How Much Can You Really Afford to Spend On A Car?

Most people find a car and then re-arrange their budget to fit the car. That's a very expensive and budget-busting way to find a car. If you're smart, you let your budget determine what car you can buy.

Your budget is the boss

Based on your budget, you have an exact amount of money available to you right now to buy a car. That money is called Available Cash. It's made up of three things...

  • The cash your payment will buy you—Payments don't buy you a car; they buy you a lump sum of cash.
  • Any cash your trade-in may give you—After your old loan is paid off, of course.
  • Any other cash—You may have rebate money or savings, for instance.

Understanding Available Cash means you understand your budget.

Here's an example of Available Cash

Both of these sentences say the same thing. Which is the easiest to understand?

  1. “I drive a 2015 Ford Mustang convertible, I owe $13,050.57 on it, I've got a thousand in savings I want to pay down, and I want to pay $400 per month for 48 months on a new car.”
  2. “I have $27,000 in Available Cash.”

Knowing your Available Cash makes you a Cash Buyer

That's the easiest way to shop. Why? As long as you don't spend more than your Available Cash figure, you will always be on budget!

Want to know how much Available Cash your own budget will give you?

Use our Available Cash Calculator to determine your Available Cash.