BMW Financing 101: How to Budget for a New Car

Are you going to apply for BMW financing through our BMW finance center? If that’s your plan, you may want to hit the pause button for a moment and create a budget for your upcoming purchase. Having a budget in mind will help you avoid under or overspending on a new BMW vehicle. Learn more with the experts at BMW of Wesley Chapel.

How to Budget for a New BMW

Car Budget Guidelines

If you talk to the pros in our BMW finance center, you’ll learn that there are several useful guidelines when making a budget for an automobile. The first is the 10-15 percent guideline and the second is the 20/4/10 rule.

10-15 Percent Guideline

The 10-15 percent guideline says you should devote no more than 10-15 percent of your net income to the sum of your transportation expenses. In addition to your monthly loan or lease payment, those expenses include things like your fuel costs, auto insurance premiums, and maintenance and repair expenses.

Let’s say you net $8,000 per month. If you adhere to this guideline, you’ll have $800-$1,200 to spend on your cumulative automotive expenses every month. Of course, you may have to adjust the amount you spend if you have pre-existing debt obligations. On the flip side, you might be able to spend more if you have little to no debt.

10/4/20 Rule

Whether you want to buy a new BMW model or one of our pre-owned cars, you may want to follow the 10/4/20 rule instead of the guideline just discussed. According to this rule, you should:

  • Put at least 20 percent of a car’s purchase price down upfront
  • Take out an auto loan that has a term of four years or less
  • Have total transportation costs that absorb less than 10 percent of your income

Use Our Car Payment Calculator

Whichever guideline you choose to follow, it’s wise to use our car payment calculator when you’re budgeting for a new or previously owned automobile. Using our calculator will allow you to see how much your monthly payment will be, which is critical to creating a car budget that’s accurate regardless of the budgeting rule you use.

Visit BMW of Wesley Chapel for Financing Help

Do you need help making a budget for a new or pre-owned car? If so, you can count on our knowledgeable team for all the assistance you need. Contact or visit our Wesley Chapel, FL BMW dealership at your earliest convenience and let us get you behind the wheel of a BMW luxury car today!