How Much Money Can I Spend For My New Car?

If you are dreaming of getting a new car, embark upon action today! Begin with asking yourself, “How much money can I afford for a car?”

Tips that You Should Know Before Spending Money on Your New Car

• Exactly Know How Much to Spend on Car?
  If you are thinking of buying a new car it is important that you first determine the type of car you need. That’s important prior to formulating a workable budget. For example, if you are family of 4 or 5 members, you might need to purchase a SUV, mid-size sedan or a minivan. Besides, a lot could also depend on the features in the vehicle as well as its body style you are considering purchasing. But make sure that car you get has a good mileage and is easier to sustain.





• Meet the Expense of Car with Total Costing
  Budgeting is the next crucial exercise which needs to be undertaken once you have decided which car to buy. To that effect, you must find out the amount of money you can spend every month on car instalments based on your existing level of net monthly income and debt payments. And while doing the calculations, do not forget to take into account expenses that are likely to be incurred on food, utilities, health care, gas charges, car registration, insurance, maintenance, taxes, etc. This will give you a fair idea about which car you can afford.
• Considering Other Assets
  To qualify for the lowest and the best rates of interest on car financing loans, you could be required to pay a large down payment. Alternatively, you could also think of pledging some valuable asset like home or home equity as collateral against the loan being provided. Savings, share scripts or bonds can be sold to arrange money for down payment. Some of you can even consider trade-in of existing cars to cover up for the down payment amount. Usually, most of the lenders demand 20% down payments from applicants to get preapproved auto loan.
• Situations - You Should Know
  If you are a college student who hasn’t established any credit or have bad credit rating as yet then you might be needed to pay a significantly larger down payment or higher rate of interest or both. In addition, some loan dealers can also ask for a creditworthy co-signer to co-sign the loan that is being offered. Such a proposition enables them to make sure that the money lent is perfectly recoverable in the event of a loan repayment default. The co-signer is responsible for paying the car loan dues if borrower fails.