There’s a lot that goes into actually affording a car. Paying for a car means spending money on the initial purchase in addition to maintenance, upkeep, repairs, and other things. How much can you really afford when it comes to buying a car? This guide should help!
The Payments
Start with figuring out how much you can afford to put down on a car. While many people don’t offer up a downpayment on a car, putting some money towards a car from the start will lower the overall price of the car including those monthly payments. How much money can you gather to put up front? Whether a new, used, or trade-in, extra cash helps.
Next, figure out how much you can afford to pay monthly without breaking the bank. This doesn’t necessarily mean that you should spend as much as you can afford either. Think about things like whether or not your job is a stable one, if that payment will be made, but might take everything you have per month, and how much you are comfortable spending on a car each month. Could those extra dollars be spent better elsewhere? This is an important factor to consider.
Figuring Out the Math
Consumer Reports recommends that you use this equation to figure out those monthly payments: 36% of your gross monthly income – the total of your monthly bill payments. Once you subtract this amount, you’ll have the right monthly payment amount. When looking at your monthly payments, consider how much you have to pay in all kinds of monthly bills from water to heat and everything in between. If you have a home, this has to go into the equation too.
The Consumer Reports equation is just a suggestion, but it’s a good one. Most people shouldn’t be paying more than this amount on a car every month. You also have to take into consideration the current interest rate on a car, and how long you want to make car payments for. Sure, those payments might be lower if you pay for a car for the next thirty years, but is this something that you really want to do? Maybe not.
Additional Costs
The cost of a car is not just the upfront price, or the price that you will be paying monthly. Other things to consider include insurance, registration tax, and sales tax. Next, there are repairs to think about. How much do basic things like tires, brakes, and other repairs cost on that new car? Typically, luxury cars come with very expensive parts, so take that into consideration when buying an inexpensive luxury car — sure, the price might be low at the start, but that price may inch higher the more you have to repair the car.
Additional Parts
Sometimes, it’s better to buy a car that has a number of high tech options like a wireless backup camera. Other times, adding something like a rear view camera to a car after you purchase it can be cheaper. If you want a car with the latest technology, you will likely have to pay more to get those things unless you install a wireless backup camera system after you purchase your car, which can turn out to be less expensive.
Do you really need a rearview camera? Statistics have shown that back up cameras can save lives, and, in fact, they will be required in every new car starting in 2015 in the US. So, yes, a backup camera is really important if you want to make sure that you and your family are safe. Technology like an additional camera is also vital if you have teen drivers that may not look before backing up!
You can purchase the best back up cameras from Quick Vu and Trail Ridge Technologies today for a price that’s reasonable and within your budget. We want to make sure that the car you buy (no matter how much it costs!) is safe at all times, and the best way to do this is with a camera that can warn you when you are about to back into something dangerous. Call us today for a free estimate.