Financing and budget tips
No matter how good your credit score, buying a car can be a daunting task. And if you're a first time buyer, have a short credit history, or maybe even a few dings on your credit, it can be downright stressful. So we've gathered a few financing tips to make your car-buying experience as easy as possible.
Smart financing tips
Choose a car at a price that fits your budget.
Your Sales Consultant can help you determine what price range of cars will work for the monthly payment you are looking for. You can also get a car payment estimate with our financing calculators.
Maximize your down payment.
Increasing your down payment lowers your monthly payment and may improve your offer and chance of approval.
Provide accurate and thorough information on your application.
Estimate your trade.
Know how much equity you have in your current vehicle, if you’re planning on trading it in, to get a better understanding of your total purchase. If you're not sure, CarMax can give you a free appraisal of your current vehicle, and even contact your current financing company to help you determine your total equity.
Budget and affordability suggestions
If you're like most customers, you'll use some form of car financing to complete your vehicle purchase. The following information can help you determine what car payment you can afford each month, and how to use that to help with your vehicle selection.
Your monthly budget
Most financial institutions recommend that you spend no more than 15% of your gross monthly income (GMI) on your monthly vehicle payment. Examples:
- $2000 GMI = $300 or less per month
- $4000 GMI = $600 or less per month
Monthly payments normally range from $20 - $25 per $1,000 financed.