AskPatty's Car Buying Do’s and Don’ts 3: Do Know How Much You Can Afford!
The rule of thumb when buying a new car is to put about 20 percent down, try not to borrow for more than five years (60 months), and keep your monthly payment lower than 10 percent of your income. Don't forget to factor in such things as fuel costs and annual maintenance. If you know your average commute, you can figure out in advance what you are likely to spend on gas by comparing your mileage to the EPA Fuel Economy Estimates on the window sticker. Check websites like KBB.com to learn costs of ownership you won't be surprised down the road.