How Much Do I Want to Spend?

Another question to ask yourself is if a new car is within your financial grasp. Of course, how much youll ultimately spend will depend on the total cost of the vehicle itself, including various sales taxes and dealer fees. The key to being happy in your new ride is finding one that comfortably fits within your budget.

A price range based on your budget will help narrow your choices down to vehicles you can easily afford. If you intend on financing your new car, shop around for the lowest interest rates available, and dont be afraid to cross-shop between the dealerships in-house financing and rates from your local bank or credit union.

Buying a new car also means car payments will likely be your biggest expense. Recent data shows that the average monthly car payment was $568 for new vehicles. A good rule of thumb is to never let your fixed expenses car payments included push your monthly expenses above 50 percent of your income.

Monthly car payments arent the only expense youll deal with throughout your ownership. A new car also comes with a host of other expenses that could put a deep dent in your budget if youre not prepared:
Auto insurance premiums
Fuel costs
Routine and preventative maintenance
Routine and emergency repair costs
Yearly registration fees

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