Imagine wearing the same clothes every day; no matter where you go or what you do, you're wearing that same suit, flannel jacket or leather pants. If you had one week to choose that outfit, you'd probably spend exactly 168 hours thinking about what defines you as a person, what you do every day and how you want the world to see you. Buying a car requires an investment not only in cash, but in time and energy spent examining who you really are.
Examine your short- and long-term budget. At the end of the day, what you can have is a lot more relevant than what you want. If buying a car were a chemical reaction, the limiting element would be "Isotope Cash." Look at your monthly budget, subtract all of your current expenses, divide by two and you've got the car payment. Example: $4,000 monthly income minus $3,300 expenses equals $700. $700 divided by 2 equals $350 -- the maximum payment. This little economic tip will serve you well as a guide for vehicle costs including financing, insurance costs and CO2 emissions taxation (for those in Europe).
Count your children and significant other, then decide whether you can justify buying that Caterham 7 roadster. Even if you've got another car in the household, either that one or your new car is eventually going to break down. You're going to be in trouble if you buy an SRT-10 Ram, it starts to rain and you've got to get your spouse and three kids to Chuck E Cheese by 6 p.m.
Be honest with yourself as to how you're going to use the vehicle. This is where most car buyers lose it, where the heart takes over the brain's allotment of oxygen and tells the buyer to purchase something that he'll later regret buying. That sport/utility vehicle may make you feel like bullet-proof Chuck Norris with laser eyes, but you're not taking it off-road in Manhattan. A Ferrari may do 217 mph, but --- face it --- you may not have the experience to handle anything over 150 mph. Oh, and driving that fast is illegal, which is bad. Choose based upon what's realistic and practical for you on a daily basis.
Ignore everything you read in Step 3, don your favorite hiking boots or Corinthian leather racing gloves and buy what makes you happy. At the end of the day, your car says as much about you as your clothes and how you speak and act. So the car of your dreams is slightly less practical than it could be; all that means is that you as a person aren't completely practical, and there's nothing wrong with that. Buy what you can afford, what will suffice in case of emergency and what will suffice for your daily needs. But above all else, spend your hard-earned cash on what makes you happy.
