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How Much Car Can I Afford?

June 4, 2022

We all rely on a solid, safe, and functioning vehicle. At SeaWest, we know that you rely on your vehicle to get to work, transport the kids to school, go on weekend adventures, run errands, and so much more. You work hard and you should have a car that works for you.

If you’re considering purchasing a vehicle, you may be asking yourself, “How much car can I afford?” It’s a lot to think about – especially in today’s climate with rising prices and limited supply. Securing a loan with a reputable and reliable financial institution – like SeaWest – goes a long way.

Keep reading to learn more about how to determine how much car you can afford.

Your Budget

Just the thought of figuring out a monthly budget can make people nervous! But it’s an essential part of the planning process to make sure you stay on financial track.

Before you go to the dealership, you should take a look at your overall financial picture to determine how much of a monthly car payment you can afford. Be sure to examine any existing debt, financial obligations, need for an emergency fund, and your comfort level.

A car payment is a hefty portion of your monthly budget so you want to know as much about your situation as possible before even stepping into the dealership.

Monthly Payment

Bills, bills, bills. We all have them. So how do you keep them under control?

After you have determined your budget and have a general idea of how much car you can afford, you have to remember one thing: you’re not just buying a car. There are taxes, fees, fuel, insurance, repairs – the list goes on!

It’s conventional wisdom that consumers should aim to spend 10% to 15% of their monthly budget on transportation. That percentage includes the cost of all that goes along with owning a car, not simply making the purchase.

The average price of cars – used and new – is going up. At the end of 2021, the average cost of a new car was $47,000 while the average cost of a used vehicle was $27,000. SeaWest is proud to offer our Coast Guard members and their families access to comprehensive financing so don’t stress if those numbers seem high. They are! But we’re here to help.

The Variables

Nothing is as clear-cut as it may seem and the same goes for purchasing a car. Some variables can impact your monthly payments.

Interest Rate

Interest rate is the cost of borrowing money. With car loans, interest rate plus associated taxes and fees equal the Annual Percentage Rate (APR). You want to keep a close eye on this figure!

Lenders will determine your interest rate based on your credit history and score, income, existing debts, and other factors. SeaWest works with you to make sure you secure a loan that can keep you behind the wheel in the safest and most financially responsible way possible!

Our best APR for new cars is 1.96% and, depending on the age of the vehicle, the interest on used cars is between 2.36% and 5.99%.* As a credit union, we can look at your financial portfolio and situation and find the arrangement that works best for you.


The term is the length of time you borrow money. Most car loan terms range from 24 to 84 months. 

The loan term can impact the amount of interest you pay throughout your loan. You may think that spreading your loan payments out over the maximum number of months will make it easier to stay in control. While your monthly payments will be lower with this strategy, you will end up paying considerably more in interest. 

SeaWest helps you see the big picture so you know exactly the path to take.

Down Payment

The down payment of a car is the percentage of the cost you will pay at the time of purchase. If possible, you should aim to make a down payment of at least 20% on a new car and 10% on a used car.

If that percentage doesn’t work with your financial situation, try to put down as much as you can at the time of purchase. A larger down payment will lower your interest rate and monthly payments and help you stay on top of your loan payments.

Afford Your New Car With SeaWest!

SeaWest knows a reliable car is more than just a way to get around. It is something on which you and your family depend every single day. That’s why we love to work with you to get you and your family on the road.

SeaWest offers fixed rates based on credit rating and up to 100% financing with no down payment (with credit approval). As a Coast Guard family, you are committed to this country and we rely on you for your service. You should have a car you can rely on!

Now that you have an idea of how much car you can afford, how do you know if you should buy used or new? We can help with that too!


*Rates are subject to change without notice.

APR = Annual Percentage Rate. Your actual APR will be determined at the time of disbursement and will be based on your application including loan amount and term, and credit information. Rates quoted above are for the lowest possible rate available, which assumes excellent borrower credit history and the shortest term available for that loan program, i.e. the “Best Rate” for Pre-Owned Auto is currently 2.69% for a 36-month term. Rates vary with term.

Wondering about other money matters? Ask us a question!

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