How to Estimate Your Monthly Car Payment
There are ways to calculate your monthly car payment; as a matter of fact the calculations are simple math. The problem is determining the factors that are somewhat out of your control.
The only thing that really matters to the biggest majority of the people is the monthly payments; the other few percent pay cash. The monthly payment is the amount that covers your loan amortization but in determining how much you can afford for transportation the cost of insurance, fuel, taxes repair etc. must also be taken into account. Financial advisors will tell you that to be comfortable you should attempt to keep your car expenses within 20% of your net income.
Calculation of the monthly payment has to take into account your credit history, the interest rate applicable to the loan, the duration of the loan and your down payment. The variables are the one big reason that the sales executive at a Chevrolet dealership in San Antonio cannot even attempt to give a monthly payment figure on the spot. He may very well know the interest rate and you can tell him the term and your down payment but your credit history is the great unknown. Once your credit history has been checked and your rating has been established then and only then does the last variable fall into place.
There is a rough, really rough way to estimate your monthly car payments. For every thousand dollars you finance the monthly payment will be $20, roughly. This number is really painted with a broad brush; the assumption is decent credit, nothing down and a five year term. Any variable that changes will change the numbers so take this with a big grain of salt.
Assuming a loan period of five years and a budgeted figure of $500 a month, then your target price for a new car should be about $25,000, maybe a bit more if you’re a good negotiator. Be totally harsh on yourself and totally realistic.
Stick with your budget; don’t go into any great detail about the vehicle at this time. Afford what you can afford and that becomes the estimate of your monthly car payment. Bear in mind though, that not all that $25,000 can go on the car, leave some for taxes, any fees such as licensing and interest on the loan. If these add up to $4,000 then your top price is $21,000. If you want to reverse your calculations take the price of the vehicle, divide by 60 months and that’s your monthly payment without any add ons. If this is too much then your options are limited, buy a less expensive ride, put more cash down or take longer terms. The professionals at a Chevrolet dealership in San Antonio can help you with financing regardless of your credit history but remember to know what you can afford and stick with it.
Wommack Chevrolet is the Chevrolet dealership in San Antonio that you can trust for the best possible deal on a vehicle you will be proud to own.