Whether you decide to purchase or lease a vehicle, you have to make sure the vehicle you are looking at is affordable for someone in your current position. According to an article published by Business Insider, “Many personal finance experts suggest the 20-4-10 rule. It means you should have a 20 percent down payment on a car loan, borrow for no more than four years and make sure car payments are no more than 10 percent of your gross income.” Revisit your budget and see what repayment plan will work best.
According to USA Today, the average price of a new car in August 2013 was $31,252 (though it’s important to remember that you don’t have to buy a new car). Your ability to pay for a car, new or used, outright as a fresh college graduate is unlikely, so it’s important to understand the way car loans work.
You have a few options for obtaining financing for a car: