How much can I afford?

This is one of our most-asked questions, because it determines your car-buying budget, and ultimately, what type of vehicle you’ll be driving. There are several factors to consider. Follow these 5 tips to know what you can afford, while vehicle shopping:

  1. Bi-weekly or monthly payments: what is a payment YOU will feel comfortable with? Consider the following:
    • Are you paid monthly or bi-weekly?
    • When do your other payments come out?
    • Would it be helpful to stagger this payment with other expenses?
  2. Down payment:
    • do you plan to put a lump sum down on the vehicle, or finance or lease the whole amount?
    • Adding a lump sum in the beginning can lower your potential interest cost. This can also be helpful to bring down your overall monthly payment amount, for the length of the loan.
  3. Insurance
    • It’s always a good idea to check MPI’s website to see the annual premium for the vehicle you’re thinking of purchasing.
    • Ultimately, it’s helpful to consider the monthly or annual amount that the insurance will cost when you think about budget and a new vehicle payment.
  4. Trade-in tax savings: do you want to trade in your current vehicle?
    • At Birchwood Chevrolet Buick GMC, we consider all makes and models.
    • Trading your current vehicle in can be easier and helps to avoid the hassles of selling privately.
    • The trade-in value can reduce the amount of taxes owing on the new vehicle.
  5. Interest rate:
    • When looking only at purchase price, a used vehicle can seem more affordable.
    • However, new vehicles often have incentive interest rates available as low as 0%, which may make more sense in the long run.

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