How to Budget for a Used Car

Is it time for an upgraded set of wheels, ready to elevate your travels near Daytona Beach, Palm Coast, New Smyrna, and Ormond Beach? Then visiting Daytona Toyota for a used vehicle is a great choice. Though shopping for a pre-owned model is exciting and is a great investment, to make sure that investment is sound, figuring out how much you can spend is a smart first step.

Below, our team has compiled a guide on how to budget for a used car. You’ll find helpful tips and methods to aid in preparing you for your automotive journey to ensure that whatever you choose will fit perfectly into your lifestyle. Let’s get started.

Budgeting for a Used Vehicle

When determining your used car allowance, there are a lot of things to consider. Payments will need to fit seamlessly into your already-acquired bills, so there are no issues or surprises in the future. This is where the 50-30-20 rule comes in handy.

When looking at your finances, an ideal situation should result in 50 percent of your income for your needs. This includes rent or mortgage payments, food, and transportation (your monthly car payment). Thirty percent should be set aside for wants like traveling, nights out, or leisure activities, and finally, 20 percent for savings.

Of course, this is a perfect-world situation. However, whether your financing falls into those categories or not, it’s clear that transportation is definitely a need. Now it’s time to find out how much you can spend.

How Much Should You Spend on a Used Vehicle

There is a great rule of thumb to go by when figuring out how much you can spend on a vehicle. Experts in the field say use no more than 20 percent of your monthly take-home pay (or 30 percent of your gross income) for a vehicle. This works itself into that 50 percent nicely, leaving 30 percent of your take-home pay for housing and food.

There are also other auto-related expenses that should fit into this 20 percent. Make sure you’re thinking about insurance, maintenance, gas, and parking costs and fitting them into your budget as well.

Here’s an example to put things into perspective. If your monthly paychecks equal $3,000.00 after taxes, a $300.00 monthly payment will be suitable. This includes what you’ll pay for the vehicle, as well as interest rates. This leaves $150.00 leftover for other auto expenses.

Get the Car You Want for Your Budget at Daytona Toyota

Now that you have figured out how to budget for a used car, head into our dealership today. Not only do we have a variety of reputable models to choose from, our team of finance professionals can help you budget even more and find a plan that works perfectly for you.

Drivers near Daytona Beach, Palm Coast, New Smyrna, and Ormond Beach are invited to schedule a test drive or appointment to speak to our finance department leads today. Happy car shopping!