Westmark Credit Union
We are a full-service financial institution, owned by our members & committed to the development of their financial future. We have 12 convenient locations.

Setting a Budget for a New or Used Car

Along with a house, a car is likely to be one of the biggest purchases you will ever make. Just like when you’re buying a house, it’s essential for you to set a realistic budget for yourself when you are car shopping, so car loans don’t sink your personal finance goals. Whenever you’re looking for a loan, sitting down with a credit union representative is a good way to get an understanding of your options and advice on fitting a car payment into your budget. These steps will help you stay in control of your budget while you’re car shopping.

Know Your Take-Home Pay

If you don’t already know exactly how much money you make each month, calculate it. Generally, your car payment shouldn’t exceed more than 20% of your take-home pay. However, you may need to spend less, depending on your expenses. After you know your take-home, run the numbers on your other monthly expenses to see what you have left over. When you have an idea of how much money you can spend, try to shop for a car that costs less than that figure, so you have some financial flexibility for emergencies.

Consider the Cost of Car Ownership

Whether you’re buying a new or used car, remember that the car payment is just one of the costs of ownership. Gas, car repairs, insurance, and parking are all additional expenses you’ll have to pay. Check with your insurance company to see what the car you’re eyeing would cost to insure. Consider the gas mileage of the car you’re looking at and how many miles you typically drive. In terms of repairs, used cars will have lower payments but will need more service. New cars may be under warranty, so you won’t be out of pocket for most repairs, but the monthly payments will be higher.

Determine Your Down Payment

Factor the car down payment into your budget. In addition to the down payment, there will be other dealer fees that are due upfront. Talk through all of these fees with the dealership before signing a deal, so you can add them into your budget.

Westmark Credit Union offers competitive rates on car loans in Idaho for both new and used purchases. Let one of our representatives help you set a realistic car budget today by calling (208) 523-1071.

Categories: budget, car

Comments

No Comments Posted
2520 Channing Way
Idaho Falls, ID 83404

Hours of Operation:

  • Closed Sunday
  • 9:30 AM to 5:00 PM Monday
  • 9:30 AM to 5:00 PM Tuesday
  • 9:30 AM to 5:00 PM Wednesday
  • 9:30 AM to 5:00 PM Thursday
  • 9:30 AM to 6:00 PM Friday
  • 9:00 AM to 1:00 PM Saturday