Car Buying Advice

How Long Have You Been in Car Shopper Mode?

How Long Have You Been in Car Shopper Mode?

Smart Car Shoppers Want a Good Deal

Getting a good deal is always top of mind for most car shoppers. If you have decided that you are one of those “good deal” shoppers, that’s good news. As Ben Franklin once said, “A penny saved is a penny earned.” So, when are you going to pull the trigger and buy a new car? You have been shopping online automotive sites for months. You have looked at hundreds of pictures of dozens of cars for hours and hours online. Now what??? Like most car shoppers, you are trying to figure out the big two (questions):

1. What’s my real transportation need?

2. What’s my budget?

Define Your Transportation Need

BMWs on a car lot with guy shopping






First things first, what transportation need are you trying to fix. Has the size of your family changed; either the number of members or the physical size? Has the distance you travel in your current car changed? Has the way you use your car changed? Has where you park your car changed? Has the climate that you live in changed? Have your recreational actives demanded a different automotive configuration? Do you want to upgrade the technology in your car? These and many other questions are roaming through your mind as you try to find the right car at the right price. This is why we spend so much time in car shopper mode, because it’s complicated.

Define Your Budget

Next you have to nail down your budget. Car shopper budgets are a combination of what you can afford and what you’re willing to spend. There’s a couple of ways to look at your budget. One way is to look at monthly payments and the other is overall price. If you shop by payment, you have to be really clear on your credit situation. It’s a good idea to both check your credit score and to get pre-approved for a car loan before you go into the dealership. This will take all of the guess work out of punching numbers into a loan calculator.
The financial experts suggest that you spend no more than 12% of your monthly income on a new car. If you make $2500/month that leaves you with a monthly car budget of $250 to $300. You can buy a lot of car with that kind of money. However, the amount of car depends on your credit score. A zero% loan gets you a lot more car than someone who may be credit challenged and has a 13% loan.
Here’s the math: If car shopper (A.) has $300 to spend on a new car and he/she has perfect credit they can buy an $18,000 car. However, if you are car shopper (B.) and you’re credit challenged… that $300 per month will only buy you $13,185.03 worth of car. That can change the features you’re able to get and the size/class of car you buy. This is why figuring your budget just isn’t about how big a monthly payment you can afford, it’s also about how much car can you buy with your money you have.


auto finance approval guy looking up
If you can figure out the big two (questions):

1. What’s my real transportation need?

2. What’s my budget?

You can get out of car shopper mode and move to car owner mode… Good luck!

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