When searching for a new car, budgeting is essential, and Jones Junction lists seven ways to calculate a budget for a new vehicle
In a posting on its website, Jones Junction said your budget plans can begin once you have decided whether you want to buy or lease your new vehicle. The first way to budget is to consider the actual price of the vehicle, which includes the additional fees. Second, you could consider what you can handle in terms of monthly payments, which will include principal and interest.
Next, Jones Junction says to look at the initial down payment because "the more money you put down on your vehicle at the time of purchase, the lower your monthly payments will be." The fourth option is to use the Jones Junction Payment Calculator to help you estimate what your monthly payment might be. Next, you can trade in your old vehicle, which is possible when you visit Jones Junction.
The next two options involve calculations that will help you budget with percentages. Use the 36 percent Debt Rule to get a good idea of what kind of payments you can afford.
"Calculate 36 percent of your monthly income," Jones Junction said in the posting. "Then, add together your monthly debts, including credit cards, loans, and mortgages. Now subtract this total from 36 percent of your monthly income – this number is the maximum amount you should budget for your new car payment. For example, if you make $2,000 a month and pay $500 a month in debts, your max car payment should be $220: ($2,000 x .36) – $500 = $220.00."
You can also use the 10 percent-20 peecent Rule, in which you keep in mind that "most people spend between 10 percent to 20 percent of their total income on transportation."