How Much Can I Afford?
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:
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?
- 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.
- 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.
- 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.
- 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.