How to Buy a Car on a Budget


Table of Contents

Most folks will need several years to recoup the cost of a new car.

More than just the initial outlay for the vehicle, ongoing expenses like lease or loan payments, insurance, gas, and maintenance can quickly eat away at your monthly budget if you aren’t prepared.

How to Buy a Car on a Budget

If you’re in the market for a vehicle but have a limited budget, it’s in your best interest to prepare in advance and investigate cost-cutting measures. Specifically, you should think about the following Car Buying Guide before making an investment:

1. Timing Is Everything

In many cases, dealers and salespeople are expected to reach certain targets. If you can, time your car purchase for the last day of the month to maximize this benefit.

When salespeople need your business to meet their monthly quotas, they may be more amenable to haggling.

Automobile shopping in inclement weather is one option worth considering. Nobody likes to go outside and walk around a car lot on a cold, snowy day or a dismal rainy evening.

The lack of consumers could also work in your favor, as salespeople might be more open to bargaining with you and discussing details like a thorough comparison of plug valve vs. globe valve used in the engine.

Compared to the weekend, fewer clients will be at the dealership if you go car shopping in the middle of the week. Consider doing your automobile shopping this summer, as the warmer weather prompts retailers to reduce the cost of last year’s models.

2. Don’t Get The Upgraded Version On Offers

A dealer will try to upsell you on more than just convenience features like electric windows, the best camera for live streaming music attached on the dashboard, music system, and a sunroof. Often, dealers will try to upsell you on protection plans that aren’t worth the money you pay for them and are just pure profit for the dealership.

VIN etching, fabric protection using a mix of compression vs. injection molding techniques, and extended warranties are typically unnecessary. There are always exceptions to any rule, but if you truly need one of these products, you can probably locate it for less money through a third-party dealer with a little digging.

3. Plan To Trade In Your Old Car? Think Again

Having someone else take care of the headache of selling your old car is why most individuals opt to trade it in. It’s best to think twice before turning over the keys to the dealer if you want to maximize the value of your vehicle.

The primary focus of every dealership is, of course, to maximize profits. They have to get your car at a steep discount so they can put a big markup on it and earn a profit.

4. Get Ready To Shell Out Some Dough Up Front

When purchasing a vehicle, you will be subject to numerous additional costs, such as government levies, state and local fees, and processing and title fees. If any of these are part of your financing, it is in your best advantage to pay as much of them upfront as you can.

Get a detailed breakdown of these costs to see which ones are necessary and which are only added for convenience (and pure profit for the dealer).

Truth in Lending Act (Regulation Z) mandates that the dealer provide you the option to pay in cash or accept financing for the entire amount.

In this case, everything from the purchase price to the interest rate and the length of time borrowers have to pay back their loans is specified. If you look at all of these factors, you should have a good idea of the final cost.

5. Take Your Time Reading Through Any Legal Document

While this may seem self-evident, many people really overlook it. Consider carefully whether or not you really need something before making a purchase.

You can take this time to carefully review the contract and determine whether or not the terms and conditions are acceptable, as well as whether or not the monthly payments are feasible.

6. Renting Should Be Carefully Considered

Leasing could seem like a good idea at first. Your monthly payment for a brand-new car will be less than it would be with a personal loan, and in a few years, you may trade it in for something even better.

However, you should be aware that leasing comes with some drawbacks.

You won’t have any legal right to sell or modify the vehicle because you won’t own it. As for how many miles you can drive it, that figure will be capped as well: Most leases have an annual mileage limit, typically between 12,000 and 15,000.

Furthermore, if you suddenly cannot make the lease payments, you should consider buying a car instead of terminating your lease.


Don’t sign anything until you’ve had a chance to think it over, despite the dealer’s best efforts to hurry you. Allowing your feelings to influence your decision could result in a purchase you come to regret.

You are already on a budget so overlooking anything heavy on the pocket might not leave you alone soon.


Please enter your comment!
Please enter your name here