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How much you should spend on a car is all about your annual income and monthly budget. Financial experts say to not spend **more than 35% of your annual income on the car** itself and the costs that come with your purchase.

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.

NerdWallet recommends spending **no more than 10% of your take-home pay on your monthly auto loan payment**. So if your after-tax pay each month is $3,000, you could afford a $300 car payment. It's important to be realistic about how long you can or want to be making this monthly payment.

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.

The frugal rule: **10% of income**

For many people, I think that will be between 10–15% of your 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.

“A typical down payment is usually between 10% and 20% of the total price. On a $12,000 car loan, that would be **between $1,200 and $2,400**. When it comes to the down payment, the more you put down, the better off you will be in the long run because this reduces the amount you will pay for the car in the end.

With no other bills, you can afford a $40k car with a yearly income of **$12,000**. But if you do have other bills ( ie wife and children and a mortgage and student loans) then consider your bills and decide if you can afford a new car. In my opinion it would be insane to spend more than 10% of your wealth on a car.

What is the 50-20-30 rule? The 50-20-30 rule is a money management technique that divides your paycheck into three categories: **50% for the essentials, 20% for savings and 30% for everything else**.

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.

Rather than looking at monthly transportation costs, Dave recommends buying cars **that cost no more than 50% of your annual income**. So if you make $50,000 a year, you should not spend more than $25,000 for a car(s).

Ergo, **buying a car is a waste of money**. While it is true that once a car is registered for the first time, it becomes a used car and is worth less money, very few people buy a new car and immediately sell it. If you keep a car for a number of years, the depreciation will even out with time.

They understand that cars are depreciating assets, especially brand new ones. 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.

One rule of thumb involves dividing your pretax earnings by 40. This means that if you make $100,000 a year, you should be able to afford **$2,500 per month in rent**. Another rule of thumb is the 30% rule.

The reason: **New cars depreciate as soon** as buyers drive them off the lot. When you buy a used car, paying in cash also brings more savings on the offer price most times. That is, except pick-up trucks, which retain their value.

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.

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**.

When browsing your options, keep in mind that financial experts will typically tell you to spend **less than 10% of your monthly take-home pay** on your car payment. That means if your take-home pay is $3,000 a month, plan to spend no more than $300 on your car payment.

A good starting point is your budget. Experts say your total car expenses, including monthly payments, insurance, gas and maintenance, should be about 20 percent of your take-home monthly pay. ... Then a safe estimate for car expenses is **$800 per month**.

Many sources recommend saving **20% of your income every month**. According to the popular 50/30/20 rule, you should reserve 50% of your budget for essentials like rent and food, 30% for discretionary spending, and at least 20% for savings.

The Rule of 72 is a calculation that **estimates the number of years it takes to double your money at a specified rate of return**. If, for example, your account earns 4 percent, divide 72 by 4 to get the number of years it will take for your money to double. In this case, 18 years.

If you choose a 70 20 10 budget, you would **allocate 70% of your monthly income to spending, 20% to saving, and 10% to giving**. (Debt payoff may be included in or replace the “giving” category if that applies to you.) Let's break down how the 70-20-10 budget could work for your life.

A $500 car payment is **about average right now**. The concept of “too much” is going to depend on your income and living expenses, your insurance expense, and other budget factors.

First unveiled at the NAMPO agricultural show in 2017, **the Bajaj Qute** has set social media alight more recently with stories, memes, jokes and videos about this compact little 'car'. The story goes that you can buy it for only R5 000, that it will only cost you R150 per month and that you can insure it for only R1. 20.

Is a $700 car payment too much? - Quora. Yes and **no**. If you are buying an expensive car and you can afford the payments that's normal. But if your buying a cheaper vehicle then yes that would be pretty high payments.