If you are planning to finance a used vehicle, it's essential to calculate how much you can afford to pay for the cost of ownership. Costs include the down payment, monthly payment, insurance, maintenance, and repairs. It is recommended that you put down at least 20% of the price, however, if you can not afford to outlay that much cash at the time of purchase, you have options. Here's the easiest way to come up with a plan that works for you.
- Create a budget and stick to it. Determine how much you can afford to put down without digging into money that has been earmarked for other bills. The more money you put down, the less you will have to finance over the course of the loan and the less you will pay each month. You'll want your car to retain its value above the amount outstanding in your loan, so the down payment is important.
- Find out the total price of purchase, including fees and other add-ons. Since this is the amount you'll be financing, make sure you understand the fine print. The 20% down or different amount you choose to put down, will be based on the total purchase price.
- Calculate your monthly bills. How much can you afford to spend on your car each month, and for how long? If you know you want to pay off your vehicle in three years, you'll be paying a higher amount each month than you would if you took the loan for five years.
Head to Hometown Auto, and we can help you find the right car at the right price. We offer in-house financing and can help you calculate the correct down payment and affordable monthly payment for your budget. Visit us at one of our two convenient locations in High Point or Winston Salem.