How to Budget for Your Next Certified Pre-Owned Vehicle Purchase

It is always important to plan ahead with a big purchase, and a car certainly falls into this category. A major step in the planning process involves thinking about your finances. Before you visit any Certified Pre-Owned dealerships, it is essential to have a firm grasp on what you can afford to spend. This guide from Moran Certified Pre-Owned goes over the key areas to consider when creating your budget.

Down Payment

One of the first things to figure out is how much money you have on hand right now that can go towards the down payment of your Certified Pre-Owned car. The more you have, the better, but you should aim to reach 20% of the sale price. If you are trading in an older car, find out what it’s worth, as you can use its value to augment your down payment.

Loan Term

Another big decision to make involves the length of your loan. Here you need to choose wisely. A long-term loan may look good because it lowers your monthly payments, but it will result in having to pay more in interest down the road. A short loan lets you pay it off faster, but it increases how much you owe each month. This is why it’s often a smart idea to split the difference and go with a loan of four or five years.

Monthly Payment

Lastly, you need to think about what you want to pay every month. A good rule of thumb to follow is not to spend more than 10% of your income on your vehicle. This doesn’t just include the payment, however, but expenses like fuel, maintenance, and insurance.

Make Smart Financial Choices for Your Certified Pre-Owned Car

A successful purchase of a Certified Pre-Owned vehicle means finding a car you love at a price you can afford. At our used car dealership in Chesterfield, MI, we will help you accomplish this. If you are ready to get started with Certified Pre-Owned financing, you can begin the process by filling out our online application. If you have any questions or concerns, feel free to get in touch with our financing department.