Connect with us

Autos

Can You Really Afford That Car?

You’ve found the perfect car. It has every feature you want, it’s stylish and it has great safety ratings. But, can you afford it? While you may need a new vehicle, the last thing you want is to get in over your head with an expensive car loan. Here are some tips for deciding how much to spend on a vehicle.

Can You Really Afford That Car?

Consider the Down Payment

How much can you afford to spend on a vehicle down payment? The average recommended down payment for a vehicle loan is between 10 and 20 percent of the purchase price. However, depending on your auto loan terms, you may be required to submit a specific down payment rather than choosing how much you want to put down.

Keep in mind that, the more you put down up front, the less you’ll have to repay with interest on the loan. If you don’t yet have much to put down on a vehicle purchase, consider whether you can wait a few months to buy the car and save up for a down payment.

Research Loan Rates

Auto loan rates vary between lenders. Rates can also vary based on your credit score. Knowing the average interest rate that you can expect to pay on an auto loan based on your credit score and other factors will help you determine whether now is the time to purchase a vehicle.

To find the best loan rate, compare offers between a few lenders and learn more about how factors like your credit score and your other debts are affecting the interest rate. A good rule of thumb is to take out a loan for a vehicle that’s below your top budget amount. This will give you a little wiggle room in case other unexpected expenses pop up after you buy the vehicle.

Calculate Taxes and Fees

According to Car Shopping: How to Calculate Affordability, an important part of every car shopping experience is determining the taxes and fees that you would pay on a vehicle.

Taxes and fees vary between states, but they can be fairly expensive, so you’ll need to inquire about what to expect in your state. The last thing that you want is to buy a vehicle that you think is within your budget, only to then find out that the cost of taxes and fees is more than you can afford.

Know Your Budget

Your monthly budget will majorly impact which car you can afford. When calculating your monthly budget, don’t just look at your consistent bills like health insurance, rent and cable. Also calculate your average monthly unexpected costs to gain an accurate idea of how much you spend each month. Compare the amount you spend each month to your income to determine how much remains to pay for a new vehicle. If possible, cut out some of your monthly expenses to make more room for auto loan payments.

Car shopping involves much more than simply finding a vehicle that catches your eye. Rather, make an informed purchase by determining how much you can afford to spend on a new car. Do this by researching loan rates, by calculating the taxes and fees associated with a car purchase in your state and more.

Shayla Ebsen is a freelance writer and editor with more than 10 years of professional writing experience both in the corporate and freelance settings. Learn more about Shayla here.

Continue Reading
Click to comment

Leave a Reply

Your email address will not be published. Required fields are marked *

Recent Posts

3D Rendering Terminology: Guide For Architects to Communicate With CG Artists 3D Rendering Terminology: Guide For Architects to Communicate With CG Artists
Tech7 days ago

3D Rendering Terminology: Guide For Architects to Communicate With CG Artists

When chipping away at a building representation project, a modeler and a 3D delivering worker for hire need to see...

Learn and Become A Professional DevOps Engineer! Learn and Become A Professional DevOps Engineer!
Tech2 weeks ago

Learn and Become A Professional DevOps Engineer!

Have you been having a tough time deciding what you want to do when you grow up? Once your school...

Debunking The Common Myths About Cosmetic Surgery Debunking The Common Myths About Cosmetic Surgery
Health2 weeks ago

Debunking The Common Myths About Cosmetic Surgery

Just a few years back, plastic surgery was thought to be some kind of sorcery or something that existed in...

How to Choose The Right Type Of Flooring For Your New Home How to Choose The Right Type Of Flooring For Your New Home
Home Improvement2 weeks ago

How to Choose The Right Type Of Flooring For Your New Home

Building a house from scratch can be a tedious and stressful process even though you know you are doing something...

3 Ways To Style An Oversized White Shirt This Summer 3 Ways To Style An Oversized White Shirt This Summer
Lifestyle3 weeks ago

3 Ways To Style An Oversized White Shirt This Summer

If there is one staple item you need ready for your summer wardrobe, it’s an oversized white shirt. They are...

5 Tips For Picking The Perfect Wedding Ring 5 Tips For Picking The Perfect Wedding Ring
Lifestyle3 weeks ago

5 Tips For Picking The Perfect Wedding Ring

Your big day is coming up for your wedding day and you set the standards too high with your engagement...

What's That Thing Called? All You Need to Know About Your Car's Lift Struts What's That Thing Called? All You Need to Know About Your Car's Lift Struts
Autos3 weeks ago

What’s That Thing Called? All You Need to Know About Your Car’s Lift Struts

Imagine you’re out for grocery shopping or a weekend outing with family, and you need to load your shopping or...

10 Places to Explore In Ahmedabad Gujarat India 10 Places to Explore In Ahmedabad Gujarat India
Travel3 weeks ago

10 Places to Explore In Ahmedabad Gujarat India

In the state of Gujarat Ahmedabad or Ahmedabad is a significant region and one of the very prominent city areas...

Men’s Top Fashion Trends To Be Following Spring/Summer 2021 Men’s Top Fashion Trends To Be Following Spring/Summer 2021
Lifestyle4 weeks ago

Men’s Top Fashion Trends To Be Following Spring/Summer 2021

With us all being in lockdown on and off for a year, people are starting to get excited for the...

Find Blog Post Ideas Using Google Keyword Planner Find Blog Post Ideas Using Google Keyword Planner
Marketing4 weeks ago

Find Blog Post Ideas Using Google Keyword Planner

Being a successful blogger means that you have to create captivating and original content that will be helpful to your...

Best Vegan Egg Alternatives For Baking Best Vegan Egg Alternatives For Baking
Life Hacks4 weeks ago

Best Vegan Egg Alternatives For Baking

In recent years there has been a dramatic increase in veganism due to its numerous health benefits. People are much...

7 Smart Storage Solutions For A Small Bathroom 7 Smart Storage Solutions For A Small Bathroom
Home Improvement1 month ago

7 Smart Storage Solutions For A Small Bathroom

A small bathroom can be such a nuisance. You never have the space you need and everything seems to be...

What Are The Better Ways Of Building Data Lakes? : The Right Way Is Critical What Are The Better Ways Of Building Data Lakes? : The Right Way Is Critical
Tech1 month ago

What Are The Better Ways Of Building Data Lakes? : The Right Way Is Critical

The pattern is the main period that each enterprise needs to be conscious of if they need to generate greater...

Everything You Need to Think About Before The Road Trip Everything You Need to Think About Before The Road Trip
Autos2 months ago

Everything You Need to Think About Before The Road Trip

Road trips are perhaps the most flexible vacation format: they can be as long or fast, intense or relaxed, planned...

Justice Law In Rural Area: Keep Community Feels Secure Justice Law In Rural Area: Keep Community Feels Secure
Law2 months ago

Justice Law In Rural Area: Keep Community Feels Secure

In order to strive and keep on progressing forward, the judiciary system plays an important role in instituting trust within...

Categories

Archives

Trending