| How Much Can You Really Afford to Spend on a | | | | cash from the sale, consider keeping it for a down |
| New Car? | | | | payment on your next new car. Any down payment |
| | | | you make will cut down monthly payments significantly. |
| Are you in the market for a new car? If so, it’s | | | | Leased Car |
| important to figure out what you can afford to spend | | | | If you’re currently leasing a car, you’ll |
| -- before going shopping. By doing some simple math | | | | need to either wait until your lease term expires |
| and evaluating your current situation, you’ll be | | | | – or get out of your lease early. To learn more |
| prepared to shop for a car you want – and can | | | | about getting out of a lease, read “Getting out |
| afford! | | | | Of Your Used Car Lease”. |
| How Much Can You Spend on Monthly Car Payments | | | | And if you have savings or other available cash, this |
| The first thing to figure out is how much you can | | | | may be used as a down payment as well if you |
| afford to spend on monthly car payments. Most | | | | choose to do so. |
| experts argue that you should not spend more than | | | | Car Insurance Costs |
| 20% of your monthly gross income on a car payment. | | | | Insurance costs are another major consideration when |
| In special situations this figure may vary, but as a rule | | | | figuring out how much you can spend on your new |
| for the average adult, sticking to 20% or less of | | | | car. A sports car or a high theft car will likely have a |
| monthly gross will likely be a wise move. | | | | far higher insurance premium than a run-of-the-mill |
| Short Term vs. Long Term Car Loan | | | | sedan. To put this into perspective, remember that two |
| Once you determine a safe figure for monthly car | | | | new cars with sticker prices of $20,000.00 each may |
| payments, you should consider the loan term. | | | | have insurance premiums which vary by as much as |
| Remember that a longer car loan will mean much | | | | 50% - or more! In other words, it’s very |
| more interest paid over time, while a shorter car loan | | | | important to figure out – roughly – how |
| term will mean less interest but higher monthly | | | | much insurance is going to cost for all of the new cars |
| payments. | | | | your interested in. |
| Coming Up with a Down Payment | | | | Car Maintenance Costs |
| And what about your current car, assuming you have | | | | Then there are maintenance costs to consider. Some |
| or had one? | | | | new cars will be far more expensive to repair than |
| Selling Your Current Car | | | | others. Foreign cars, for example, may be quite |
| If you already sold your car you may have some | | | | expensive to repair. However, many of these cars |
| available cash to contribute as a down payment. Any | | | | now come with warranties and free scheduled |
| down payment you make is great as it will cut down | | | | maintenance. New offers like this may actually make |
| on monthly car payments. If you still need to get rid of | | | | cars which used to be expensive to fix, far less |
| your current car, be sure to consider selling your car | | | | expensive than other ‘cheap to fix’ cars! |
| before simply trading it in to the dealer. You can usually | | | | Therefore, the maintenance issue should be evaluated |
| expect much more money from selling your car than | | | | on a car-by-car and offer-by-offer basis, as |
| trading it in. If time is an issue, look for a reputable used | | | | manufacturers and their offers vary significantly. |
| car buyers like Big Bucks Auto™ in New York | | | | After considering these simple factors, you’ll be |
| Tri-State Area. | | | | prepared to go out and shop for a car that truly fits |
| If you already sold your car and have some leftover | | | | the bill, financially speaking. |