How Much Can You afford
February 07 2022
You have decided you want to buy a vehicle, but you are unsure what to get. There are many options on the market, but your credit rating may limit your choices.
Things to Know
Knowing how much you can afford to pay every month for you car loan can be very helpful in knowing the price range you are shopping within. A popular school of thought is that you can spend about 10% of your income on the car loan, and up to 20% on your car overall (including maintenance, insurance, fuel, etc.). Once you know what you can afford each month you can begin to calculate what you can comfortable borrow for your car loan.
Here is an example:
If you earn $3,000 monthly, you would ideally spend up to $300 on your car loan. Being realistic about how long you want to or can afford to make monthly payments is vital.
Buying a pre-owned vehicle from iRIDE Auto Financing can help you save money on the loan or lease. But when determining what “affordable” means to you, here’s a few things to keep in mind:
- Your credit rating
- How much you have saved for any down payment
- The term over which you want to pay off your car loan
- Sales taxes
- the interest rate you qualify for
- Using a car affordability calculator
The auto loan calculator that you see on iRIDE Auto Financing's vehicle pages starts with the cost of the vehicle that you are viewing, and calculates your bi-weekly car payment based on the variables you can provide.
The calculator lets you adjust your loan terms and enter various inputs to customize your loan amount.
Defining how much car you can afford
You can be save money and time in the long run if you calculate the amount you can pay for a car before visiting a car dealer, and our sales staff will be in the best position to help get you into your new car.
If you’re trading in your old car or making a down payment, you should be able to borrow less money or buy a vehicle that is higher-priced.
Always set your budget a little under the loan amount you can afford. There are other fees and sales taxes that may add costs to your total bill, and that can be surprising if you are not prepared. Know your finances, take your time, and maybe most importantly, trust iRIDE Auto Financing to work with you.
