When planning to buy a car, one of the very first things you need to think about is your budget. Because this is a major purchase, you don’t want to overextend yourself and quickly discover that you made a poor choice. With these tips from our Volkswagen finance center, you can create a budget that will enable you to get a great vehicle at a price you can afford.
Consider What You Can Pay Immediately
Step one when getting your finances in order is to think about the money you have right away for a down payment. It’s a good idea to put down 20 percent of the sale price, which will help significantly lower the amount you will need to borrow.
If you don’t have all of that 20 percent, it’s very possible that using your old car as a trade-in can help you get a lot closer.
Next, Focus on Your Monthly Payments
Once you have your down payment squared away, it is time to focus on your monthly payments. While you may be eager to pay off the loan fast, a short loan term will result in much higher payments. Going with a four-year loan is optimal, as this can make those payments a lot more reasonable.
Another good rule of thumb is for your car expenses—such as payments, gas, and maintenance—to not exceed 10 percent of your monthly income.
Make the Right Buying Decisions at Patrick Volkswagen
Patrick Volkswagen in Auburn, MA, can help you make good decisions for your car purchase. Let us know your budget and we will find the right car and work with you to create a payment plan.