Tips for Calculating a New Car Budget in Waterloo

Tips for Calculating a New Car Budget in Waterloo

Posted on September 9, 2021

Budgeting is one of those tasks you’ll either love or hate. Regardless of your feelings, it’s an essential task everyone needs to take when considering using an auto loan to buy a new car. Our Waterloo auto loans team explains how to use a budget to calculate your new car. Try it and see just how useful it can be!

New car budgeting in Waterloo

Budgeting for a new car may seem daunting at first but it’s relatively simple once you get started. Like most things in life, the thought of setting one up and managing it is scarier than the reality.

Before you can budget for your new car, you need to have a handle on your household budget so let’s start there.

Set up your household budget

If you don’t know how much you have coming in or going out, how are you going to know if you can afford the auto loan or not?

Use a free spreadsheet program and set up a household budget. Have one column for all your income. A second column should list every regular outgoing you have. A third column should list all your debts in order of interest rate. List them with the amount and the rate so you know what’s what.

Subtract the total outgoings from your income and you’ll see in black and white how much you have left over each month.

This is the basis for your new car budget.

Allocate a down payment

Next, allocate a portion of savings towards a down payment. You’ll need a minimum of 10% of the purchase price of a car as a down payment. If you can afford more, use more.

The more you put down, the less you’ll have to borrow and the higher your chances of being accepted for the loan.

Trade in your old car

Do you have a car to trade in? If so, add that to your down payment so you can keep track of it. If there are quick fixes you can make to your car to increase its price, make them.

Also consider selling your car to a dealership instead of trading in. If you drive a Kia, you may be better off selling the car at a Kia dealership rather than elsewhere as you could get a higher price.

Use an auto loan calculator

Use an online auto loan calculator or talk to one of our team. Have a play around with the numbers using the amount of spare income from your household budget and your down payment.

If you’re trading in your old car, don’t forget to add that to the down payment or subtract the average value.

Come up with a sensible figure over an acceptable loan term that works for you. That’s the beginning of your new car budget.

You can refine this as your new car research identifies some favourite options or you fall in love with a particular model.

Them, when you’re ready to go, come see our team to help you find the best Waterloo auto loan we can find!

Contact Unique Chrysler for help, advice and competitive Waterloo car finance and leasing.

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