On paper, paying cash makes much more sense. If you can afford to pay cash, should you? Here’s why financing is almost always better than paying cash But we still recommend that you convince yourself that a used car is the better move. If you can’t bear the idea of driving a used car, but also can’t afford to finance a brand new one, leasing might be an option. If you don’t want the hassle of having to sell a used car, leasing might be the way to go. To be clear, this method isn’t necessarily cheaper than buying used - but it is a bit more convenient. Read more: Why you should (almost) never lease a car The two times leasing might make senseĪll that being said, there are two cases in which leasing might make sense. “Buying a car is almost always better than leasing.” Leases are riddled with hidden costs that drive up the monthly payment, such as higher insurance rates, mileage charges, and the results of the dreaded credit card test, where the dealer will charge you for every nick and scratch bigger than a credit card.Īs a result, Allyson Baumeister, a member of the Texas Society of Certified Public Accountants, says: Well, at Money Under 30, we’re torn on the idea of leasing a car. We know why a lease can be tempting - you get a brand new car for a lower monthly payment than a car loan. Now, let’s talk about buying versus leasing. Since we stayed within budget and put 20% down, we’re ~$80 below our maximum recommended payment - a good place to be. Punch in those numbers and scroll to the bottom, where you’ll see an all-important figure: Maximum recommended monthly payment. You don’t have a trade-in, and you choose a 48-month loan at 4%. Your budget is 35% or $14,000, and you plan to make a 20% down payment of $2,800.
#CAR MORTGAGE CALCULATOR CANADA HOW TO#
How to use the Money Under 30 Car Affordability Calculator You can tinker with the Money Under 30 Car Affordability Calculator to get your exact numbers: The Enthusiast: “I love cars and want my whip to be as fun/luxurious as possible within budget.” Spend limit: 35%.The Compromiser: “I’d like some creature comforts - maybe a good sound system and heated seats.” Spend limit: 25%.The Frugal Commuter: “I just need something to get from A to B.” Spend limit: 15%.Folks who just want something to ferry them to work will be perfectly happy spending way less, while anyone who grew up watching Top Gear will likely want to spend closer to the limit. Not everyone should spend over a third of their income on a car. Read more: 25 ways to make money on the side Make $60,000, and the car price should fall below $21,000. That means if you make $36,000 a year, the car price shouldn’t exceed $12,600. Whether you’re paying cash, leasing, or financing a car, your upper spending limit really shouldn’t be a penny more than 35% of your gross annual income. Here’s how much car you can afford Follow the 35% rule 5 tips for getting the best deal possible on a car.Why your budget is lower than you were hoping.
0 kommentar(er)
