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How to make buying a used EV as affordable as possible

Electric vehicle prices are now reducing as they enter the second-hand market, but how do you make them as affordable as possible? Here are six tips for managing the payments for your first electric car.

Before embarking on the process of buying your first car, there are a few things that you should consider doing with your finances. For example, you should know how much you can afford to spend before even setting foot into a dealership. Then, assess your monthly expenditures: how much comes in versus how much goes out? 

The most vital considerations include all the fixed and variable costs and projections for how additional expenses may affect you in the future. 

Weighing up all these factors can be overwhelming, so CarMoney is only too happy to help you plan for your financial life with these tips.

Tip #1 – Prioritising Essential Costs

When budgeting for a used car, necessary expenses should come first. These include:

  • Rent 
  • Utilities 
  • Food 
  • Savings

Regarding monthly expenditures, especially for car payments, the basics need to be covered first. Ensure that your essential financial needs are fully catered for, and don’t put pressure on the other facets of your life. 

Also, saving a certain percentage of your income for emergencies will help to protect you from the blow of unpredictable situations such as car repairs or illness.

Tip #2 – Researching Used Car Financing Options

Used car financing is a very important consideration when looking for a car; after all, there are many ways to finance a car. The monthly payments, loan terms, and interest rates may differ from one lender to the other. 

So, it’s advisable to look at the offers by online lenders, banks, and credit unions to identify the right offer for you. Consider taking pre-approved loans to know how much you are eligible for and what interest rates apply. These careful assessments will also help you when bargaining with dealers, as you’ll be well-informed and harder to misguide.

Tip #3 – Calculating Total Ownership Costs

Car ownership entails much more than the monthly instalment price. The insurance cost, maintenance, fuelling, and registration fees should also be considered. 

Think about getting insurance quotes before buying a given car, bearing in mind that insurance premiums depend on the brand, model, and your record as a driver. It’s wise to find out how much it would cost you to maintain the car you’re interested in, too. 

Include these costs in your planning and budgeting to come up with a fair projection for the total cost of owning the car. This way, you’ll make your final decision on the foundations of careful considerations and a more realistic long-term monthly amount.

Tip #4 – Saving for a Down Payment

A large portion of the car price can cut your monthly instalments and the amount of interest you will be charged in the long run. We recommended setting aside between 10-20% of the car’s price in savings. 

If you pay a larger down payment, you will pay less each month, and chances are you’ll get better loan conditions. If paying for a down payment seems overwhelming, then look at the possibility of reducing unnecessary expenses. You could also get creative and look for a second source of income to help cushion your expenses and future projections.

Tip #5 – Negotiating the Best Deal

When considering a purchase, don’t hesitate to haggle over the terms of the loan and the price of the car. Sellers usually have room to negotiate, and getting a lower price for the car means getting better value for your money. 

Use the information we’ve provided on used car financing and pre-approval offers to bolster your bargaining power. Just remember that the key is to strike a balance between the monthly payment and the loan length.

Tip #6 – Planning for Future Costs

Budgeting for unseen future expenses makes all the difference in the art of responsible financing. Think about worn-out tyres, brakes that need servicing, and many more general expenses. Save for these future expenses is possible, and takes the discipline of minimising unnecessary spending. 

You should also try to put aside a small amount of money each month. Periodic reviews of your budget and making necessary changes where required will set you up for a healthier and more sustainable financial status.

Budgeting for Your First Car – Your Takeaways

Purchasing your first car is one of the most delightful moments you’ll feel in your life, but it remains crucial to think about how the all-important money part of it will work. By weighing up your options and comparing, you’ll be in a position to make the right decision. 

Get to grips with your actual budget, what car financing entails, and the cost of maintaining a used car. Take control and get ahead of factors like determining the non-variable costs that may be incurred. Decisions like saving for a down payment and estimating the costs of future expenses will put you in good stead to make an excellent choice for that first big buy.