When shopping for a car, what should you focus on instead of a budgeted payment?

Focusing on the overall cost of the vehicle when shopping for a car is crucial because it provides a comprehensive view of what you’ll ultimately pay over the entire term of the loan or lease. While monthly payments may seem manageable and budget-friendly, they can be misleading. A lower monthly payment might be associated with a longer loan term or higher interest rates, resulting in a greater total cost.

By concentrating on the overall cost, which includes the purchase price, interest, insurance, maintenance, and potential resale value, you can make more informed decisions that genuinely reflect your financial situation. This approach also helps to minimize the risk of overspending or getting trapped in a deal that may not be advantageous in the long run, ensuring that your investment is sound and aligns with your financial goals.