We know getting the keys to a new car is a monumental event in a person’s life. Because of this, it’s imperative to make a wise decision. If you are buying a new ride for the first time, you should think about these few points. Used cars are a great option.
Get a Car Loan Estimate
Are you a first-time car buyer? How much income do you need for a 20k auto loan? These are questions used to determine your auto budget. By knowing what vehicle is realistic, you don’t overpay for a car.
Start by writing your total income and expenses down. Your total income is what you bring home, excluding taxes, retirement, savings, insurance, and other deductions.
Then go over to Automatic Car Credit of Idaho Falls. They will pre-qualify you for an auto loan. The process only takes a few moments and you’ll have a budget.
For most people, their first car won’t be their dream car, and that’s okay. The average person can only afford a $300 a month car payment. If you can afford the current auto loan rates, be aware of other considerations to owning a car.
The Down Payment
The general rule is the more you put down on a car, the lower the monthly payments. If possible, apply a down payment of 20% or more. It will also cause you to make fewer payments and lower car loan interest rates.
Budgeting for a Car
Planning a budget for used cars is easy if you focus on the monthly payments. The car budget planner says spending over 15 percent of your total income on a car purchase is highly generous.
Total Car Cost
When you buy a car, you assume all the costs associated with its upkeep. You will have reoccurring charges such as insurance and fuel, but there will also be routine maintenance.
Although you can afford the max car loan, what about repairs? A simple oil change costs hundreds of dollars whereas the same procedure in another car costs far less. Keep your auto budget to a minimum. The experts recommend 1/3 of your total monthly income.