Can You Afford That New Car? | Tips and Advice | Edmunds

Can You Afford a New Car? How to Determine Your Ownership Costs

Edmunds senior consumer advice editors Matt Jones and Ron Montoya explain the hidden costs of car ownership and help you answer the question: Can I really afford this car or truck?

Matt: Hi, I'm Matt, and this is Ron. We are the senior consumer advice editors here at Edmunds.

I was driving one of the trucks from our fleet and went to fill the tank. It cost $125! That made me think — how much does it cost to operate this vehicle on a monthly basis? So I did some calculations based on typical transaction costs — what it costs to buy and insure the car — and fuel habits. I came up with a total monthly cost of close to $1,300 once insurance, fuel and upkeep were factored in.

Ron: Yeah, this happens to a lot of people. We get so focused on whether we can afford the monthly payment that we forget to look at the other costs of car ownership.

In some cases, when you look at what you're spending on gas and insurance, you are effectively doubling your monthly payment. This is important to keep in mind when you're applying for a loan: Just because you're approved for a car with a $500 monthly payment doesn't mean you can afford it.

Take a look at our True Cost to Own tool to see what these numbers may be for your next car:

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