Avoid Getting in Over Your Head. Know before you shop.

Consumers usually spend more money on cars than they can actually afford. If your monthly car payments are taking a big bite of your paycheck, you may want rethink your approach on the steps you take in buying a new car.

The first step in buying a new car should be to know what you can afford to spend in advance of shopping for the car.

• How much of a down payment can afford? In other words, how much money can you pay up front in cash, with a trade-in, or both?
• What can you afford for a monthly car payment? If you plan to borrow money or to lease, what is the maximum monthly car payment you can afford?
• Do the math before you shop.  Figuring out how much you can afford before you go car shopping can prevent you from getting in over your head when you buy a new car.

Use Achieve Financial's Car Loan Calculator to help you work out the amount you can afford to spend. Our calculator will help you determine your car loan payment based on your purchase price or find out how much you can buy based on your monthly payment.

After you have entered your information, use the graph options to see how different loan terms or down payments can impact your monthly payment. You can also examine your complete amortization schedule by clicking on the "View Report" button.

While it may be possible to find an auto loan that requires a low down payment from a dealer, it is best to put down as much as you can afford—to minimize your overall cost for the loan.

A larger down payment reduces the amount of money you need to borrow, which lowers your monthly payments and reduces the amount of interest you’ll pay overall.

A down payment can include: cash, any trade-in allowance the dealer gives you for your existing car, or  cash rebates the dealer may have in effect at the time you are looking to purchase a new car.

By knowing your down payment and how much you can afford to pay for your monthly payment, you can calculate the price of the car to buy. It’s worth the time it takes to figure this out so you can stay within your budget.

Call an Achieve Financial Representative at 860.828.2790 option 2, to see what rate you qualify for or check the credit union’s auto loan rates online to get started.

When figuring out what you can afford, make sure to include sales tax, registration fees and insurance premiums to your budget.

Once you know how much you can afford to spend, you will have more confidence to purchase a car that won’t break your budget.