You Save Monthly You must frequently earn more than you spend each month to buy a car. Some people can buy a car cash, but most need a loan. Even if you buy the car cash, you must pay monthly insurance.
You Have Enough Emergency Fund Emergency funds should be set aside alongside normal savings. Most experts recommend saving six months of spending in an emergency fund. Emergency accounts are created in case people lose their employment and require extra income.
You know your budget Before buying an automobile, shoppers should determine their budget. Outright car buyers should determine their budget.
You Have Good Credit Auto loan applicants benefit from strong FICO scores. Your APR is determined by your credit score and other parameters by lenders and dealerships. Good credit scores are 670 to 739, but higher scores mean cheaper rates.
You Met Financial Goals Buying a new car is thrilling, but don't let it interfere with other milestones. It may be wiser to save for a down payment and get a mortgage. Buying a new car may not be as important as becoming a homeowner.