Buying a vehicle

Vehicle affordability

Whether you choose to buy a new or used car or other vehicle, you want to determine how much of a car you can afford.

Buying a car means having to pay for it in one of several ways. You can pay cash, take out a loan, or lease a vehicle. You may also trade in the vehicle (called a trade-in) you currently own to the auto dealer, who will assign a trade-in value and apply it toward the purchase price of the replacement car. Generally, the dealer bases the trade-in value on the vehicle's blue-book value.

Even if you trade in your vehicle, a dealer or other lender may still require you to make a cash down payment, depending on your credit history and their willingness to bargain.

The following calculator helps you to calculate an estimated vehicle-purchase amount that you may be able to afford. You enter an amount that you feel you can afford to pay monthly, as well as a given trade-in value, down payment and loan terms. The calculator also lets you enter the amount of any rebates the auto dealer or maker offers:

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