How Much Car Can You Afford in Auburn, NY

How Much Car Can You Afford at Auburn Chevrolet GMC

If we could, everyone would buy a vehicle that was the pinnacle of luxury, with leather upholstery, a booming sound system, and all the latest tech. (GMC Denali, anyone?) But let's be real. Most of us will have to make some compromises to balance the cost of transportation with the rest of our expenses. Should you treat yourself to massaging front seats, or finally replace your fridge? When you're answering these questions, it helps to understand how to calculate the cost of car ownership and determine how it affects your budget.

How to Determine the Total Cost of Owning a Vehicle?

Spoiler: The price of the vehicle is only half the cost of ownership. Other factors that determine the cost of owning a vehicle include:

• Depreciation:Although it doesn't affect your out-of-pocket expenses, depreciation bears mentioning. As soon as you drive a new car off the lot, it starts to depreciate in value. This means that you'll lose money as soon as you buy it. It's hard to determine depreciation before you purchase a vehicle.
• Interest on financing:If you finance the purchase of your vehicle, you'll have to pay interest on the loan. This can add up over time.
• Taxes and fees:There are a variety of taxes and fees associated with owning a vehicle, such as sales tax, registration fees, and insurance premiums.
• Fuel:The cost of fuel will vary depending on the type of vehicle you own and how much you drive.
• Maintenance and repairs:Even if you take good care of your vehicle, you'll still need to pay for maintenance and repairs from time to time.

How To Determine Your Monthly Transportation Budget

The leading financing experts recommend that you spend 10% to 15% of your monthly household income on transportation, including your car payment, fuel cost, maintenance cost, and insurance. If you take home $5,000 a month after taxes and health insurance, you should budget between $500 and $750 for transportation.

How To Determine How Much You Can Afford for A Car Payment

Once you have a shortlist of vehicles to consider, find out how much they will cost to fuel and insure. Subtract those costs and the cost of maintenance from your transportation budget to determine how much you can afford to spend on a monthly car payment.

The American Automobile Association recommends saving $600 t0 $700 for car maintenance each year. That means you should set aside roughly $50 a month for maintenance. To account for inflation and unexpected repairs it may be better to set aside a total of $75 a month. For insurance, you can get an insurance quote from your preferred insurance company.

To calculate your monthly fuel cost, follow these steps:

1. Multiply the average distance you commute each day by 30, the average number of days in a month. This will give you the total distance you drive in a month.
2. Divide the total distance by the fuel efficiency of your vehicle. This will give you the number of gallons of gas you use in a month.
3. Multiply the number of gallons of gas by the current price per gallon. You may want to add a dollar to the price per gallon to account for fluctuations.

For example, if you commute 20 miles each day and your vehicle gets 30 miles per gallon, you will use 20/30 = 2/3 of a gallon of gas each day. In a month, you will use 2/3 x 30 = 20 gallons of gas.

If the current price per gallon is $3, your monthly fuel cost will be 20 x $3 = $60. If you add a dollar to the price per gallon, your monthly fuel cost will be $61.

Find a Car Your Can Afford at Auburn Chevrolet GMC

Determining how much car you can afford is an important decision that can affect your budget for years. Follow these steps to calculate the total cost of car ownership and determine how much you can afford to spend on a monthly car payment, then visit Auburn Chevrolet GMC. We have a wide selection of new and used vehicles to choose from, and our team of experts can help you find the perfect vehicle for your needs and budget.