Can I Afford to Buy a Car?

By Jennifer Tucker
April 18, 2023 | 2 Min. Read

Ready to get behind the wheel of a new car? Whether you have a specific vehicle in mind or you’re just researching your options, the first question you’ll probably ask yourself is, “How much car can I afford?”

A simple loan calculator can help you determine the cost of a loan and decide what you can afford. A car loan calculator will compute your monthly payments and total interest based on the purchase price, down payment, interest rate, and the number of monthly payments.

Marine Credit Union offers a variety of free budgeting and financial planning tools to help you on your lending journey, including a Car Loan Calculator and a Car Payment Calculator.

When it comes to financing a car, you have options. The most common ways that people fund the purchase of a new vehicle include:

An auto loan allows you to borrow money to buy a car when you don’t have the cash to make such a big purchase. When shopping for an auto loan, you will want to consider how the loan amount, the interest rate, and the loan term will affect your monthly payments and what you can afford.

Leasing a car is sort of like a long-term car rental. A lease will often require an upfront payment, then fixed monthly payments for a set period of time. This is similar to taking out an auto loan, except that when your lease expires, you will either return the car or choose to buy it (which may or may not require a loan to help you fund the purchase).

With a high enough credit limit, you can also buy a car with a credit card. There are some advantages to using a credit card to buy a car, but it can also be dangerous. Credit card interest rates are often high compared to auto loan financing rates. Plus, charging a car may use all or most of your available credit line—and impact your credit score.

It’s less common to buy a car with cash, but it has benefits. If you’re able to pay cash for a car, you’ll avoid a monthly car payment and avoid paying interest. You can also prevent getting into or adding to existing debt and it won’t impact your credit score or debt-to-income ratio.

Different goals call for different types of loans. When you’re looking for a car loan, we’ll find the right solution to meet your unique needs.

We don’t think anything should stand in the way of your dreams of ownership. If you’re ready to purchase a car, we’re ready to discover a way to make it possible.

Some lenders have rigid lending guidelines and qualifications that are tough to meet. If you’ve been told “no,” we can help you find the path to “yes.”

All loans subject to Marine’s approval process. Membership eligibility required. Federally insured by NCUA. Equal Housing Lender.