Whether or not you make budgets for day-to-day expenditures like groceries, it’s a good idea to make one when it comes to buying a new car. Do you know how much you have to spend? Do you know how much you should be spending? The financial experts at our Subaru dealership near Manchester, NJ have a few tips to help you budget effectively.
There are lots of components that go into determining what your monthly auto loan payment will be. When you are shopping for new Subaru vehicles, there are a wide range of prices depending on what type of car you want and whether you want a new model or a pre-owned option. Naturally, the total price will affect your monthly payment and your loan term.
Your monthly payment also depends on the down payment you make. You will need to have either a cash down payment or trade in your existing vehicle when purchasing a new car. The more you pay upfront, the less you will have to finance. The financed portion will have interest added, which is the direct fee you pay to your financial institution. That amount can also vary greatly depending on your credit score and history.
So, how much can you afford? Try playing around with the numbers on a Car Affordability Calculator. Enter the total price of your vehicle, as well as the down payment you will make to see if the monthly payment is reasonable for your budget. Experts recommend you keep your car payment under 15% of your monthly income. Don’t forget to factor in additional costs like auto insurance and registration.
Have additional questions? Visit with our finance center at Lester Glenn Subaru – we can help!