.jpg)
Buy With Confidence - Know What You Can Afford
Before you walk onto the lot or apply for financing, it’s important to know how much car you can truly afford. In 2025, car prices and interest rates are rising, so staying within your budget is more important than ever.
This guide will walk you through how lenders like NuFin evaluate affordability and how you can prepare to make a smart auto loan decision.
1. Use the 20/4/10 Rule
A common guideline is the 20/4/10 rule:
- Put down at least 20%
- Finance the car for no more than 4 years (48 months)
- Keep your monthly car expenses under 10% of your gross monthly income
At NuFin, we allow up to 48-month terms with flexible down payment options, but using this rule helps you stay financially balanced.
2. Understand Payment-to-Income (PTI) Ratio
PTI is a key metric lenders use to determine if you can afford a loan. It compares your estimated monthly auto payment to your gross monthly income.
Most lenders prefer a PTI below 15–20%. For example, if you earn $3,000 per month, your car payment should be no more than $450–$600.
3. Don’t Forget the Extras
When budgeting, include all auto-related expenses, not just your loan payment:
- Insurance
- Gas or charging costs
- Maintenance and repairs
- Registration and fees
These add up quickly and should be considered in your total budget.
4. Estimate Your Down Payment
A larger down payment reduces your loan amount and monthly cost. It also increases your approval odds.
Try to save at least 10–20% of the car’s total price. Some lenders, including NuFin, may work with lower down payments if other criteria are strong.
5. Consider Total Loan Amount, Not Just Monthly Payment
Don’t fall into the trap of stretching your loan just to geta lower monthly payment. You may pay more in interest over time.
Always look at the total loan cost, including interest, to understand the true price of the vehicle.
6. Get Pre-Qualified Without Impacting Your Credit
At NuFin, you can get pre-qualified without a credit pull. This helps you shop with confidence and stay within your means, before a dealership runs your credit.
NuFin Helps You Finance Smart and Drive Happy
Knowing how much car you can afford is the first step to asuccessful loan. NuFin provides tools and support to help customers makeinformed decisions and avoid overextending themselves.
Visit nufin.com/customers to get started today.
No SSN required. No credit pull. Just simple, smart auto financing tailored toyour needs.