Establish Your Budget

Develop your Car Buying Budget and stick to it!

You can now start to realize your actual budget and look only at vehicles that are in your budget. Newlyweds think ahead, you may be financing for 3-4 years, so a 2 door coupe may not be practical. 

If the type of new vehicle you need is out of your budget, then you should consider a good used vehicle.

First of all, you need to have a monthly budget. Add up all of your fixed monthly expenses, such as your rent/mortgage, phone bill, etc. Subtract that from your net income. Then subtract your estimated extraneous expenses, such as food, gas, entertainment, etc. The result should be an amount of money you have to work with.

Shoppers with bad credit should expect to pay a higher interest rate than good credit shoppers. Buying a car is a great way to rebuild your credit. If you need credit help, don’t worry. Many lenders offer bad credit auto loans .

Do not be bullied into buying from a buy here pay here dealer because many lenders now offer it, and you need to shop around for the best interest rates and quality used vehicles.

 If you don’t know your credit history when you go to buy a car, don’t be surprised if your interest rate is higher than it should be.

Know your Payment limitations and Price Range before you hit the streets.

Don’t let a salesperson tell you what you can afford. 

Click here for our easy to use Monthly Payment Calculator. Know ahead of time what the loan rates are and remember, your credit rating will effect the loan rate.

Example of a simple loan computation:

Loan amount $20,000

Interest rate 8%

Length of loan 48 months

Payment would be $488.25

To compare interest rates on car loans with different banks in your area click here Do not assume your bank or the dealer is giving you the best interest rate available.

* The table above is just a guideline to help you get an idea of your price range. When your car loan is approved, the lender will set the interest rate based on your credit history and other factors including how much you can afford to pay each month.

You should check all of your credit cards and pay them down or off before going for financing. Just because you think you can afford the payment, doesn’t guarantee the lender will agree.

Car Loan Amount*

Monthly Payment Range*









Remember to factor in your insurance payment, because rates will vary depending on the type of vehicle you are buying. Use one of the discount brokers online and tell them the types of vehicles, and get direct quotes. This will allow you to factor it into the overall monthly payment.