“How much can I afford to spend on a car?” It’s a question we’re often asked by College Place and Kennewick drivers, so here’s a quick guide to help you out. The task might seem daunting at first, but identifying the ideal price is easy when you take the time to consider all of the necessary factors.
Account for Ongoing Costs
You’ll clearly need to begin by determining your monthly post-tax pay, but there are other costs to consider. It’s easy to work out your monthly take-home and forget about other expenses when you’re looking to buy a car. Things such as food and rent/mortgage payments are hard to forget about, but you’ll also want to consider any revolving debt payments.
Credit card debt should be taken into account, especially since it could affect your loan terms, but you should also think about any student loans and pension payments. Subtract all these monthly payments to help determine how much you can afford to spend on a car.
Consider Ongoing Costs
After you’ve come up with a realistic budget, remember to take every cost that comes with a car into account. Loan repayments will clearly be the most significant ongoing expense, but you’ll also need to account for costs such as:
- Repairs and Maintenance
Rates can differ markedly depending upon your location, driving record, age, and chosen vehicle type.
Know Your Loan Term Options
Some people may not be lucky enough to qualify for no-interest loan, others will be forced to shorten or lengthen the loan period, therefore changing interest rates. You’ll also need to work out how much you want to give as a down payment.
The Team at Walla Walla Valley Honda Can Help
At Walla Walla Valley Honda, our finance team are dedicated to providing the best rates we can, and our sales team work on salary instead of commission, so they’ll always point you towards a car that is priced right for you. If you’re still asking yourself, “how much can I afford to spend on a car?”, just pay us a visit for some friendly and impartial assistance.