Before you buy a car, determine your budget for your monthly car payment. Many factors go into determining the final loan amount for the purchase of a new or used vehicle. These factors include any manufacturer's rebate, the trade-in value of your old vehicle less any outstanding balance, your down payment, etc.
Use our Financial Freedom auto loan calculator to see how much you can save in interest with a shorter term.
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According to this rule, when buying a car, you should put down at least 20%, you should finance the car for no more than 4 years, and you should keep your monthly car payment (including your principal, interest, insurance, and other expenses) at or below 10% of your gross (i.e. pre-tax) monthly income.
This calculator is for illustrative purposes only and is not a guarantee of credit.