Get a Second Family Car on a Budget

A second car can be an important addition to many households, and while a second car does represent an additional expense, it is still possible to find one on a budget. By evaluating and prioritizing your current expenses to help save you money and finding a discounted or pre-owned vehicle, you can add a second car to your home without straining your budget.

Steps

Finding the Money

1. Create a budget. Take a look at the types of cars you may want for your second vehicle and set an overall price range goal toward which you can work. From there, take a look at your current budget and determine how much you can put away each month toward that goal.
   • Don't forget to include costs such as insurance. Get an estimate for the type of car you are working toward so that you know how much you need to keep it insured and running smoothly.
2. Downsize your current car. Help build your account for your second car by trading in your current vehicle for a less expensive model. If you own your car free and clear, you can put the money directly toward your new vehicle. Otherwise, trade in to reduce your car payments and have more to put toward your second car.
   • Check in the trade in value of your current car by looking online or with a source such as Kelley Blue Book so that you can plan a budget for your trade in.
   • Look at used vehicles to get the most value for your trade-in.
3. Evaluate your budget. Look at your current spending and see where you can make cuts. Check things like utilities, insurance costs, and your grocery budget to see if there are areas where you can make changes and put your savings toward your new vehicle.
   • Look at your insurance policies and see if there are added expenses on your policies that you can reduce or eliminate. For example, consider dropping comprehensive coverage on your auto insurance and instead carrying minimum coverage.
   • Check your phone, cable and internet package to see if you could save money by dropping your cable and transitioning to internet streaming platforms instead, or by dropping a home phone line in favor of mobile phones.
4. Get a loan. You will need a down payment for almost any car, but if you don’t have the money for your second vehicle upfront, consider getting an auto loan. You may be able to work with the bank or directly with the dealer to secure financing for your car.
   • It may be difficult to secure a second auto loan if you have a loan for your current primary vehicle. Consider this option if you own your primary car free and clear.
   • Shop around for quotes from banks as well as from your dealer to help you get the best terms such as lower interest rates.

Finding the Car

1. Buy used. New cars generally depreciate by about 40% in the first five years of ownership. This means that buying a lightly used vehicle a few years older than the current model year could save you nearly half of the original sticker price.
   • Look at buying certified pre-owned from a brand dealership to ensure that the car is well cared-for and comes with some sort of protection after purchase.
   • Check out different makes and models to find the best value for your budget.
2. Try a rental service. Purchasing a car from a car rental company such as Enterprise, Budget, or Avis can get you a low-mileage, well-cared-for vehicle at a reasonable price. Call your local car rental office or check online to see if they are selling off any stock.
   • Ask about an extended test drive, which may allow you to have the car for up to three days to test its performance and have a mechanic inspect it.
   • Shop around multiple companies to get the greatest savings.
3. Look for cars with cosmetic imperfections. Check with dealers to see if they have any stock that has been cosmetically damaged but still fully functional. Light wear from incidents such as hail can knock substantial amounts off of the sticker price.
   • Areas that experience regular hail may have hail sales to offload supply that experienced some cosmetic damage during a storm.
   • Examine a damaged car closely to make sure that the damage is only cosmetic, and does not impact the functionality of the vehicle. Request records of mechanical inspection from the dealership.

Finding Alternatives to a Second Car

1. Try a car sharing service. Services such as Zipcar, Enterprise CarShare, and other car sharing services allow you access to shared cars that you can reserve and drive any time. If you are looking for a second car that will only see occasional use, a car sharing service may be a good alternative.
   • Generally, you pay a small annual membership fee for these services, and then pay per hour or per day when you need the car. Expenses such as gas and mileage are usually included.
   • Cities and college towns generally have a higher availability of overall cars, as well greater distribution in lots around the area.
2. Look at a motorcycle. Motorcycles and scooters are generally cheaper to buy, cheaper to insure, and cheaper to run than cars. Depending upon your needs, a motorcycle or scooter may be a budget-friendly option for transportation.
   • Understand that motorcycles can vary greatly in cost. Look for a small, sturdy bike rather than a luxury brand name to get the most for your money.
   • Know that there will be some upfront costs associated with getting a motorcycle including training and licensing if you do not already have a motorcycle license.
3. Take public transit. If public transportation is available in your area, look at the cost for a monthly or annual transit pass. In many cases, public transportation passes are cheaper than the combined cost of car payments, gas, and insurance.
   • Passes can help you save considerably over paying per ride, as riders can often get unlimited rides for a single fee.

Tips

• Remember that a second car comes with more costs than just the car payment. It means an increase in spending on gas, insurance, registration, inspection, and maintenance, as well.
• Look to make your second car an economy car if possible. Opt for functionality and value over luxury and features.

References

See also

• Deal with the Finance Manager at Car Dealership
• Spend a Tax Refund Wisely
• Buy Cars at Auction
• Buy the Perfect Gift on a Budget
• Buy Then Sell a Car Impounded by the Police
• Compare Used Cars
• Find Out How Much a Car Is Worth
• Buy a Fuel Efficient SUV
• Buy a Used Car Online
• Buy an Alternative Fuel Vehicle

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