How Much Car Can You Afford?

Deciding how much car you can afford involves more than just the sticker price. Monthly payments, loan terms, and ongoing costs all play a role in finding a vehicle that fits your budget.

Start with your monthly budget

A common guideline is to keep your car payment within a comfortable portion of your monthly income. This helps ensure you can cover other expenses without financial strain.

Consider your down payment

A larger down payment reduces the amount you need to borrow, which can lower your monthly payment and total interest paid.

Choose the right loan term

Longer loan terms can reduce monthly payments but increase the total cost of the loan. Shorter terms usually save money over time.

Don’t forget ongoing costs

Insurance, fuel, maintenance, and registration fees add to the true cost of car ownership. Factoring these into your budget helps avoid surprises.

Balance affordability and comfort

The goal is to choose a car that meets your needs without stretching your finances. A lower monthly payment can provide flexibility and peace of mind.