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Archive for August 5th, 2009

The best way to determine how much monthly payment you can handle is to complete a monthly budget. Start with the amount of your take home pay and deduct your monthly expenses (fixed, flexible and variable expenses). Don’t forget to include the expenses associated with the new car: gasoline, insurance and maintenance.

Determine the amount of your down payment after you determine how much you want to pay as a monthly payment. Let’s say for example that you want to buy a car that costs $15,000; the special finance rate is 0 percent (for example). After completing your budget, you determine that you want to pay $250 per month for 48 months – this totals $12,000. In light of this, your down payment needs to be $3,000.

There might also be a chance that the financing source is only willing to finance $10,000 of this same vehicle. If such were the case, then, your down payment would increase to $5,000.