Monthly Car Payments (what can you afford)

Dec 29, 2020

Ever wonder exactly how to determine what your monthly car payment should be?

It is a matter of your monthly and annual income and how much of that you can afford to spend.

 

The first thing is to get your budget in check and see how much you are spending vs. bringing in. This will give you a clear picture of where you stand financially before you make any decisions. Also you will have an opportunity to get rid of some expenses and perhaps lessen some others. Since we are nearing the end of the year this is a good as time as any to do some financial housekeeping.

 

Once you get your expenses in order you can then see what you are saving for retirement, college, vacations and all the other things on your list. After all is deducted and you have a final number you can then decide what percentage of your annual and monthly income you would like to spend on a vehicle purchase.

 

Don’t base a purchase only on the monthly payment and do not go shopping and say I can spend X amount of dollars a month, what can I get. This will not help you and only lead to paying more since you are only concerned about the monthly payment. They can pretty much make the payment what you need it to be with not so nice terms that do not benefit you!! 

 

All the more reason to have a monthly budget and a purchase budget. This way they can both be met to protect your needs and keep you in a vehicle that works for your lifestyle. Don’t forget all the expenses that go into maintaining a vehicle as well because this will effect your bottom line. 

 

Be sure to take the time to thoroughly go over all your finances and work the numbers. Then you will know exactly what you can afford to spend to have a successful + rewarding purchase.  

 

Happy Budgeting!

~Lori
CEO & Founder
TitleKeyCash.com & Girls Guide to Car Buying
Become A Confident Car Buyer!

 

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