 TITLE: How to Choose the Right Car Payment CONTENT: Figure Out How Much You Can Afford\n----------------------------------\nStart by assessing your monthly income and expenses. It's especially important to consider your debt payments, such as mortgage payments, student loan payments and credit card payments. Lenders will look at the ratio of your total monthly debt obligations to your total monthly income when deciding whether to approve you for an auto loan. Ideally, your debt should be below 40% of your monthly income. Learn how to calculate your debt-to-income ratio.\nIf your debt-to-income ratio is in good shape, assess the rest of your monthly expenses to see how much you can spend on your car. In addition to the car payment itself, be sure to consider the other expenses of owning a car, such as insurance, repairs and gas. In general, your monthly car expenses shouldn't exceed 20% of your monthly net pay.\nIf you need to free up more money for a car payment, think of ways to reduce both fixed expenses (like your utilities and rent) and variable expenses (like groceries or online subscriptions). Get more tips on how to make a budget to understand where you might cut back to help fund your car payment. END