How To Better Budget For Car Loans

 

Buying a car is one of the largest purchases most people make, second only to buying a house. It requires a bit of planning to be sure you are not getting in over your head. Preparing for car loans in Orillia is not hard, but there are a few things that people often overlook.

Don’t forget about insurance

Too many car buyers budget for the car loans but forget about insurance costs. This can be a real problem for a buyer who might be getting into barely affordable payments then has to add insurance premiums on top of that.

An auto loan in Barrie carries requirements for substantial insurance to ensure the lender is protected in case you get into an accident. If you are upgrading from an older car, you may be paying just liability insurance so your new insurance rates will be much higher than you are used to.

Shop around to several auto insurance providers rather than settling on the first one. Even if you are happy with your insurance carrier it still pays to compare. You may be able to negotiate a better premium with your current carrier by showing that you can get coverage elsewhere for less.

Factor in maintenance and other costs

If this is your first car, the cost of operating your car will be another significant hit to your budget. However even if you are upgrading from an older car, you may see a substantial increase in operating costs if you, for example, switch from a small, fuel-efficient car to a large SUV with lower gas mileage.

A good source for operating costs is the American Automobile Association. In their 2007 report, assuming the owner drives 1,000 miles per month, AAA calculated that it would cost $124/month to operate a small sedan and $380/month to drive a four-wheel-drive SUV.

Purchase of a new or used car in Orillia strains many household budgets, and not just from the payments on car loans. Do your homework so you don’t end up in a financial situation you can’t handle.