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Questions and Answers
More than 15% of new vehicle buyers are signing on for car payments of over ______.
$1,000
Average car loan term in America is ______ months.
69
Lower credit scores are associated with longer car loan ______.
terms
The 2410 rule recommends a ______% down payment on a car to handle the loan over time.
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Many people will opt for a longer car loan term because it allows them to get their ______ car or a car that's out of their actual affordability budget
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So the person with a BMW and the Honda Civic that could be out at dinner talking about their car payments and it gets around that hey they pay the same amount for their car but the thing here is that the Honda Civic owner might feel bad about their choice because they're paying 550 a month but their ______ could be way shorter
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The 2410 Rule is a really reasonable rule but the fact is is that many people don't feel like it's reasonable because it doesn't get them the car that they really want there's a lot of societal pressures to actually buy a car that we can't ______
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Keep monthly car payments, including insurance and maintenance, less than 10% of gross monthly income
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Use a simple rule of dividing gross annual salary by 120 to determine the maximum monthly car payment you can afford
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______ a car may be beneficial if you want a new car every few years or prefer lower monthly payments
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______ a car makes more financial sense if you plan to own it for a long time
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Looking at this 2017 BMW X5 versus this 2017 Toyota 4Runner you can see that the total cash price for the BMW is actually cheaper than the Toyota but ends up costing you over 20,000 more dollars over that five year period to own because of ______, insurance, and repairs
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The average price paid for a new vehicle in October of 2022 in the United States was forty-eight thousand two hundred and eighty-one dollars. That means if we were using the more aggressive 35 rule the average gross salary of all these people that are buying these cars should be ______ dollars per year
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If you're able to afford a car using the 24/10 rule or the 25 rule, that's really amazing and you should feel really proud of that if you're planning on ______ a car
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Study Notes
Tips for Buying a Car: Affordability, Financing, and Saving Money
- Aim to keep monthly car payments, including insurance and maintenance, less than 10% of gross monthly income.
- Use a simple rule of dividing gross annual salary by 120 to determine the maximum monthly car payment you can afford.
- Example: A salary of $40,000 per year allows for a $333 car payment, while a salary of $150,000 per year allows for a $1,250 car payment.
- Consider the long-term financial impact of car payments on wealth accumulation.
- Leasing a car may be beneficial if you want a new car every few years or prefer lower monthly payments.
- Pros of leasing include low down payments, warranty coverage, and potential tax benefits for small business owners.
- Cons of leasing include mileage limits and the requirement to return or buy the car at the end of the lease term.
- Buying a car makes more financial sense if you plan to own it for a long time.
- Paying in cash may be advantageous for those who value not having a car payment or do not invest their cash.
- Financing a car allows for the opportunity to invest the cash and potentially earn higher returns.
- Tips for saving money when buying a car include comparing insurance rates, buying a used car, and choosing a car with lower maintenance costs.
- Switching car insurance providers can result in savings of $100 to $200 per month.
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Description
Test your knowledge on buying a car with this informative quiz! Learn tips on affordability, financing, and saving money to make the best decision for your next vehicle purchase. Discover how to calculate your maximum car payment, weigh the pros and cons of leasing, and explore strategies to save money throughout the process.
