How Much Car Can I Afford to Buy?

Posted: Tuesday, October 30th, 2018

Whether you’re shopping for your next car or financing for the first time, one of the first things you should determine is how much can you afford to pay. It seems like a simple question, but there’s more to consider than just the sticker price and your monthly loan payment. Learn the smart way to budget for a buying a car, even if you have bad credit or are living on a fixed income, in this guide from the experts at Green Light Auto Credit.

What Does “Affordable” Mean to You?

Take a look at your budget. You have a set amount of income and a portion of it has to go for living expenses such as groceries, utilities, and rent or mortgage. Most experts recommend that you spend less than 20% of your monthly income on car expenses. So that’s a start, but what car related expenses should you factor in?

Beyond the Sticker Price

Green Light Auto Credit Happy customer with new car

When calculating your car buying budget, you have to look beyond the sticker price to determine the true cost of ownership. After you add sales tax and registration fees, you should also factor in:

  • Fuel Cost: The fuel economy of the vehicle can have a major impact on the overall cost in the long run, so it’s a good idea to check the EPA ratings before you buy.
  • Service and Repair: Maintaining your car is essential but it can be costly. Taking the time to research the reliability and maintenance costs associated with the vehicle you are interested in can save you from potential headaches down the road.
  • Insurance: Insurance rates vary depending on the type of vehicle you purchase. Get an insurance quote on the car you are considering before you buy and see how it fits with your budget.
  • Time of Year: The best time to buy a car is at the end of the month, end of the year, or after the holidays. Make sure you plan ahead, so you get the best possible price on the vehicle you want.

Get the Car You Need Today

You’ll have to do the math in order to make sure you are buying a car that is within your means. You may also want to look into some popular car buying apps or read up on how trade-ins work to help you research and plan for your vehicle purchase. Here at Green Light Auto Credit our financing professionals can help you to get affordable car loan. We’ve helped buyers with poor credit scores, as well as those who have experienced bankruptcy, to purchase the vehicle they need. Fill out our convenient online loan application and see what we can do for you today. If you have any questions, or would like more information, don’t hesitate to contact us online, or give us a call at (800) 200-5551.