How much car can you afford?

Take a look at your budget and figure out how much money you’ve got left after the basic needs, from rent or mortgage and utilities to your 401(k). Come up with a monthly number and run it through an online calculator to see how much car that will get you. For example, $400 a month for 48 months will buy you a $25,000 car, assuming a $3,000 trade in, a $4,000 down payment, and a low interest rate. Never extend a car loan beyond 60 months: You run the risk of owing more than the car is worth.

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