Budget around a car loan
Buying a Car August 2, 2019

How to budget around a car loan

It’s no question that Kiwis love their cars. With over 4 million vehicles on the road in New Zealand, we have one of the highest vehicle ownerships per capita in the world. They’re also a decent investment so it’s worth taking the time out to budget for a car in your life. Budgeting doesn’t have to be scary, we’ve got a few number crunching tips to help get your finances back on the road.

Car costs

As we all know, there’s more to the cost of a car than just the purchase price. It can help to consider and jot down each cost estimate so you’re well prepared. Costs to consider (monthly, or amend to suit your income cycle):

  • Car loan repayments
  • Petrol
  • Insurance
  • Registration
  • WoF (estimate)
  • Maintenance (estimate)

Car loan costs

There’s often plenty of finance jargon when applying for a car loan – interest rates, serviceability, terms, security, consolidating. But how much will you actually be paying? Here’s how your loan repayments are generally broken down:

  • Car purchase price
  • Interest rate
  • Any additional fees

The total amount of interest you pay will depend on your loan term, or the length of your loan. A shorter term will mean less total interest paid, but will require higher monthly repayments. A loan with Sprint has a fixed interest rate, so you’ll know how much your monthly repayments will be for your entire term – no nasty surprises. You can use our handy online calculator to work out your repayments, based on loan amount and credit rating.

Basic budgeting

Now that you know your car costs, you can put them into a basic general budget. The idea might sound overwhelming at first, but it will give you a clear view of your finances so you know exactly how much is coming and going. A budget is a great step towards getting ahead and becoming debt free.

A personal budget is simply a list of your income and expected expenses. Looking through recent bank statements will help you list all relevant expenses, but should include:

Living expenses
Rent or mortgage
Power and gas

Everyday expenses

Regular expenses
Car loan
Other loans
Sky / Netflix
Clubs / Memberships

Other expenses
Car maintenance
Car registration
Takeaways / Dining out

Clothing / Shoes
Hair / Beauty




Subscribe to Sprint Blog

Your Subscription is successful

Your Subscription failed