How Do The Frugal Purchase A Car?

The subject today has multiple questions and those questions are: "I need a new car. How much should i spend on a car? And. Should i pay cash for the car or finance the car?
The simple answer is: Do not finance a car. Pay cash for the car. Do not buy a brand new car unless you have the financial means to do so. Cars lose 15-20% of their value a year. That means if you pay $40k for a brand new car it will be worth $33200 the minute you drive it off the lot. So $6800 of the $40,ooo you paid for the car will vanish into thin air the day you drive the car off the lot, minutes after purchasing the vehicle. Cars are a depreciating asset and therefore are not an investment unlesssss you own an automobile racing team and need to purchase a new race car. Then that new race car could potentially be an investment.
Purchase a well taken care of used car from a trusted dealership or individual seller.
Do not spend too much money on a car.When paying cash for a car, make sure you do not dip into your emergency savings. You should keep 6-12 months of living expenses in your savings account at all time. Whatever money is excess over that emergency balance is the amount you are free to spend on a car.
Just remember 98% of all cars are depreciating assets so do not sink too much money into them because you will not get it back.
Now if you are in a situation where you must have a car and you do not have the cash to purchase a car then your only other option would be to finance a car. When financing a car make sure that it fits into your budget and that the monthly payment does not equate to more than 10% of your take home income. Also, don't finance the car for more than 5 years and try to pay off the car before the five years are up.
Lastly, if you are in the position to where you have to finance a car you still want to buy used and not new so that you are not overpaying for that vehicle.
That is the simple answer.
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