Tips for Budgeting for a New Car

May 8, 2019

If you’re thinking about buying a new Kia car, you should probably have a budget in mind. Learn the trick to budgeting for a new car with this helpful guide from the staff here at Classic Kia.

The 10%-20% Rule

Though everyone’s financial situation is unique to their life, there are quite a few good general rules to follow when it comes to budgeting for a new car. One common rule that seems to work for many drivers is the 10%-20% rule. Essentially, this rule states that you should dedicate no more than 20% of your annual income to the purchase of a new car. We’ve found that most drivers stick to spending around 10% of their annual income on their car.

Month by Month

Another way to go about budgeting for a new car is to analyze your finances on a month-to-month basis. That means instead of thinking about how much you can afford to spend in a year, think about how much you can afford monthly. When calculating this number, it’s best to err on the side of caution. Instead of spending most of your monthly budget on your car, aim for somewhere comfortable. It’s also important to note that the monthly payment of your car is not just the cost of the vehicle itself, but also the cost of insurance, maintenance, and gas.

We know that this subject can be quite tricky to understand, but our staff is always on hand to help. Talk to a representative at our Kia finance department in Waukegan, IL, to learn more specifics about finances. They can walk you through the ins and outs of your loan terms so you’ll know exactly how much you’re paying for your new Kia car.

Visit Classic Kia today!