If you’ve decided to purchase a car rather than lease one, the first thing you need to consider is what kind of car you need and what kind of car you can afford. If you’re planning to finance a car, some experts recommend spending no more than 10-20% of your gross income per month on your car – including all of the associated expenses: car payment, insurance, interest, parking, maintenance, fuel, etc. Based on this estimate, you can determine if financing a car is a good choice for you. If you’d prefer to spend your savings in one transaction and not worry about monthly payments, paying for a used car in full may be a better option for you. If you purchase a new car or even a gently used one, you will likely have to take out a loan to pay for the car.