As you prepare to buy a new car or SUV, you have to ensure it’s a smart financial decision. These tips from our Alfa Romeo finance specialists at Helfman Alfa Romeo can help you budget for your new vehicle.
What are You Comfortable Spending?
Before you budget for a new car, it’s important to determine what that budget is. Experts suggest keeping your total monthly auto expenses under 20 percent of your monthly take-home pay. Naturally, you want to also consider your other expenses and existing debt first to ensure you don’t stretch yourself too thin.
What Should My Total Cost Be?
Once you’ve determined a monthly payment you are comfortable with, you want to see what the total cost translates to. By using an auto payment calculator, you can get an estimate of a vehicle’s monthly payment based on its total cost. It also factors in your down payment, interest, taxes, and loan term.
How Much Should My Down Payment Be?
You’ve probably seen that 20 percent is the common recommendation for a down payment. However, it isn’t essential that you spend that much. It’s important to weigh the pros and cons of using your savings to see what’s best for you.
What’s My Trade-in Worth?
It’s also helpful to determine your current vehicle’s trade-in value before shopping. You can apply your trade-in to your loan so that you have less to finance (which can help you save on interest costs). This could have a huge effect on how much you can spend, so we suggest getting an estimate from our team (in-person or online).
Need help or still have questions? Visit our Alfa Romeo dealership in Houston, TX to discuss your financing options today!
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