How Much Money Should I Spend On My First Car?

How much money should I have saved before I buy a car?

According to this rule, when buying a car, you should put down at least 20 percent, you should finance the car for no more than 4 years, and you should keep your monthly car payment (including your principal, interest, insurance, and other expenses) at or below 10 percent of your gross (i.e.

pre-tax) monthly income..

How much money should you have saved up for a car?

Establish a realistic timeline Multiply the total cost by 20%. This will show you what 20% of your total vehicle cost will be, and this will also give you an amount to save for your down payment. So, say your dream vehicle is $25,000. Then you should plan to save at least 20%, or $5,000, for a down payment.

How much should you spend on a car for a teenager?

Generally, people are looking to spend under $10,000 on first cars for teens. New cars can be pretty expensive, but for a teenager you don’t need to break the bank to get a good first car. Once you decide on your budget, you can narrow down the makes and models that you and your teenager are most interested in.

What can I do to make money fast?

Ways to Get Fast Cash OnlineSell Something You Own. Selling something online is one of the quickest ways to earn money. … Consign Stuff for Friends and Neighbors. … Get Cash Back on Purchases You Need to Make. … Sell Your Gift Cards. … Offer Freelance Services. … Tutor Online.

Should you buy a 20 year old car?

So a 20 year old car, if it has low mileage and a good record for reliability, could be a safe bet. … If you can do your own maintenance, an older car is an excellent way to save money. 20 years is a bit older than I usually buy them, but there are several this age that I would buy and drive in a heartbeat.

Should I buy a 15 year old car?

Buying an old car can be a disaster most of the time. Even the best cars develop problems as they rack up the miles. … As you can see, even a car less older than 15 years can have so many problems and can give you a major headache.

What is a good mileage for a first car?

Age – brand new cars are often unaffordable for first time car buyers so if you’re buying a second hand car, make sure you check the mileage. Richard recommends looking for a car with an average mileage of 12,000 per year or less, with a good service history and long MOT.

What is the sweet spot for buying a used car?

Saving Money by Buying in the Used-Car ‘Sweet Spot’ There’s a three-year-long “sweet spot” that starts with buying a used car that has already had its initial drop in value and ends with its sale or trade-in before it has another good-size depreciation hit.

Can cars last 300 000 miles?

Ah, the feel of the open road. A person could drive 30,000 miles a year (the average is 15,000) and rack up miles pretty quickly, but someone who drives very little will still see their car age when the interior fades and rubber parts begin to dry. …

What used cars NOT to buy?

30 Used Cars Consumer Reports Gave the ‘Never Buy’ LabelChrysler Town & Country. Chrysler’s new minivan will hopefully rate better than Town & Country. … BMW X5. 2012 BMW X5 | BMW. … Ford Fiesta. Compact cars by Ford had a bad run between 2011 and 2014 | Ford. … Ram 1500. 2015 Ram 1500 | Ram. … Volkswagen Jetta. VW Jetta | Volkswagen. … Cadillac Escalade. … Audi Q7. … Fiat 500.More items…•

What mileage is too high?

Typically, putting 12,000 to 15,000 miles on your car per year is viewed as “average.” A car that is driven more than that is considered high-mileage. With proper maintenance, cars can have a life expectancy of about 200,000 miles.

How much is too much for a car?

Another rule of thumb says that drivers should spend no more than 15% of their monthly take-home pay on car expenses. So under that guideline, if your net pay is $3,500 a month, it’s best to avoid spending more than $525 on car costs.

What is the best age to buy a used car?

So for used car shoppers, purchasing a car that’s two to three years old and driving it for three years results in some of the lowest costs for recent model cars.