Determination usually is a good thing.
But that may not be true when you鈥檙e shopping for a vehicle if that determination results in a purchase with monthly payments you cannot afford to maintain.
With the average transaction price climbing toward $33,000 for a new vehicle and $17,000 for a pre-owned, or used, vehicle, it鈥檚 getting more difficult for shoppers to avoid such a trap.
And it doesn鈥檛 help if you鈥檙e inclined to focus on the car, truck or SUV rather than what it will cost you.
鈥淸Shoppers] are determined to buy all the car they want,鈥� said Michelle Krebs, a senior analyst at AutoTrader.com in a recent article, 鈥�10 things you鈥檒l pay more for in 2015,鈥� online at CNN Money. 鈥淎nd they are going to have all the bells and whistles on it.鈥�
But avoid it, you must, especially if you have bruised credit and must borrow to make the purchase.
More than 2.6 percent of the millions of vehicle purchasers who borrowed in the first quarter of 2014 had missed at least one car payment by November, according to an analysis of Equifax credit-reporting data performed by Moody鈥檚 Analytics and reported in The Wall Street Journal. And almost 8.5 percent of borrowers with weak credit scores had missed payments by November.
(Subprime borrowers account for about one-quarter of the nearly $1 trillion in auto loans annually, according to a recent report entitled 鈥淏ad carma鈥� in The Economist online.)
So, determine that you won鈥檛 be one of them by, yes, determining how much car you can afford.
That鈥檚 as easy as employing the 20/4/10 鈥渞ule鈥� suggested by many financial experts 鈥� 20 percent down, four years, no more than 10 percent of your gross income 鈥� then sticking to the result.
We provide details on how the 20/4/10 rule works and why you should use it in a recent blog post, Here鈥檚 the new car question you should ask yourself before buying.
If you can鈥檛 afford the payments on a loan using that rule, you probably can鈥檛 afford the vehicle and run an increased risk of missing a monthly payment or payments and becoming delinquent. And that鈥檚 about the last thing you want if you鈥檙e already dealing with bruised credit.
Channel your determination into finding the right vehicle at the right price to fit your income.
Then, when you鈥檙e ready to purchase that new or used car, truck or SUV, make sure you check out 国产黑料吃瓜泄密入口 Consumer USA, which provides indirect financing through 14,000 dealerships nationwide 鈥� ask for us among your financing options 鈥� or through purchase or lease programs or through SCUSA鈥檚 direct-to- consumer program.
