Are You In Your 20’s? Find How Much You Should Pay For A Car

Bronx Buying a Vehicle | Mt Vernon Preowned Car Dealer

Purchasing a car is quite a thrilling event, as pretty much every 20-something out there will attest to. Whether it’s your first, second, or seventh vehicle, buying a new or preowned car in your 20s is virtually a given. The purchase is always an important one, and should be approached wisely.

  • Don’t be tempted by that flashy little number with the hefty price tag
  • Don’t be swayed
  • Take into serious consideration your monthly income as well as any debts you currently owe
  • Remember, the cost of a car doesn’t end once you’ve driven off the lot; it’s a lifetime commitment

We’ve outlined three simple rules designed to make your car-buying experience just a little bit easier.

The 36 percent rule

Consumer Reports recommends keeping monthly debt under 36 percent of one’s gross income. Take into consideration any student loans, rent or mortgages, and monthly expenses. To decide how much green you can afford to spend on that coveted little speedster, simply calculate 36 percent of your income. On an income of $25,000, 36 percent would equal $9,000. Divided monthly, your debt payments should not exceed $750. Decide how much of this you will allocate to your car and how much to other expenses.

The 20 percent rule

Another school of thought dictates that 20 percent of one’s monthly income should be spent on a car. This rule generally gives you a reasonable amount to spend on a safe, reliable vehicle. With an average income of $25,000, 20 percent would be $417. Don’t forget that you can adjust your monthly payment to an amount you are comfortable with simply by adjusting your down payment.

The ten percent rule

If you are purchasing a car out of necessity and aren’t absolutely dying to throw down a ton of cash, consider spending ten percent of your monthly income on a car. For an average $25,000 yearly income, that means spending about $208 a month. Doing a little research and due diligence up front often translates to discovering great bargains. Take you time and don’t feel like you must go with the more expensive option.

There are a lot of exciting milestones to be attained in your 20s; buying a new or used car is high on the list! Take these simple car-buying rules into consideration and you’ll be well on your way to finding the car of your dreams! Start by filling out your used car finance application online.

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