Has the time come to purchase a new car? If so, you may be contemplating what type to purchase. The kind of car you buy will depend on several considerations but is often primarily based on how much of a car payment you can afford. If you are overspending on a car note, you’ll have less to spend on other obligations; utilities, mortgage, daily living expenses, etc. Here are a few considerations to keep in mind when deciding what type of car will fit into your monthly budget.
What type of car payment can you afford?
It is easy to get caught up in sales jargon when buying a car from a dealership. Before you know it, you’ve signed on the dotted line without even realizing how the dollar amount of the monthly car note will affect your budget. How much is your monthly take-home pay? Try to keep the payment around 10 percent of take home pay; for example, an ideal car note for a person bringing home $3,000 monthly would be $300.
How long do you want to be paying on a car?
How long do you want to be paying notes on a car? Some dealerships will finance a car for up to 72 or 84 months. That is six or seven years! The interest on a car financed for this long is money down the drain. A long-term car loan isn’t as great of a deal as it may first seem. By the time you pay off your car, it will have greatly depreciated in value. Try to finance for the shortest term available that you can comfortably afford.
Here is a handy car affordability calculator that may help you find a new car that fits within your monthly budget.
Have you found the perfect car to purchase? If so, please let us know so we can give you an auto insurance quote. It is important to find out how a new car purchase will affect your auto insurance premium. Contact us any time. We are here to help! http://www.gross-ins.com
