If you make $75,000 per year, your total loan payments shouldn't exceed $2,250 per month. The 20/4/10 rule: Put down 20% on a car, finance the car for no more than 4 years, and keep your car payment less than or equal to 10% of your salary.
Finding the right car payment
If you take your annual income of $75,000 and divide it by 12 to get your monthly income, you'll come to $6,250. Now multiply that by 10% to get $625, as per the rule stated above. From this math, you shouldn't spend more than $625 on your monthly car note.
The 50% rule
Some experts believe that spending 50% of your salary on a vehicle should be affordable. With a salary of $75k this would give you $35,000 to spend on a car which is enough for a brand new car.
For many people, I think that will be between 10–15% of their income. So if you earn $25,000 a year, that's going to be a high-mileage used car for $2,500–$3,000. If you earn $80,000, that's a used car for around $10,000 or $12,000.
It's typically recommended that you buy a car worth no more than 35% of your gross annual income— so if you make $60k per year, you can afford a new car that is worth $21,000 or less.
So, theoretically, if your salary is $50,000 you could afford a car payment of $430 or less. With a $100,000 salary, you could afford a mortgage payment of no more than $2,500. For those with a salary near $30,000 your home, car, and debt combine should be no more than $1,250 per month.
2020 Hyundai Sonata. The 2020 Hyundai Sonata is one of the midsize cars you can afford if you pull down a $50K salary. With good credit, the $390 monthly payments are affordable for those in that salary range.
According to experts, a car payment is too high if the car payment is more than 30% of your total income. Remember, the car payment isn't your only car expense! Make sure to consider fuel and maintenance expenses. Make sure your car payment does not exceed 15%-20% of your total income.
Expert estimates range broadly. Greg McBride, a senior vice president, chief financial analyst at Bankrate.com, advises that a car payment should equal no more than 15 percent of your pretax monthly pay. That means that if you make $50,000 a year, your monthly car payment could be as much as $625.
Whether you're paying cash, leasing, or financing a car, your upper spending limit really shouldn't be a penny more than 35% of your gross annual income. That means if you make $36,000 a year, the car price shouldn't exceed $12,600. Make $60,000, and the car price should fall below $21,000.
According to Brown, you should spend between 28% to 36% of your take-home income on your housing payment. If you make $70,000 a year, your monthly take-home pay, including tax deductions, will be approximately $4,530.
How much should you spend on a car? If you're taking out a personal loan to pay for your car, it's a good idea to limit your car payments to between 10% and 15% of your take-home pay. If you take home $4,000 per month, you'd want your car payment to be no more than $400 to $600.
Financial experts generally recommend capping auto payments and related expenses at 10%–15% of monthly income.
“It's the single worst financial decision millennials will ever make.” That's because the moment you drive it off the lot, the vehicle starts to depreciate: Your car's value typically decreases 20 to 30 percent by the end of the first year and, in five years, it can lose 60 percent or more of its initial value.
Experts say your total car expenses, including monthly payments, insurance, gas and maintenance, should be about 20 percent of your take-home monthly pay. For non-math wizards, like me – Let's say your monthly paycheck is $4,000. Then a safe estimate for car expenses is $800 per month.
The result is that the car will be a lot more expensive in the end. In the example we've given, a car payment of $400 per month for five years (60 months) equates to $24,000. But the same $400 per month spread out over six years (72 months) is $28,800, while it's $33,600 over seven years (84 months).
The average monthly car payment was $644 for a new vehicle and $488 for used vehicles in the U.S. during the fourth quarter of 2021, according to Experian data. The average lease payment was $531 a month in the same period.
In case if you are speculating about how much personal loan can I get on a 50,000 salary, you can expect a loan amount of 13.50 lakhs to be sanctioned by Fullerton India. However, if you are deliberating on the loan amount with how much loan I can get on a 60,000 salary, the approved amount should be close to Rs.
Most of the millionaires surveyed said they never spent more than $65,000 on an automobile. Over 50 percent of these cars are American made with 3 in 10 millionaires driving a Ford F-150 pickup.
If you're trying to figure out just how much of a car that you can afford, then a good general rule of thumb is to spend around 35% of your annual income (before taxes).
The usual rule of thumb is that you can afford a mortgage two to 2.5 times your annual income. That's a $120,000 to $150,000 mortgage at $60,000.
Average monthly car payment
By the beginning of 2022, the U.S. saw the nationwide average car payment reach $648 for new vehicles. This was a 12.31% increase from the previous year — and it will likely continue to inflate further due to rising average car prices and the overall rise of inflation.
The pandemic and resulting supply-chain issues, inflation, rising interest rates all play a part. Depending on whom you ask, the average car buyer in the U.S. is paying $657 (Edmunds.com) or $712 (Moody's) a month for their new vehicles.