How much car can I afford? Here's how to calculate

The video tutorial emphasizes the importance of budgeting before purchasing a car to avoid buyer's remorse. It explains how to assess your financial situation, calculate your debt-to-income ratio, and apply the 2410 rule for a successful car purchase. The tutorial also covers estimating the total cost of car ownership, including initial and ongoing expenses. It advises on budgeting strategies, financing options, and the potential benefits of saving for a larger down payment or considering leasing. The tutorial warns against extended loans due to higher interest costs and encourages exploring multiple financing options to secure the best deal.

What is the purpose of calculating your debt-to-income ratio before buying a car?

• To determine your credit score

• To find out how much you can afford to spend

• To calculate your monthly savings

• To estimate your annual income

According to the 2410 rule, what percentage of your income should be used for car-related expenses?

• 20%

• 15%

• 5%

• 10%

What is the recommended down payment percentage when purchasing a car as per the 2410 rule?

• 20%

• 25%

• 15%

• 10%

Why should you be cautious about extended car loans?

• They are not available for used cars

• They increase the total interest paid over time

• They have higher monthly payments

• They require a larger down payment

What is a potential benefit of delaying a car purchase to save for a larger down payment?

• It eliminates the need for insurance

• It increases the loan term

• It reduces the monthly loan payments

• It allows for a higher interest rate