How Much Money Should I Spend on a Car?

Adulting is complicated. Car buying doesn’t need to be. Suretys makes it simple and easy. Easy like, approval process, check! Best rate, boom! New car, drive on! It’s like the best thing since sliced bread. That’s Suretys, ridiculously easy. There’s still the whole need-to-pay-for-it-thing, though. Here’s the deal. All cars are not created equal. There are differences, there’s options. There are features. There are backup cameras, leather seats, lane departure warnings, electric cars, and a whole lot more. Did someone say sticker shock?! Nobody likes surprises when it comes to added costs, and so, as our last post suggests, there are some questions you may want to ask yourself before heading to your local dealership. Get your pen and paper and take some notes. Maybe a calculator, too, if math isn’t your thing. 

How Much is That Car in The Window…and Can I afford it?

In 2022, the average car loan is about $30-$39K. Experts say spending between 10%-15% of your monthly income is the recommended “safe” amount. This includes related expenses, such as, insurance, monthly payments, registration, gas, repair costs, and upgrades. So, how do you know if you're good for the money? It’s time to calculate your income. Your money after taxes will be the amount you’ll calculate from. For instance, if you make $5000 per month, you may want to spend between $500-$700 to stay on the safe side. There’s also the popular 1/10 rule. Don’t spend more than 10% of your gross annual income on a car. Since buying a car can cost more than one anticipates, capping the spending by 1/10 will be the most effective way to save. (This opinion is relative since other sudden expenses may easily impact your ability to spend this amount). Like I said, grab a calculator. 


Look out For Extra Fees and Taxes

If you’re doing a bit of research before purchasing your car, keep in mind that the price you see online isn’t the complete and total cost of the car. There’s the registration fee. Depending on where you live, this cost will vary. Title and plate fees, dealer fees, and sales tax are also costs to consider. In Connecticut, there’s vehicle property tax, which is another expense to account for. Often, these extra fees can run anywhere from $1500-$3000. These costs can come as an unexpected disappointment for a first-time buyer who isn’t prepared to pay. To avoid the letdown, get the lowdown first! 


Get Interested in your Interest Rate

When financing a car, take a deep dive into your interest rate. Your rate will also determine your monthly payments and repayments. With Suretys, on an average car loan of about $25K, the interest rate is 6.99%, a major win compared to the regular 22% interest rate! Over the lifespan of your loan, you want to ensure you’re paying the lowest rate you can afford. 


To Quote TikTok and Louis Theroux: Does your Money Jiggle-Jiggle or Fold?!

How does your money situation look? Do you have any debt? These questions are worth investigating and calculating, as it determines how much of your income is left after you get through paying off your debt commitments. Your car-buying budget will be smaller if you have extra debt to consider each month. 


Bang for Bucks 

 You want the best bang for your buck when it comes to car-buying and who doesn’t?! That’s where the art of negotiation typically enters the picture. At Suretys, we genuinely score our first-time buyers the best deals, so there isn’t any need to get all worked up trying to save money. Our app and unique algorithm consider your financial history and does all of that for you. The best deal at a price you can afford, and with a rate you deserve! What could be better, right? Not much. Maybe ice cream.  


Only one Thing Left to Do 

Choose a car that’s right for you and get behind the wheel. Now that you’ve done your budgeting ahead of time, you can invest extra money somewhere else. Spending within your real budget means no regrets. It helps you prioritize and keeps you responsible. Whether it’s saving extra for a vacation, tuition, or to help pay off your debt faster, spending within your means allows you the freedom to choose the lifestyle that’s best for you. Financial freedom looks good on everyone. 


Ask Suretys to Be Your PlusOne…

Suretys knows buying a car is complicated. Convincing a parent or a friend to cosign for you adds a lot of pressure. What if you had your own PLUS ONE? Suretys replaces the need for a cosigner and becomes your PLUS ONE. The proof is all in the word “significant”: SIGN IF I CAN’T! Suretys takes the weight off while you take the wheel. Learn more to join the movement.