How Much Car Can You Afford?
Author: Jamie Franklin
Choosing a new car can be a thrilling experience for many.
Some are looking for a cheap car just to get by, but many are
also looking for that dream car. The car that they can really
jump into and feel good about. However, the tendency to go
overboard, wanting to buy more than you can easily afford, can
kick in.
What is Your Dream Car?
Everyone has a different definition of their dream car. For a
mother of four, a dream car may mean a luxury SUV which is
equipped with the latest safety innovations. On the other hand,
for a 25 year old man, a dream car may mean the newest, fastest
sports car out there. Whatever your definition of a "dream car"
is, you most likely have a budget to work with. Very few of us
can purchase any car we desire and even those who can afford a
hot sports car may have to settle for an $80,000 one, as
opposed to a $200,000 dollar one. Knowing your budget, and
making a commitment to stay with it, before you begin your
search will make the car buying process an enjoyable
experience.
Knowing What You Can Afford
The first step is determining your car budget. A good range is
to keep your car payments at no more than 15% of your total
monthly income, 10% is even better. This is based on your net
income (your income after taxes and other deductions or your
"bring home" pay), not your gross income (your income before
taxes and other deductions).
Once you have discovered what you can afford each month that is
the time to find a car within this budget that will also fit
your needs. You can utilize a website such as
www.vehiclesonline.com to find out what vehicles are in your
area and which one of these cars will fit into your projected
budget. A comprehensive car search option, along with financial
tools, will help you easily and quickly find what you are
looking for.
Ways to Afford More
There are two main ways to get more car out of your current
budget.
1. Buying a new used car instead of a "new" new car.
By buying a "used" car that is only 1-3 years old, you can
still get an outstanding vehicle while paying thousands less
than you would if the car were brand new. For example, a car
that costs $15,000-$20,000 brand new, may only cost
$8,000-$10,000 two years later. Many of these vehicles have
been leased by the dealership and then put in the used car
section to be sold, so the dealer knows exactly how many people
have "owned" the car and has probably checked the car between
each "owner".
2. Buy a car when interest rates are at their
lowest.
Buying a car when interest rates are low, can also help you
afford a larger monthly payment. For example, a $10,000 five
year loan can save you $300 overall at a 6% interest rate, as
opposed to a 7% interest rate. Although that may not seem like
a lot, it is also based on a small car loan. If you have a
larger loan, you will save more money. For example, the same
loan at $30,000 will save you almost $850 at a 6% interest
rate, as opposed to a 7% interest rate. That is a nice savings
and will help to keep your debt-to-income ratio lower, which
will help determine whether you can qualify for other things,
such as a mortgage.
3. Buy On-Line
Yes, that's right; buy your new or used car or truck on-line.
Most new car dealers have Internet sales departments. These
low-key sales people don't deal with walk-in traffic, they
service the customer who comes in through cyberspace. The
dealership looks at this type of sale as one they would not
have gotten locally. For this reason, they are willing to offer
deep discounts to Internet buyers. Does this mean that you have
to buy it, sight unseen? Absolutely not. You work out the
details on line and go to arrange the final details and pick up
the vehicle at the dealership.
It also makes sense to go through an auto portal like
Vehicles OnLine. These automotive
portals have many participating dealers and thousands of
used cars on display for you to choose from. You can find
this automotive at http://www.VehiclesOnLine.com
Changing simple things so that you are able to afford a better
car on a smaller budget, will help you enjoy your car buying
search. You may still not be able to buy your dream car, but
you will be able to find a reliable car at a reasonable price
that you are satisfied with.
About the author: Jamie Franklin is a freelance writer living
in Dallas, Texas. Jamie writes about Internet shopping and
services. She is a graduate of the University of Arkansas. You
can email Jamie at Jamie_Franklin_1980@hotmail.com
| 
