How Much Car Can You Afford?

We can help you find the most suitable for your needs and budgets at Barker Buick GMC so you don’t have to stress about purchasing a brand-new vehicle. Our dependable team can help you when you are ready to purchase a vehicle. Having a clear idea of your budget is essential before you start shopping. Here are some helpful tips to guide you in determining your budget for your next vehicle.

5 Factors That Determine the Total Cost of Owning a Vehicle?

It’s important to remember that a vehicle's sticker price doesn’t include all the expenses associated with owning it. To accurately determine the full cost, there are five factors to consider:

1. Maintenance and Repairs – Consider the expenses of auto maintenance to maintain your vehicle's optimal performance.
2. Depreciation – Take into account the first year of ownership when considering the total cost of owning a new vehicle, as this is when the highest amount of depreciation occurs.
3. Fuel – The fuel cost required by your vehicle is influenced by your choice of vehicle.
4. Interest on Financing – When you take out a loan to purchase a vehicle, the interest on that loan will accumulate over time.
5. Taxes and Fees – Remember additional expenses such as insurance, sales tax, and registration fees when considering the total cost of owning a vehicle.

Improving financing responsibility involves taking into account these factors when calculating total ownership.

Determining Your Monthly Transportation Budget

According to financial experts, it’s recommended that individuals limit their transportation expenses, which include maintenance, insurance, fuel, and car payments, to no more than 10% to 15% of their monthly income. This approach can help to manage finances and ensure that transportation costs don’t exceed a reasonable amount. Knowing your price range is crucial when purchasing a vehicle to avoid overspending.

Calculating How Much You Can Afford for A Car

Starting with a list of vehicles that pique your interest is a great way to determine your vehicle budget. To determine your monthly car payment, subtract your monthly insurance premium, maintenance costs, and fuel expenses from your monthly income. This straightforward calculation will give you a clear idea of how much you can afford to spend on your vehicle each month.

According to the American Automobile Association, car owners typically set aside $600 to $700 annually or roughly $50 monthly for maintaining their vehicles. It is advisable to allocate $75 monthly for unexpected repairs.

How To Calculate the Cost of Fuel

• Calculate Monthly Distance – Calculating your monthly distance is a breeze! Simply take your average daily distance and multiply it by the number of days in a month, which is 30 days. This simple formula will give you a quick and accurate estimate of the distance you drive over the course of the month.
• Calculate Gallons Used – To calculate your monthly gas consumption in gallons, divide the total distance traveled by your vehicle’s MPG. It’s a quick and easy way to stay on top of your fuel usage and budget accordingly.
• Calculate Total Costs – To factor in possible fuel price changes, add one dollar to the current price per gallon and multiply that amount by the number of gallons needed.

Formula: Monthly Fuel Cost = (Mile Per Day x 30 / MPG) x Price Per Gallon

Find an Affordable Car at Barker Buick GMC

It is essential to consider the financial impact of your vehicle purchase carefully. Selecting a vehicle that is within your budget can positively impact your finances. By following the provided guidelines, you can easily calculate your vehicle ownership expenses and determine monthly payments that fit your budget. This will help you make an informed decision and avoid any financial burden. Take advantage of these helpful tools to ensure a stress-free and affordable vehicle experience. Be sure to visit Barker Buick GMC if you’re in search of an extensive selection of both new and pre-owned vehicles within your budget.