Like all other financial decisions, purchasing a vehicle is a personal choice, unique to your financial situation. There are a variety of expenses that come with vehicle ownership so shopping below your budget ceiling is the objective of your mission. As a service member, you know the first stage to every mission  is to survey the landscape and gather the intel you need. Apply this strategy to purchasing a car, so when you're ready to buy you'll get the best deal possible.

 

The great news is, whatever your budget, there's a vehicle out there for you. Financing your purchase will help build your credit history and allow you to plan for expenses by paying off the car over time.

 

Decide what you're comfortable spending

Start off your search by letting your budget drive your selection and only look at cars in your spending range. Experts advise spending 15 percent of your gross pay on your total vehicle purchase. This includes taxes, titling costs and registration fees so you'll want to choose a vehicle with a sticker price below your budget ceiling.

Or, if you previously had an auto loan and already know a comfortable monthly payment that fits your budget, you can figure out the purchase price you can afford based on the loan term and interest rate.

 

Once you've decided your budget, it's time to evaluate how much financing you need. It's wise to plan for an initial down payment. For example, if you purchase a $25,000 car and you put $5,000 down, the total amount that you'll need to borrow is $20,000. The more money you put toward your down payment, the less you'll spend on interest over the life of the auto loan.

Online tools like the Car Affordability Calculator will help you run the numbers so you know what you can afford based on your down payment, your trade-in value (if you're trading in a vehicle) and what special deals and rebates are available.

The costs of car ownership should also be considered when you determine what you can afford. Maintenance is always a concern for car owners, because no one can predict when you will need a repair. A recent study from Bankrate shows that the average cost of car repairs is $354 a year. Deciding on whether to buy new or used will determine how much you should budget. Newer vehicles typically have less mechanical issues and many problems may be covered under your vehicle's warranty. If you're looking to purchase a luxury vehicle, you should budget more for repairs and regular maintenance like tires and higher quality gasoline.

Other costs of ownership include depreciation, meaning your vehicle's cost decreases the longer you own it. Fuel, loan interest, insurance, taxes and repairs should all be considered as well. There are ways to mitigate these costs, like purchasing a more fuel efficient vehicle to lower fuel costs, or making a larger down payment to reduce the amount you pay in interest on your auto loan.

 

Find the right vehicle for you

Always do your research before going to purchase a vehicle. There's a variety of online resources that'll help you help price out the car and look at features without the pressure of being at a dealership.

Deciding between new and used

You have the choice between both new and used vehicles. It may be tempting to save a few bucks upfront buy purchasing used, but potential repair costs could eliminate those savings. You don't want to get stuck spending more in the long run because a vehicle wasn't well maintained by the previous owner. If you decide a used vehicle is the right choice for you, consider purchasing one that is only a few model years old. That way, you'll have the most recent features and the vehicle won't have the wear and tear of an older used car.

Choosing the best type of vehicle for your lifestyle

A vehicle is a big investment, so choosing the right kind of vehicle for your lifestyle is crucial. If your daily commute is long and you don't have a family to drive around, a larger SUV might not suit your needs. The size of the vehicle and fuel efficiency are two factors worth considering. Consider your five year plan when choosing your vehicle so you'll have exactly what you need for how and where you drive. 

Go to the dealer, test drive and buy

Go to your local dealer armed with the info you need once you've narrowed the field of vehicle models. You may want to test drive a few to find the perfect fit with all the features you need. Once you've settled on the perfect vehicle, it's time to talk financing.

Get in the fast lane with a pre-approval

With an auto loan pre-approval, you can shop with confidence. By getting pre-approved by a lender, you won't have to rely on dealer financing to seal the deal. You may ever get lower interest rates on your loan. Your dealer may offer you financing options anyways, but if the rates or terms aren't as desirable, it won't impact your ability to purchase the vehicle of your dreams. This puts you in a much better position to negotiate.

Negotiation isn't the only way to get the best price on your vehicle. You might not be able to impact the loan terms or interest rate, but the purchase price probably has some wiggle room. Navy Federal's Auto Buying Program can help you get the best deal by doing the heavy lifting for you! All you have to do is enter the vehicle information and your location, and you'll get access to established prices from dealerships in your area.

If you're currently deployed overseas or are looking to purchase a vehicle overseas, Navy Federal's Overseas Auto Buying Program will help you get a pre-negotiated price and coordinate convenient delivery overseas.

Once you've driven off in your great new ride, don't forget about some new-car housekeeping. Start by calling your insurance agent and check off the boxes on the new car owner's checklist.