Connect with us


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

Recent Posts

Education3 hours ago

New Driver? 5 Things to Consider When Looking for Driving School

When it comes to choosing a driving school, there are many factors to consider. Not all driving schools are created...

Home Improvement1 day ago

Landscape Irrigation Systems: The Basics

If you’re a homeowner, you know that keeping your lawn and landscaping looking nice can be a lot of work....

Travel2 days ago

5 Things to Look for in Luxury Hotels

When it comes to luxury hotels, there is a lot to look out for. Here are five key things that...

Home Improvement1 week ago

Is There a Difference Between Commercial and Residential Concrete?

If you’re a contractor, you know that concrete is a versatile construction material. But did you know that there are...

Law2 weeks ago

5 Tips to Find the Right Litigation Firm

When it comes to selecting the right litigation firm for your legal needs, choosing wisely is of utmost importance. It’s...

google review google review
General3 weeks ago

Amazing Reason To Embed Google Reviews Widget on Wix

Offering a value is not enough. To survive in the industry, you must market your business in the trustable way...

Lifestyle3 weeks ago

3 Ways To Take Control Of Your Finances in 2023

It can be so overwhelming trying to take control of your finances, as it can be difficult to know where...

Business3 weeks ago

How to market your watch brand?

The luxury watch market has always been a lucrative business, and in 2023 it’s only going to get bigger. Obviously,...

Lifestyle3 weeks ago

How To Keep Your New Year’s Resolutions

Do you always have trouble keeping up with your New Year’s Resolutions? Start 2023 off on the right foot with...

Business3 weeks ago

What Is Stick Welding And When It Is Used

Stick welding, which is also known as shielded metal arc welding or SMAW, is one of the most common types...

Home Improvement4 weeks ago

5 Maintenance Tips For Your Septic Tank

If you rely on a septic tank, you know how important it is to you and your family. Yet like...

How banks are using AI How banks are using AI
Finance1 month ago

How Banks Are Using AI to improve Their Services?

Almost every industry, including banking and finance, has been significantly affected by artificial intelligence. The industry of banking and finance...

Home Improvement1 month ago

How to Prevent Your Drains from Getting Clogged

A clogged drain might not seem like a big problem to deal with, but that plumbing issue could quickly spiral...

Home Improvement1 month ago

Things you need to do and think about before the renovation project

If you plan on renovating your home anytime soon, there are certain things you should check of your list before...

Health1 month ago

3 Things You Need To Be Doing To Look After Your Teeth

Many people don’t prioritise looking after their teeth, however it is so important as we only get one adult set...