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What You Can Afford to Spend
It's human nature to want more than we need or can afford, but long-term satisfaction is far more likely with a car or truck that does not end up being a constant strain on your budget. Remember, there is a wide selection of new cars and trucks today in all price ranges. Many offer aerodynamic styling, high technology systems,
better performance, handling and longevity. So be realistic and honest with yourself.
There is no magical formula to determine how much of your income should be allotted to pay for your new car. Some people are willing to spend more than others on their cars. A car should fit comfortably within your budget without crowding regular fixed expenses or crimping your lifestyle. How much you spend on a new car depends on your overall financial situation - income versus debt. If you need to finance a vehicle, it also depends on how much down payment you have and how much you can comfortably allot to monthly car payments. Once you have determined how much you can afford to spend on a new vehicle, stick with it.
Before financing or leasing a vehicle, make sure you have enough income to cover your current monthly living expenses. Then, finance new purchases only when you can afford to take on a new monthly payment. The
Monthly Budget Calculator
is a tool to help you determine an affordable payment for.
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