Financing Your Vehicle

Budgeting For Your New Car

You want a car, but how much can you really afford? The only way to know is to figure out a monthly budget.
 

Do the math.

Start with knowing your regular monthly take-home income.

Next, list all of your monthly expenses: rent, food, utilities, student loans, cell phone and entertainment (like that daily cappuccino!). Be as thorough as possible and most importantly, budget for savings, too.

Add up all those expenses and subtract the total from your monthly take-home income. If you have accurately accounted for all expenses, the balance is about what you can spend per month on a car. Keep in mind though, besides the loan or lease payment there are other expenses associated with owning a car.  A car budget must also cover:

  • Gas
  • Car insurance
  • Maintenance
  • Repairs
  • Parking
  • Annual fees (for example license, registration)

Sample Budget

MONTHLY TAKE-HOME INCOME        

                ________________

MONTHLY EXPENSES

______________  

Rent/Mortgage

______________  

Utilities

______________  

Food/Clothing

______________  

Loans(e.g. student)

______________  

Cell phone

______________  

Credit Cards

______________  

Entertainment

______________  

Savings

______________  
TOTAL EXPENSES
                               minus (________________)
  ______________  
CAR COSTS         
______________  

             GAS

______________  

             CAR INSURANCE

______________  

             MAINTENANCE/REPAIRS

______________  

             Parking/Annual Fees

______________  
     
TOTAL CAR COSTS     
                               minus (_________________)
     
TOTAL MAXIMUM CAR BUDGET     
                __________________


Okay, now that you know what you can afford, also remember to look at the total cost of the vehicle including financing.  Time for the fun stuff - car shopping!

                                  Popular Articles

Young woman standing alongside a Triple yellow Ford Fiesta with tool and accessory displays in background

True Cost of Ownership

Detailing the not-always-obvious expenses of car ownership

Young woman walking atop block letters spelling the word GAP

Optional Add-on Protection Products

There are many worth considering. What you need to know

Person typing at laptop with Ford Credit site web page on screen

What to Know Before You Go

Here’s a handy checklist for your trip to the dealership

Questions About Ford Credit?