by Dan Wonders, Transportation Assistance Program Team Leader
Buying a car is never easy. And doing it on a limited budget can be a real challenge, but not impossible. The best option when on a tight budget is to find a reliable and well-maintained used car.
You can finance a car if you have money for a down payment and a decent credit score. If financing is not an option, develop a monthly budget and a savings plan to set aside money over time to pay with cash. Sometimes borrowing money from a family member can be a source of additional funds. And finally, NHCO’s Transportation Assistance program can help, if you qualify.*
Whether you apply to our program or not, here is some advice for any car buyer considering a used or pre-owned vehicle:
- Shop around. Online sites make this easier than ever. Think dealership sites like Baierl.com (a long time supporter of NHCO programs), cars.com or autotrader.com to name a few
- Do your homework. Research the history of the vehicle. CarFax.com and Autocheck.com are good places to start. Determine the vehicle’s current condition. Inform the seller you want your own mechanic to look over the vehicle. There is usually a fee for this. If the seller is resistant, it might be a sign that it’s time to walk away.
- Know your budget and the true purchase cost. Review your finances before you start your car-buying adventure. What are your current outstanding debts? Do you owe on credit cards, student loans, medical bills, personal loans or other creditors?
- Credit check: What is on your credit report? What is your credit score? Banks and other lenders use this information to determine if you can get a loan and how much interest you’ll pay to borrow the money.
- Cash or credit: Car lots advertising that “anyone gets financed” often do so by charging high interest rates and high monthly payments if the purchase includes no money down. Vehicle purchases of this kind can put you in a car. But if your monthly budget is already tight and you can barely make the minimum payment, it’s probably best not to buy the car under these circumstances.
- Other costs. You also need to consider the monthly expense of owning a vehicle. Keeping gas in the tank is number one. But there are also monthly insurance payments, state registration and annual inspection fees. Repairs can crop up at any time, so it’s a good idea to set aside money each month for an emergency repair fund.
Another helpful source of car-buying information is the FTC’s website: https://www.consumer.ftc.gov/articles/0055-buying-used-car
*For additional help and resources call the Transportation Assistance office at (412)408-3830 X3225, or go to nhco.org.