How can I determine how much I can afford to spend on a car?
The first thing is to work the payment into your budget. That's really critical. Because, obviously, you are probably going to finance the car so you are going to have to know how much you can afford to pay each month. You can use some online calculators. One at Kipplinger.com for example can help you do that. How much money can afford to fit into your budget? The other thing that is really critical to do is get pre-qualified for a loan. That is, go to your bank, go to your credit union find out what your credit score is and how low of an interest rate you'll qualify for. First of all, that will help you figure out what that monthly payment is going to be and you can know whether is it going to fit into your budget. But also, when you go car shopping and the finance people at the car dealership try to sell you financing, then you will know if they are quoting you a higher rate than you can get if you went and found financing on your own. Of course, it is the price of the car plus the financing that really determine the monthly payment.
