How much can you really afford to spend on a car?

World

When it comes to buying a car, statistical evidence shows most buyers are doing a lot to lower monthly payments, like longer term loans.

“Last quarter, more people signed up for 72-month loans than they did for 60 month loans,” notes Matt Jones, a car buying advisor at Edmunds.com.

Jones says buyers aren’t taking the true cost of ownership into account.

“They’re forgetting the other costs that come with car ownership like gasoline or insurance or maintenance,” he says.

All of those can double or even triple the true costs and easily exceed Edmunds’ recommendation of spending no more than 15-percent of monthly take-home pay to own and operate a car.

“We actually like to advise people to spend that 15% to try to cover the whole of your car purchase, not just their payment,” Jones says. 

Read more: https://edmu.in/2qvYsli

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