Assumptions Used in This Article
One spouse has purchased a 2003 Toyota Tundra Truck with 4dr Access Cab SR5 4WD SB (4.7L 8cyl 4A) at a base price of $26,775, plus a Premium 3-in-1 Combo Radio w/CD Changer for $490, and an off-road package for $1,005, for a total price new of $28,270. The other spouse has purchased a 2003 Nissan Altima 3.5 SE 4dr Sedan (3.5L 6cyl 4A) with a base price of $23,149, plus a sports package (power sunroof and rear spoiler) for $1,249, for a total of $24,398. These car prices are close to the average car price paid in 2002.
You have excellent and substantial credit, and qualify for a low interest rate of 4.5% (your credit score affects your interest rate). Your car loans are for five years and assume you paid $1,000 down on each car, resulting in payments of $436 for the Nissan Altima and $508 for the Toyota Tundra.
If you buy a two-year old Nissan Altima instead of a new one, the average price will be around $10,400 instead of $24,398 and your monthly payment will be around $183 at 6.3% interest and $1,000 down (rates on used cars are generally somewhat higher than rates on new cars).
If your spouse buys a two-year old Toyota Tundra truck instead of a new one, for $19,000 instead of $28,270 (Toyotas don't depreciate as quickly as American cars), your monthly payment will be around $350 at 6.3% interest and $1,000 down.
Your property taxes are $2,000 per year, or $166 per month and your homeowner's insurance is $300, or $25 per month. You can't make a down payment equal to 20% of the value of the house you're buying, so you'll also have to pay private mortgage insurance, estimated at $45 per month.
