Calculating Your Budget For A New Vehicle

How Much Car Can You Afford?

You don’t have to purchase a brand-new vehicle to have everything you need; it also may not fall within your budget. There’s a lot to consider when purchasing a vehicle, and our team at Keffer Mazda is here to help you find a vehicle that is within your price range and also has what you’re looking for in a vehicle. Here are some helpful tips for determining how much you can spend on a vehicle.

5 Factors That Determine the Total Cost of Owning a Vehicle?

Your total cost of ownership doesn’t stop at the sticker price; several factors will impact your vehicle's overall cost including:

1. Taxes and Fees: You should consider additional expenses like registration fees, premium, and sale tax when purchasing a vehicle.
2. Maintenance and Repairs: Auto maintenance is required to keep your vehicle operating smoothly, so it’s essential to account for those in your overall cost.
3. Interest on Financing: If you have an auto loan, you’ll have to pay interest on the vehicle, and over time, the interest will build.
4. Depreciation: A new vehicle loses the majority of its value in the first year due to deprecation, and while it doesn’t directly impact your out-of-pocket expenses, it’s crucial to consider when considering the total cost of ownership.
5. Fuel: Your vehicle will need fuel, and the total fuel cost will depend on the type of vehicle you drive.

It’s essential to remember these factors when considering the total price of ownership that can help you be more financially responsible.

Determining Your Monthly Transportation Budget

Leading financial experts recommend that you spend no more than 10% to 15% of your monthly income on transportation which includes maintenance, car payments, insurance, and fuel. Knowing how much your price range is can keep you from overspending on your vehicle and any additional needs your vehicle may have.

Calculating How Much You Can Afford for A Car

Determining how much you can afford to spend on a vehicle starts with creating a short list of vehicles you may be interested in and then figuring out how much insurance, maintenance, and fuel will cost for each one. Then you’ll subtract that number from your monthly take-home amount, which will be your monthly car note.

Car owners typically set aside $600 to $700 each year for vehicle maintenance, according to the American Automobile Association, which is about $50 a month. However, a good rule of thumb is to plan to set aside $75 a month for any unexpected repairs.

How To Calculate the Cost of Fuel

• Multiply the usual number of days in a month (30) by the average distance you drive daily
• Divide that number by the miles per gallon on your vehicle.
• Multiply that number by the current price per gallon, and add a dollar to the price per gallon to account for fluctuations.

Formula: Monthly Fuel Cost = (Mile Per Day x 30 / MPG) x Price Per Gallon

Find an Affordable Car at Keffer Mazda

Stop by the Keffer Mazda dealership, and our team can help you find a dependable vehicle within your budget. You can also speak with our experienced finance department about your available finance options. When you’re ready to purchase your next vehicle, stop by our dealership located at 13307 Statesville Road, Huntersville, NC, 28078. Let us take the stress out of purchasing your next vehicle.