How expensive a car can you afford? Find a car that would be affordable for you.


How expensive a car can you afford? Find a car that would be affordable for you.

How expensive a car can you afford? Find a car that would be affordable for you. When considering buying a car, the first thing to ask yourself is what kind of vehicle meets your expectations and won't financially burden you. Buying a car begins with mapping out your needs. Where do you need to drive daily, what is the annual mileage, who and how many people drive the car, where is the car parked? In addition to the comfort of the car, it is advisable to evaluate its safety. Once the needs are clear and there is a definite desire to buy a car, it is sensible to acquire an affordable vehicle. However, fitting a car into your monthly budget is not an easy task, and it is difficult to accurately define the affordability of a car. In addition to the cost of the car, running costs must be considered, which may soon make it clear that owning a car is expensive and a luxury that many cannot afford. To make it easier for you to understand how expensive a car you can afford, we have listed the main considerations to take into account before buying a car.

What is your budget for the car?

Develop an overall budget that you can spend on the car. The overall budget usually not only means how much you feel you can spend, but it is generally divided into the following:


  • What is the total amount you want to spend on the car?
  • How much free money do you have for a down payment?
  • How much can you afford to spend monthly on repayments?


First, estimate what could be the total amount that you could use to buy a car. The total cost of the car, without taking into account monthly running costs. Once you have thought about the total sum, review how much you have set aside and whether you can buy the car outright with the saved money, or if you need financing to buy the car.


If you find out you need financing, then next, calculate how much free money you have for the loan down payment. In some cases, a down payment is not necessary, but the amount of the down payment can help make monthly repayments smaller.


After the down payment amount is clear, calculate the monthly repayment amount that you can afford. Here, you definitely need to take into account interest rates, as they significantly affect the total cost, especially in the case of long-term loans.


What are the running costs of a car that need to be considered?


In addition to the costs associated with buying a car, it is necessary to take into account significant expenses for the ongoing costs of owning a car. Running costs usually include the following expenses, but other costs may also arise:


  • Fuel
  • Maintenance
  • Insurance


Taking all these costs into account adds up to quite a hefty sum, which should also be added to the budget every month. In addition, these can greatly affect the type of car you can afford.


To ensure that the monthly repayment amount and running costs are affordable, set aside the estimated amount for at least two months without using it. If you see that the given amount was not needed for essential expenses, then it is time to move forward with the car purchase.


If you have set a budget for buying a new car but can't find a suitable vehicle, let us know by writing to, we can help you in the search. Mogo has over 200 trusted vehicle sales partners across Estonia.