Why Increasing Your Car Budget Will Save You Money Long Term!

Regent Finance Car Finance Blog

You’re ready to buy a vehicle. How exciting! The first thing you do is establish a budget. Based on that budget, you do your research to establish what year, brand, and model you can afford. You may even enquire about finance to see whether you’re eligible to borrow up to your budgeted amount.

Upon further research, you realise that your budgeted amount restricts you to basic features and higher-kilometre cars.

So, what is the most financially sound decision? Stick to your budget and buy a higher-kilometre vehicle with basic features OR spend/borrow more so you can buy a newer and lower-kilometre car with more features. In my experience, the latter almost always comes out on top (there are some exceptions). Why? Buying a higher-kilometre car increases your chance of running into expensive mechanical problems down the track. Secondly, you may be dissatisfied with the limited features which will increase your car turnover rate costing you more time and money. Lastly, your car will become less desirable as it approaches its higher-kilometre range which will make re-sale difficult and result in a less than desirable sale price.

Extending your budget may be more affordable when using finance as it will result in a slight increase in your repayments per month. This will mitigate the upfront cost incurred when purchasing your desired vehicle. Let’s take the following example:


Hi James,

I’ve found a car – it’s a 2012 Toyota RAV 4 Cruiser manual with 130,000 km for $25k. I would have preferred a later model in automatic with fewer kilometres, but my budget restricts me. I guess this will do for now! I can always change my car over next year as I’m being promoted.

Thanks, Liam Hird


Hi Liam,

Have you thought about increasing your budget to $30k? The difference in your repayments would only be $20 a week. This would allow you to buy a later model Toyota RAV 4 Cruiser with lower kilometre’s and in automatic! For example, I can see a 2016 Toyota RAV 4 Cruiser Auto AWD with 80,000 km for $29,500. Spending an extra $20 a week (equivalent to one cocktail) will be beneficial to you in the long run for the following reasons:

  1.   You will avoid car turnover costs – stamp duty registration etc. Reduce the likelihood of expensive mechanical repairs as you are buying a newer car with fewer kilometres.
  2.   Increase desirability of your car when you choose to sell saving you time and money.
  3.   You will have the pleasure and satisfaction of driving a car that ticks all your boxes.

Let me know what you think!

Thanks, James Seit


Hi James,

That makes complete sense. I didn’t realise how minimal the difference in repayments would be by increasing my borrowing amount by $5k.

Let’s go ahead with that! A $30k purchase price will broaden my options and allow me to purchase a car that satisfies all my needs.

Thanks, Liam Hird


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