How Much Car Can You Afford? [Steps W/ Calculator]
If you’re not careful, you can wind up paying more than a car is truly worth – or paying more than you can afford. Use these smart tips to figure out how much car you can afford.
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Written By:
Jeff Rose, Finance456® is a Certified Financial Planner™, founder of Finance456, and author of the personal finance book Soldier of Finance. He was a financial planner for 16+ years having founded, Alliance Wealth Management, a SEC Registered Investment Advisory firm, before selling it to focus on his passion - educating the masses on the importance of financial freedom through this blog, his podcast, and YouTube channel.
Jeff holds a Bachelors in Science in Finance and minor in Accounting from Southern Illinois University - Carbondale. In addition to his CFP® designation, he also earned the marks of AAMS® - Accredited Asset Management Specialist - and CRPC® - Chartered Retirement Planning Counselor.
While a practicing financial advisor, Jeff was named to Investopedia's distinguished list of Top 100 advisors (as high as #6) multiple times and CNBC's Digital Advisory Council.
Jeff is an Iraqi combat veteran and served 9 years in the Army National Guard. His work is regularly featured in Forbes, Business Insider, Inc.com and Entrepreneur.
Should you mention depreciation? If you decided to sell the car a year after buying it new, you’ll get a lot less for it than you paid.
I found this article to be very informative. Many Americans can’t do without a car, but few understand how much car they can afford. Keep on posting!
That’s an issue I’m running into: the car that I want/need is too pricey for my taste. I don’t know what to really do when it comes to that because the dealership has to make some type of profit as well yet I want to get it at a price that’s reasonable.
We recently bought a new car and financed it. I was able to get a loan for 1.49% so I knew I would be able to earn more investing the car money compared to what I will end up paying in interest.
Great tips. It helps to get a good auto loan that suits your financial capability. There are many things to consider before buying a car — most car buyers forget to include maintenance costs in their budget and it becomes difficult.