How Much Can I Afford on a Car? | Andy Mohr Nissan

So, you’re shopping for a car and you’re working on creating a budget to see what you can afford. Well, there are many ways that you can plan your monthly car expenses and many financing options to choose from.

We at Andy Mohr Nissan want to help Indianapolis, Lawrence, and Speedway drivers plan out their finances effectively. Read more to learn about budgeting and what cars we have available for the finance-savvy driver.

 

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How High Should My Monthly Car Payments Be?

There is somewhat of a debate over exactly where your monthly car loan payments should be, but there are a few numbers we can go by. Generally speaking, about 15% of your monthly income is a comfortable place to be for your monthly payments. However, finding monthly payments that are lower than that is always good.

It’s important to consider other major monthly payments in the mix as well, most importantly any rent or mortgage you may be paying. Generally speaking, it’s a good idea to factor in all debts to about 33%-36% of your monthly income.

For a more planned-out budget, you can always use the 20/4/10 rule for car payments. Basically, if you can pay 20% for a down payment while financing for four years and still keep the monthly payments to 10% of your monthly income, it’s a safe buy. This isn’t an absolute must, but this is a good path to take for comfortable monthly car payments.

If you’re looking to save up or cut down on costs for your budget, there are a number of things to do as well. Shop smart at the grocery store, going for any deals they offer for the day. If you eat out a lot, cutting down on those costs by bringing lunch to work can go a long way as well.

Financing or Leasing

Something you might be seeing a lot while shopping for your new car is the option to finance or lease. Financing is the simplest option; you simply get a loan to pay off your car in-full over time. Leasing on the other hand has you signing a contract allowing you to drive the car for a few years, only paying for the car’s depreciation over that time.

Leasing can be a good option for some drivers as it means they can usually find cars at lower monthly fees this way. It depends on the car you’re looking at, though, and overall if you’re thinking about leasing, it’s often best to do your research on lease offers first.

Great Car Options

Among Nissan’s lineup are many cars that are great for drivers looking for more economical cars. We’ll start with the Nissan Versa which is an excellent sub-compact sedan providing drivers with great fuel economy and a small build. This car is also great with conserving fuel, so commuters are sure to be pleased.

The Nissan Sentra is a bit more spacious while also offering the same great fuel economy we see with the Nissan Versa. This is a very versatile compact sedan that’s good for city drivers looking for a car to use every day.

Finally, we have the midsize option with the Nissan Altima, a stylish sedan that’s good for a variety of budgets. If you’re looking for a car that’s got some nice pep under the hood while still being fuel efficient, this is a good option for you.

Explore Our Nissan Inventory

Budgeting is a simple and rewarding way to buy the things you want, and at Andy Mohr Nissan we’re here to help you with just that. We’re happy to provide Indianapolis, Lawrence, and Speedway drivers with a finance team to guide them in their next car purchase.

If you’re looking for a new car from our lot, explore our website and get pre-approved for an auto loan today.