How much is your monthly car payment? Here’s how to figure it out

How much is your monthly car payment? Here's how to figure it out

Shopping for a new or gently-used vehicle is an exciting process. But figuring out how to pay for that car isn’t always as fun. The good news is Financing your vehicle doesn’t actually have to be such a painful experience. With a little planning and help from your trusted bank, your dream car could soon be a reality.

Here’s how to figure out what you can afford to pay for a new car — interest and all.

Figure out how much you can afford.

First, determine how much money you can afford to spend on your car — and don’t forget to factor in your insurance payments, your gas expenses, and occasional upkeep at the mechanic. Take a good hard look at your monthly budget and, as always, err on the side of caution. You’ll still need to pay for all of life’s expenses.

Most importantly, though, you need to keep interested in your loan in mind, or else your budget will be off. The Mountain America car loan calculator can help you determine the true price of a car, including the manufacturer’s rebate, your current vehicle’s trade-in value, any outstanding balance, and your down payment.

Apply for the right loan.

Now that you’ve looked at your budget, it’s time to check out your financing options.

Unless you’re part of a very small population of people who can pay for a car up front and with cash, you’ll need to take out a car loan. Find one that doesn’t charge an application fee, offers low-interest rates and can be refinanced when necessary.

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Once you’ve found the right loan, applied for it, been approved and are ready to shop, set yourself a reminder on your phone or calendar to pay off the full amount each and every month. Payments can add up fast, and you don’t want to pay more than you have to when it comes to interest rates.

Find the perfect vehicle.

Now for the fun part: Use your price estimate to find the perfect vehicle for you. Shop around at local dealerships, online and around your neighborhood to find out how much new and used vehicles are going for.

Don’t be afraid to take a few weeks to do this. Dealerships often hold seasonal sales that are great for getting low introductory offers and warranty deals — and experts say you’re likely to find the best deal for new and used vehicles during the last few months of the year.

And do your due diligence when it comes to safety.  Look up the vehicle’s ranking in safety reports and check to see if there are any recalls you should know about. Check the National Highway Traffic Safety Administration and Insurance Institute for Highway Safety websites for more information.

If it’s a used car, look up its repair history on websites like Carfax and sees if there are any red flags you need to know about.

Whatever your dream car is — whether it’s a brand new car or a used SUV to take on road trips — Mountain America Credit Union has the guidance and low-rate auto loan to help you pursue it.