How do you know when you can afford a car?

Firstly, if you are asking that question you can’t afford a new one.

There are two things to consider.

  1. Do you have money to pay for it or reliable cash flow to service a loan? Whilst you may be able to afford to buy it, it still doesn’t mean you should.
  2. What else could you do with the money and how useful would that money be in the future if you had more of it?

A good compromise would be to find a car you like and how much it would cost; and then half the price and try and find something you will like in that price bracket.

A shiny piece of metal is nice, but it’s not life changing. Making bad financial choices is however.

Hope that helps.

I’ve written previously about car purchases in Forget the Fiat. Own a Ferrari.

This question and answer originally appeared at Quora.

Do you have your own question about money?

Come and join my FREE private Facebook community where I will help answer your money queries.

I also answer questions asked by people on Quora - they contain some useful money insights.

Mark Underdown

Financial Planner, Small Acorn Money


Improve your prosperity through money tips, lessons, tools and guides.

Sign up today.

You have successfully subscribed. Thank you.

Pin It on Pinterest

Share This