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Can You Afford a New Car?

Can You Afford a New Car?
New black car headlights.

Your vehicle may be great, but eventually, you’ll need a new car. The problem is, when you’re on a tight budget. Can you really afford to buy new? That depends on a number of factors.

Trade-in Value. Your current vehicle can be traded in, reducing the cost of your new car. It might not be enough for a luxury car, but you will be able to afford something at the car dealership.

Down Payment. The amount you pay up front will reduce your monthly payments, so it’s worth saving up and paying down what you can in the beginning. Your trade-in can count toward this, as well.

Taxes and Fees. When calculating just how much you’ll need to purchase your new car, keep in mind that there are taxes and assorted fees that will come into play, as well. If you are taking out a loan or doing car payments, don’t forget to plan for the interest, either.

Planning ahead and saving up or borrowing a little money so you can pay a larger down payment can make it easier to afford a new car. Be reasonable about what you can afford and run the numbers several times before you make a decision to avoid future issues.