Buying and owning a vehicle is no longer as difficult as it was before because there are already a lot of good offers from different dealers. You can have a brand-new car financed by the dealer itself, the bank, or private companies. Same goes when you opt to buy a second hand car for sale; you can pay it in cash or on an installment basis through financing.
Second-hand vehicles are always the best ones to go for if you are tight on the budget, or if adding another car to use when your first car is affected by the number coding—a backup car for that matter. Whatever your reason might be, it is always best to have a fixed budget in mind. This way, you'll have better financial plans and management.
But, what is the smartest way to determine how much you should allot for a second-hand vehicle or in this case, a used Toyota car? Here are some tips for you:
It is said that a person would spend approximately 20% of his or her salary on transportation. Since your goal for buying a car is to save on transportation, and you have other overhead expenses such as gas, you should allocate at most 10% of your monthly salary for the monthly amortization of your car.
On the other hand, if you want to pay the used Toyota Altis for sale in cash, you can also follow the 10-20 rule. However, what you would do is take 20% off of your annual income, and that is the suggested budget for buying your car.
This might be too low for some, especially those who do not earn that much, so it is advisable to go for financing, and use the 20% as the down payment budget.
As surprising as it may sound, yes, you can have a car loan approved prior to finding a second-hand car.
Mostly, this is allowed by private financing companies. The idea here is that you already have a pre-approved amount, which you can consider as a budget. Thus, you can easily narrow down your search.
Most definitely, you have other monthly expenses such as utility bills and food. Keep these things in mind and compute accordingly and deduct this from your monthly income.
Likewise, if you have other debts to pay, it is always wise to allot at least 36% of your salary for paying those, unless, you are already paying a particular amount per month.
Since every person has a different monthly and annual income, the budget for buying a pre-owned vehicle will be different for each one. Similarly, each individual has different expenditures per month.
With that being said, it is recommended to seek the help of an affordability calculator available online. This will help you compute the suggested amount you can spend on monthly amortization or total cash budget for that Toyota Altis you are interested in.
Another option is the auto-loan calculators found on bank websites. These calculators will already include the interest rates, so you will have a better clue if the budget you plan to spend is ideal or not. As such, you can adjust accordingly.
The grand take-home advice you can take here is that your budget for a used model from Toyota Philippines will solely depend on your available, stable income minus your expected monthly expenses. It is always wise to make sure you have a remaining budget to make sure you normally live while paying for your car's monthly amortization or when you hand over the cash to the car seller.
Once you have figured out that amount, feel free to check the wide range of used cars available on the market listed here on Philkotse.com, by private owners and certified car dealers. Hope you drive home your car the soonest!