Working hard, saving up, and handing over a check for a new or new-to-you car is easier said than done. However, there are ways to set yourself up for success when it comes to big purchases like vehicles.
“Let’s be honest, money can be stressful,” says Charlotte Nemec, President and CEO of Canopy Credit Union.
The first step toward a successful vehicle purchase is understanding your finances thoroughly.
“Doing your homework ahead of time, understanding your budget, understanding how much you can afford, understanding you might need to be flexible with the kind of vehicle that you’re getting,” Nemec advises.
Knowing exactly how much you make every month, your fixed costs, and what you need to put away each month to save towards your goal is important. This financial clarity helps establish a foundation for making informed decisions about what you can truly afford.
Once you understand your financial situation, the next step is using that information to set yourself a realistic goal.
“I’m looking to buy in the next 30 days. What are rates today? How much can I afford today? And take that advice seriously,” Nemec explains. She adds that this preparation allows you to “go into it with a little less emotion” when you’re at the car lot or buying from a third party.
The economic landscape is constantly shifting, which means your purchasing power may change over time.
With the changing economic environment, what you may be able to afford could change within the next few months, so being realistic and flexible and continuing to monitor your finances is important.
Perhaps the most important takeaway is the need for a comprehensive financial strategy before making a major purchase like a vehicle.
“We’ve all seen economic downturns. We’ve all seen economic prosperity. When it comes to the broader economic conditions surrounding us, so let’s just make a game plan. That’s what I think is most important thing and what I would tell my own daughter and what I would tell my own parents,” Nemec concludes.
By approaching vehicle purchases with careful planning rather than emotional decision-making, consumers can make choices that align with their long-term financial health.
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