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Deciding how much you can afford to spend on your used car:
Step 1: Create a budget
Create a budget for yourself so you can see exactly what you have and
what you don't have to spend. Creating a budget can save you time and
money because you'll know exactly what you're working with. Your budget
should provide you with the following information:
- What you can afford to spend on a car in total.
- How much money you have for a down payment.
- A monthly payment you can afford.
Step 2: Get a copy of your credit report
This is a very important step. When you go into a car dealership, you
do not want the dealer knowing more about your credit than you do. If
you have your credit report and you know what's on it, you'll know what
they might try to throw at you. A dealer could give you a price on a car
and then call you a few days later and tell you that a bad credit report
is going to cause a rise in the amount they quoted you. If you don't know
you're credit history, you won't be able to fight back against this. Most
credit agencies can get you a copy of you report for $6 - $12 that same
day. Be sure to take it with you when you go to look at you new car and
talk to the dealer. (This step is unnecessary if buying from a private
owner.)
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