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Used Car Auto Financing in The Keystone State

Updated on August 8, 2011

Calculating Your Monthly Auto Finance Payment

Have you been planning to finance a car in Pennsylvania? Ask anyone who has ever taken on a car loan without thinking it through - it's all too easy to end up upside down. That means you owe more on your car than it's actually even worth. The problem is, few people were taught the fundamentals of auto financing. This isn't taught in high school or college, and certainly not on the dealer lot.

In general, costs connected to any vehicle should account for less than 18 to 20 percent of your income. If you've got, say, a yearly salary of $43,239 (the average in PA), you would be able to spend $649 to $721 a month.

Pennsylvania Auto Financing

The Pennsylvania Auto Financing Equation

Just remember, this includes more than simply your auto finance payment. To illustrate, car insurance costs Pennsylvania residents approximately $723 a year, or $60 monthly Let's say things such as gas and maintenance will set you back a further $100 per month. After we factor in these types of expenses, the average PA resident has around $561 to devote to paying back their Pennsylvania car loan monthly. Precisely what does this translate to when it comes to total price of the car or truck financed? The length of your auto loan will determine the car price you can afford. This is how much you could afford if you finance for...

  • 36 months: $20,183
  • 48 months: $26,911
  • 60 months: $33,639
  • 72 months: $40,367

But lest we forget, you need to think about your rate of interest. This is particularly true if you've got bad credit, since your annual percentage rate will be a good bit higher. You might be able to invest $40,367 spanning a 6 year period, but the accrued interest could constitute thousands of dollars of the total - up to $5000+ with a 6-7% interest rate. Imagine if you have a subprime rate of 12% or higher! The amount you pay in interest could be staggering. Although it may be tempting to get a 72 or 84 month auto loan because the payments will be so much lower (or, alternatively, the car will be so much nicer), longer-term auto financing options are not an intelligent choice. The longer you finance, the more you pay your lender.

What Was The Interest Rate on Your Last Auto Loan?

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