The financial experts at Liberty Dayton Chrysler Dodge Jeep® RAM work with customers every day to help them find a payment plan that seamlessly fits their budget. Here’s a breakdown of how to determine your ideal car budget.
Find Your Optimal Car Payment Budget
If you don’t know where to start your search for a car that fits your budget, a good rule of thumb is to spend no more than 15 percent of your gross pay or 20 percent of your take-home pay. You also want to factor other items into the equation, including how much money is coming in every month and how much is going out for other expenses, such as rent or mortgage, student loans, credit card debt, and similar items. Knowing your other expenses is critical so that you don’t buy a car you can’t afford.
Many first-time car buyers don’t consider the other expenses that come with owning a vehicle, including gas, insurance, and maintenance costs. It’s crucial to understand your monthly car payment will not be the only auto expense you’ll be making every month.
Time to Trade in
Once you know how much you can comfortably afford to spend on a new set of wheels, consider trading your current vehicle in as part of your down payment. In general, you should aim to put down at least 20 percent of the total cost for your down payment. This not only reduces your monthly costs, but it also saves you money on interest in the long run.
Stop by our TX Chrysler dealership today and learn more about car budgeting! We look forward to working with you soon.