TexasAggie

I will be graduating from college this december and was planing to purchase a new car in January.
I was wondering what a reasonable amount of money is for financing and over what period of time.
Maybe some of you more experienced (and a little older) car buyers can share some advice.

Mark P

Depending how much you make, how much rent will cost, etc you will have to see what you can afford.

Ideally, you'd like to pay off the car as soon as possible so you don't pay as much in interest. There's no reason to put money in the bank, earning ~3% (savings), and then paying 7+% on the loan. But you don't want to be so aggressive that you can't afford your payments. Remember, you can always pay more than your scheduled payments.

Personally, I graduated last May, started working at the end of June, saved until my car showed up on Nov 4th, put down almost as much as I could (~$14K) and am paying back $500/mo for 36 mos.

TomAvant

in my opinion, I'd try to spend a little less so that you have more $$ for social things (trips, other fun stuff)....nothing wrong with a 5 or 6 year finance with audi's, there will still be some serious value left when you're done paying it off.........a 20K loan is like 400/mo for 5 years

Rodney

First off, do not go out and buy a new car the month after you graduate. Unless of course you absolutely need one (because you don't have one that runs) to commute to work, in which case buy something cheap (maybe a 1-2 year old carolla or civic) to get by with for a bit.

Why? The first thing you need to do is figure out what you can afford. That will take time (at least three months to establish an accurate monthly budget). During this time, try to save the amount you plan on using as a car payment each month in addition to your regularly monthly savings. This will help your budget to be more accurate, and allow you to build a larger downpayment.

How long should you finance? I wouldn't want to be tied to a car for more than 3-3.5 years tops. You wind up paying way too much for the car over the long run. Plus, remember that after 4 years or 50,000 miles (annual mileage will be hugely impacted by your commute) you'll be paying for service and repairs, and Audi service is NOT cheap. Not to mention that if you decide to trade it in, it'll be easier if you own it than if the dealer pays off your remaining balance.

av_audi

Good advice. Don't forget to include insurance and gas in your budget.