How to create a car budget

By Product Expert | Posted in Tips & Tricks on Tuesday, May 12th, 2015 at 10:46 am
Buying a car on a budget How to create a car budget

Buying a car on a budget

Buying a new car? We know what that’s like. Sometimes it’s hard to know even where to begin your search. What most people don’t consider is before you get all starry-eyed looking at all of the cars you want, it’s most practical to set up a car budget. Your car budget is important because it really helps you narrow down your search. When you have a budget in mind, it’s much easier to figure out what’s in your price range. Here at Three Rivers Volkswagen, we’ll do you the service of giving you a run through on how to create a car budget.

shutterstock_77705899If you’re like most drivers, you’ll probably opt to finance your new vehicle and pay a monthly car payment. If that’s the case, the amount of your purchase needs to fit into your overall budget. There are many conditions that need to be considered to figure out what you can actually afford.

When you have monthly payments, you need to combine your car payment with your monthly expenses to form a budget. You’ll have to add costs such as rent or mortgage to the mix, so it’s a good idea to limit your payments to 45 percent or less of your monthly income. This way, you aren’t wiped out at the end of every month.

Calculating your vehicle’s total price

In order to create your budget, you’re going to need to figure out what you’re capable or willing to pay each month. On top of that, you need to decide the maximum amount you’re willing to pay. This is because the lengths of loans can be adjusted to meet monthly payments. In that case, you can end up paying a lot more in terms of interest.

Businesswoman doing handshake with a businessman sitting on sofaRebate programs, down payments, financing term, trade-in allowances and application fees are just some of the factors that should be considered when figuring out your vehicle’s overall price. Interest rates are also a big part of your budget. When you decide on your final payment amount, interest is something you need to add to the equation. While a shorter loan term means higher monthly payments, less interest is paid overall.

If at any time you feel that you need help in your search for a new car, don’t hesitate to contact us here at Three Rivers Volkswagen. One of our expert customer service personnel will be happy to help you.

Leave a Reply