 TITLE: Buying a Car: How Much Can You Afford? CONTENT: What Car Payment Can You Afford?\n--------------------------------\nGenerally, financial experts recommend keeping your monthly auto payment at or below 10% of your take-home pay. That's a good rule of thumb to get an idea of what to aim for, but it's crucial that you take a look at your own budget to get the right number.\nIf you already have a car payment, simply replacing it with an equal or lower monthly payment may be enough. But if you don't or you're looking at a pricier vehicle, you'll want to look at your income and expenses to determine what is the right car payment amount for your budget.\nIf your take-home pay or your expenses fluctuate from month to month, consider looking back on the last three to six months to see how much cash you have available to put toward a car payment.\nAlso, consider your other debts. If a significant portion of your monthly income goes toward debt, adding a car loan to the mix could make it challenging to get approved for credit in the future. That's especially the case if you're hoping to buy a house. Knowing your debt-to-income ratio and how it affects you can help you determine how much you can afford.\nIt's also important to look at the loan amount instead of focusing solely on the car payment, because the longer you're making payments, the more you'll pay in interest.\nFinally, keep in mind that you can reduce your monthly payment by making a down payment on the loan. The more money you put down, the less you need to borrow, giving you a more affordable monthly payment. END