Do You Have Enough Saved for a Used Car?
How Much Should You Spend on a Used Car?
Budgeting is one of the most overlooked tasks in daily life, but it’s arguably even more overlooked when it comes to buying a vehicle. Modern automobiles are incredible and it’s easy to let one’s eyes become bigger than their wallet. So, how much should you spend on a used car? Unfortunately, there is no single number that will make sense for every Davey Auto Sales customer. There are a couple of things people visiting our facility should think about before they visit our showroom. Let’s take a closer look.
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What is the 10% Rule for Buying a Used Car?
The automotive industry is filled with little tricks and rules of thumb. One of the most common for buying a used car is the 10 percent rule. This means that your goal should be to spend no more than 10 percent of your annual salary on the cost of the vehicle. The challenge comes in that the cost of the vehicle isn’t only the sticker price but also insurance costs. The annual cost of fuel, registration, local fees and maintenance should also be taken into account.
It’s worth noting that the average annual cost of car insurance in Ontario is about $2,300.
Is it Bad to Spend More than 10% of Your Salary on a Used Car?
Everyone at Davey Auto Sales wants to help people find the best deal possible on the best possible vehicle to meet their needs and budget. However, sometimes, the least expensive vehicle on the lot isn’t the best deal. Obviously, used cars, trucks and SUVs that are nearest to the current model year are going to be more expensive.
Newer pre-owned vehicles have fewer kilometres on the odometer and have a lower overall likelihood of hidden mechanical issues – not to mention more advanced safety features. Sometimes spending a little more upfront on a newer used vehicle can save money in the long run.
If you ever have questions about how to find the best possible deal on a safe and reliable pre-owned car, truck, or SUV, make an appointment with a Davey Auto Sales product expert today.