Most car shoppers have an idea of what they can afford when it comes to getting a new or used car. There are basically two different ways people consider how much they can spend on a new or used car. Some people think in terms of the basic cash price, while others think of an approximate monthly payment. Both of these methods have some disadvantages.

If you think in terms of the basic cash price, you need to remember there is more to buying a vehicle than the initial cost. Such things as insurance, fuel and maintenance cost should be taken into consideration as well. Most generally a newer car means higher insurance premiums and maintenance on cars these days can be pretty expensive. Depending on what kind of car that you are interested in buying, you may get less gas mileage, which means you spend more on fuel as well. These are just some of the expenses that you will and/or may incur once you purchase the vehicle, so you need to take this into consideration also.