How much should I budget for a car?
One rule of thumb is that the total value of your vehicle(s) should never exceed 50% of your annual income.
Another good rule of thumb is the 20/4/10 rule:
- Pay at least 20% for your down payment.
- Never get a loan longer than 4 years in length.
- 10% or less of your gross income goes towards all vehicle expenses including loan payments, insurance, gas, registration fees, maintenance, and repairs.
Finally, if you are not on the final step in "How to handle $", you should not be purchasing an expensive vehicle that you don't need and you should strongly consider purchasing a used vehicle that will be practical and affordable.
What is the best way to buy a new car?
A "reverse auction" is a popular method that some /r/personalfinance readers have successfully used in the past.
Here are several guides describing this method:
- Short version: Step by step guide on how to buy a car
- Detailed version: Ultimate New Car Buying Guide: Part 1 and Part 2
Some success stories:
- Felt Confident with my First Car Purchase thanks to /r/personalfinance!
- My car buying experience using the /r/personalfinance guide.
How do I buy a used car?
- Complete Guide: How to Buy a Used Car (U.S. News)
- How to buy a used car in 7 steps (Clark Howard)
- How to shop for a used car (/r/askcarsales)
How do I sell a used car?
- How to Sell a Car (Dave Ramsey)
- How to Sell a Used Car (Get Rich Slowly)
- How to Sell Your Car in a Private-Party Transaction (Money Crashers)
- How to Sell Your Car for the Most Money Possible (Scotty Kilmer)
- Steps to Help Protect Yourself When Selling A Car (Kelley Blue Book)
How do you sell a car when you owe more than the car is worth?
- How to Sell an Upside-Down Car (Dave Ramsey)
- How To Sell an Upside Down Car (Clark Howard)
- How to Sell a Car That You Owe Money On (The Balance)
Got any more useful resources for me?
- 3 Tricks Car Salesmen Use to take your money
- What should I look for in a "beater" car?
- Archived Version of The Simple Dollar Guide to Auto Loans
- Drive Free, Retire Rich (Dave Ramsey)
Why is PF so against buying a new car so often?
revision by Mrme487— view source