How to Buy a Car Without Breaking the Bank - Expert Edition Episode 53

Hey everyone, today I want to talk to you about buying a car in today's economy. Right now, buying a car can be really tough because the prices are super high and the interest rates are even higher! I remember when I bought my minivan; I ended up with an 8% interest rate, which is a lot. But don't worry, I have some tips to help you out in this episode. I'll even show you how to use a calculator to figure out how much you can afford without spending too much. And if you're interested, I've got a new course with lots of tools to help you manage your money better. Buying a car can be scary, but I'm here to help you through it.

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TRANSCRIPT:

[00:00:00] Naseema: So I wanted to go over some things you should consider when you're buying a car. First of all, this is like one of the worst times in the last couple of years to buy a car. If you have to buy a car, I feel for you. Interest rates are sky high. These prices of cars are ridiculous. Like I don't even know what's going on.

But yeah, I told you about my psychosis when I bought my minivan when I was pregnant that I don't even drive that I currently have on Toro and with really good credit I still got an eight percent interest rate and. For me, I was like, okay, whatever. That was fine because again, psychosis, but also the price of the car wasn't that much, but for my last couple of cars for my Tesla, the interest rate was 1. 7, that's where my model X and I had a model three and that interest rate was like 2. 4. And I hadn't had an interest rate over 3 percent in years and years and years. So that 8 percent interest rate really was like, oh my God. But I figured I could. Refinance out of it and I keep on going to my credit union, like, when are the rates going to drop?

And they're like, no time soon. Anyway, I feel for you if you have to buy a car, but car buying tips. 1st of all. Have a price range in mind whenever you go to the dealership, they're always going to ask you, how much do you want to pay a month? Don't think about that think about the total amount that you want to spend on a car and you should get pre approved by your credit union.

And you guys know, I don't really mess with bigger banks. I deal primarily with credit unions and recommend that you do too, because they have better raise better relationships, all those kinds of things. So go to your credit union, get a pre approval letter or go to a bank. I think last time I went, like an online bank. I did Capital One last time for my car because I could get a quick Pre approval and then they show me to the dealerships that I didn't even have to deal with all the BS And so I did Capital One last time, but usually I'll go to my credit union and get a pre approval Anyway, so that's why I like have your pre approval In hand before you start shopping for a car, but here are some other hard and fast rules when it comes to Buying a car.

So what car payment can you afford so typically like in order to Not be car broke You need to be spending less like 15 to 20 percent of your take home pay Towards your transportation costs and that includes the car, The gas, insurance and maintenance. Really your car payment should be no more than 10 percent of your take home.

Hey, so if you're bringing home 4, 000 a month, you should be able to afford about 400 a month car payment. But. Again, you want to check like the wiggle room that you have in your budget. I don't know. To me, people that have a 400 car payment nowadays with these, but once you determine how much you can afford on your monthly payment, I have a calculator within my platform that you can use to figure out how much you can spend on a car. The maximum affordable car price will be based on your. Monthly payment, the interest rate on your car loan and the term of your car loan.

Typically, the longer you have a car loan. Now you are able to afford a more expensive car, but I don't recommend having car loans out more than. 4 years, so I'm going to do this calculation. Let's see what how much car we can buy right now. With that totally pay 400 a month. So I'm going to use this calculator 400 a month and down payment.

Let's just say I don't ever put anything down. Typically, so 0 down interest rate of 8%. And let's see, we're going to do 4 years is 48 months, right? How much of a car can I buy?

The max I can spend on a car is about 16, 000. I don't know what kind of car I'm going to get for 16, 000, but I'm just playing around with this and just see if I would have brought this car a couple of years ago when I was getting like a 2. 5 percent interest rate, how much car could I afford? Okay, 18, 000 car.

So I mean like

car Prices are through the roof right now. And so eek I don't know what you can buy for an 18, 000 car. My minivan which is a 2016 Honda Odyssey was about 26, 000 So there you go, but if you're interested in using this calculator or just learning more about how much you can afford I am launching a new course, a new platform, and it's simply at learn.

financiallyintentional. com. Or if you go onto financiallyintentional. com, I have some calculators on there, some tools that you can click on. It will take you to my course. There is a 30 day free trial to go in there and play around to actually get. Your financial wellness score, that'll suggest some courses for you to take.

It is a new platform that I am launching because I am opening back up my membership program a very soon. But right now you can go in there and play around and, I'm interested to know what you think, but hope that was helpful. But if you have to buy a car this year or in the media future, my prayers to you, sending you all my love.

Hey there I’m Naseema

My dream is for everyone to know that financial independence is attainable with a little intentionality. Learn how I can help you finally break the cycle of living paycheck to paycheck.

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