How to plan to buy a car with your partner
With a vehicle, you and your partner can live out car advertising fantasies while zigzagging along picturesque serpentines. But just like every car ad ends with the funding information, you won’t live out that fantasy until you talk about money, too.
Before buying a car with your significant other, be guided by your vehicle budget, how you share financial responsibility, and the type of car you need. How to start.
Start the car conversation over chamomile tea
Even if you look forward to buying a car, investing a lot of money can be stressful. Split the costs with your partner, and now you have to face the fears and differing views of money that two people have.
To hedge relationship stress, you should have an open conversation about this purchase, suggests Marlow Felton, co-author with husband Chris of Couples Money: What Every Couple Should Know About Money and Relationships. But watch out for the timing. “If you are super stressed, have been drinking, are tired or hungry, this is not a good time,” she says. Instead, choose a moment when you are relaxed.
Find out the finances
First, Determine how much car you can afford. Try to spend less than 20% of your monthly household income on the total cost of the vehicle – including car payments, gasoline, insurance, maintenance, and repairs.
When taking out a car loan, plan on 10% for a down payment for a used car and 20% for a new car. When you pay cash for a vehicle, we’ve found that the lowest price for one reliable used car is about $ 2,500. (But remember, with every additional $ 1,000 you spend, you get a newer, nicer vehicle.) However you pay, allow for registration fees, sales tax, and a “documentation fee”.
Working on a car fund
Felton suggests that couples saving for a down payment or a used car create a joint account for that purpose. “A general rule of thumb when saving for large expenses is to separate funds,” she says. “This is not the shoe fund or the vacation fund – it’s the car fund.”
Next, agree on how often and how much each of you will contribute. Felton says making a proportional contribution to your income is a good place to start – for example, you can deposit 10% of each paycheck.
Yes, that probably means that you will bring up different amounts of money. But that shouldn’t matter too much. If you want to get involved in the long term, your money should be split, says Felton.
Discuss what type of car you will need
Now that you’ve got the finances out of the way, it’s up to you to decide what type of car to buy. Start by exploring auto websites like Autotrader or Kelley Blue Book, as well as the Edmunds Compare Cars tool. (See also ours Guide to choosing the right car.)
“Be honest with yourself when separating needs from wants.”
Find out which requirements your vehicle must meet. Does it have to get you to and from work without swallowing fuel? Does it have to match the five little leaguers you want to train? Does it have to cross icy roads?
Be honest with yourself when separating needs from wants. You probably don’t need this automatic parallel parking feature if you live in a cul-de-sac. When a vehicle has everything you need and you still have room in your budget, consider the nice-to-haves.
Of course, you and your significant other may not entirely agree on their needs and wants – but reaching an agreement is an important step. “It can be a test of your relationship,” says Felton.
Your reward if you pass the exam? Excursions on these two-lane mountain roads from car advertising – with an intact budget and intact relationship.