a warranty
- Road tax
- Parking costs
- Road tolls/fees if appropriate
Top Tip – Consider keeping the budget for your car purchase and running costs separate. It may sound obvious, but when you’re searching for the car online you’ll want to filter by the monthly cost of the car alone, then consider your running costs on top of that.
Always give yourself some wriggle-room when working out your budget and don’t over-commit yourself. Make sure you have options if something in your life changes such as you job situation. For example, have a backup plan just in case you have a sudden, unforeseen change to your circumstances or income. Think about whether you have savings to rely on, or whether a friend or family member could lend you money. Maybe even have a few months’ worth of payments squirrelled away to keep you ticking over while you resolve the situation. If you find yourself unable to pay, you can also call your lender to discuss options if your circumstances have changed.
What Can I Buy for My Budget?
With your budget in mind, you can start searching for cars on finance using our filters. You can set the monthly budget and how long you’d like the agreement to last.
You can also use our decision in principle tool to see whether you would be eligible for car finance from MotoNovo. This is a soft search, so it won’t affect your credit score. Click here for more!