There’s no denying that buying a new car is an exciting time. However, it’s important to budget for your purchase to make sure that it’s one you don’t regret. Our Ford financing experts at Folsom Lake Ford are sharing a few tips to help you get started.
Look at Your Existing Expenses
Before you can determine how much you have to spend on a new vehicle, you need to look at your existing expenses. As a general rule of thumb, it’s best to keep your auto payment and expenses under 20 percent of your take-home pay. This includes your car payment, insurance, maintenance, and fuel or charging costs.
Consider Your Current Debt
It’s also important to review your existing debt. Experts suggest that you keep your debt-to-income ratio under 35 percent. Keep in mind, these numbers often vary by lender, so think of them more as a guideline than a strict rule.
Use an Auto Payment Calculator
There are lots of factors that go into your auto payment. They include the vehicle’s total cost, your down payment, trade-in value (if applicable), and interest rate. With an auto payment calculator, you can get a quick estimate on your auto payment and see how the other factors affect it.
Plan For a Down Payment
If you can, it’s best to aim to make a down payment of at least 20 percent on a new vehicle. This can help you avoid negative equity on your loan. You can also trade in your existing vehicle and apply its value to your new loan.
Apply for Ford Financing in Folsom, CA
We have a quick and convenient financing process at Folsom Lake Ford. We’re happy to sit down with you and review your options or help you apply. Stop in to get started today!
