So you’re thinking about purchasing a new car. That’s great! A new car can be a big morale boost for you and your family and large purchases like that are a great way to help stimulate the economy. Congratulations. Of course, if you’re thinking about buying a new car because your old one just broke down and you need transportation to work, then the sentiment is likely a bit different. Urgency can often be the deciding factor in such things. Unfortunately if you need a car immediately, you probably haven’t had time to plan out this purchase. If you are lucky enough to have time to plan, though, there are a few things you should consider.

First, you need to figure out when you want to make this purchase. Maybe you like to have a new car every couple years as many people do. Maybe you have a child that’s turning 16 in the next year or two and want to surprise them with a vehicle of their own. Whatever your motivation, you need to be able to set a time-frame for this goal. Once you know when this purchase is going to take place, you can account for inflation. This means accounting for the fact that everything rises in price over time. Generally, this is easily calculated by adding four or five percent to the current cost of the item you’re looking to buy – in this case, your new car. Finally, you need to budget in the savings for it. Hopefully, you already have a savings plan in place, which will make it easy to simply adjust your numbers and start siphoning a small amount each month into a mini savings fund you set up just for this purpose.

The hardest part of planning for a purchase like this is setting the final amount. Sure, inflation is easy to calculate for, but only if you have a base number already set. You can expect to pay about $30,000 on average for a new car in 2010. Unfortunately, that puts new cars somewhat outside the price range of most American families without some kind of financial assistance. This usually means applying for a car loan to cover the difference between the cost of the car and what you’ve managed to save up as a down payment. If you decide to go with a loan, look for as low an interest rate as possible and as short a term as you can handle without the payments going through the roof. Remember, paying a little extra each month can save you massive amounts of money over the course of the loan.

So while a new car is certainly a major buy, it doesn’t have to be as stressful as it may seem at first. With a little planning and some forethought, it’s easy to be prepared for large purchases like this. So long as you know it’s coming, you shouldn’t have any problems. So, once again, congratulations on deciding to make this excellent purchase.