How much you can afford, your finances on Purchase of a Vehicles

Step 1: Lets begin with considering how much you can afford. Either total price or monthly payments. However never confuse these as being separate items, because what ever amount you pay still comes out of the same pocket. Like most people it has been awhile since you have done any sort of shopping for a vehicle. Establishing a budget for your new purchase is the most important and safest way to stay out of trouble. I suggest you begin with a simple calculation of your monthly bills as a separate consideration. Make sure you review your check register, credit card statements and insurance payments. Just to make it easy lets write down every expense from the first bill you pay every month to the last bill you pay. Your clothing allowance, meals, hobbies, pet supplies, including the cost of your bad habits? Once you have done this important step, add everything up and get a total of the expenses. Now lets total your monthly NET income. Subtract your monthly expenses from your income and the results of this First important step have been defined.

Now lets discuss putting aside a bit more from your spending money, towards your new car insurance payment. Because the lender will require the collateral for your new car loan to be safe and sound. Never allow the dealer to sell you car insurance, the cost will be often times 100% more then what you can do yourself. Most importantly never allow your lender to place ( VSI ) insurance on your vehicle. VSI means: Vendor supplied Insurance. This is to protect the lenders collateral and only, the vehicle you just purchased from potential loss. VSI does not cover liability or property damage. Bear in mind (VSI) is added to your car loan and bears interest as an additional cost to you. This additional cost may well add nearly another 50% to the initial cost or amount of your loan. Taking into consideration all that we have discussed now your ready to go to step 2. which we will discuss in my next posting. I'll give you an idea where to begin and prepare yourself in advance. It deals with the make model, type of vehicle, New, Used, lease or purchase of your next vehicle. Good luck and make sure you review all that we have discussed....... Going back over things will insure successful results and undoubtedly will be the fist step to saving you hundreds if not thousands of dollars.