$450 per month for a car payment would generally be considered quite high. Most financial experts recommend keeping your monthly car payment to no more than 10-15% of your monthly take-home pay. Whether $450 is too much depends on your individual financial situation and income level.
The Bottom Line. Your car insurance premiums are based on factors like your age, driving record, location, and vehicle. If they seem high to you, ask your insurer about discounts or other ways to save money. You can also shop around to see whether you can find comparable coverage at a lower rate with another insurer.
Here are some considerations: Income: A common rule of thumb is that your car payment should not exceed 15% of your monthly take-home pay. For example, if you take home $3500 a month, a $500 payment would be about 14%, which is generally considered acceptable.
Personal Budget: Ensure that the payment fits comfortably within your budget without stretching your finances too thin. In summary, $400 a month can be reasonable for some vehicles but may be high or low depending on the specific circumstances.
The average monthly car payment is $737 for new cars and $520 for used. Several factors determine your payment.
Here are some important points to consider when getting into car payments. So, When Is a Car Payment Too High? 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!
Those will become part of your budget. The 50-30-20 rule recommends putting 50% of your money toward needs, 30% toward wants, and 20% toward savings. The savings category also includes money you will need to realize your future goals.
Most Affordable Cars in SA
For instance, the Suzuki S-Presso offers a monthly instalment of R3,018 over 72 months, making it an attractive option for those on a tight budget. The Renault Kwid 1.0l Expression 5-dr ABS is another contender, with a monthly instalment of R3,353 over 72 months.
Car accidents and traffic violations are common explanations for an insurance rate increase, but other reasons why your car insurance rate can go up include changing your address, adding a new vehicle or driver, increases to claims in your ZIP code, and increases to car repair/replacement cost.
Geico has some of the lowest rates in the industry for full coverage car insurance, even for drivers with bad credit, speeding tickets, accidents and other risk factors. And unlike other affordable options like USAA and Auto-Owners, Geico is available in all 50 states.
Financial experts recommend spending no more than 10% of your monthly take-home pay on your car payment and no more than 15% to 20% on total car costs such as gas, insurance and maintenance as well as the payment.
The rule recommends making a 20% down payment on the car, taking four years to return the money to the lender, and keeping transportation costs at no more than 10% of your monthly income. As to how exactly it works requires some explanation.
A person making $60,000 per year can afford about a $40,000 car based on calculating 15% of their monthly take-home pay and a 20% down payment on the car of $7,900. However, every person's finances are different and you might find that a car payment of approximately $600 per month is not affordable for you.
While this figure can vary based on factors such as location, family size, and lifestyle preferences, a common range for a good monthly salary is between $6,000 and $8,333 for individuals.
Here's an example: If you make $3,000 each month after taxes, $1,500 should go toward necessities, $900 for wants and $600 for savings and debt paydown. Find out how this budgeting approach applies to your money.
By age 30, you should have saved about $52,000, assuming you're earning a relatively average salary. This target number is based on the rule of thumb you should aim to have about one year's salary saved by the time you're entering your fourth decade.
If you have a $700 student loan repayment every month, you can reasonably spend about $450 each month on a car payment. Keeping all of your debt repayments to less than a third of your monthly income is what most personal finance experts recommend.
It depends on how much income you have after your bills and expenses. But as a rule of thumb, your car payment should not exceed 15% of your post-tax monthly pay. For example, if after taxes, you make the U.S. median income of $37,773, you could shop for a car that costs up to $472 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.
The average car payment for new vehicles hit a record high of $738 a month in the fourth quarter of 2023, according to an analysis from LendingTree. If that's too rich for your blood, there are plenty of better ways to spend that money and still get around.