A $600 car payment isn't inherently too much, but it depends heavily on your income and total car costs; generally, it's considered affordable if it's under 10-15% of your take-home pay, but you should also budget for insurance, gas, and maintenance to keep total vehicle expenses under 20% of your income, as averages are now higher but personal budgets matter most.
As a rule of thumb, your car payment should not exceed 15% of your post-tax monthly pay. For example, if you make the U.S. median annual income of $62,1920 after taxes, you could shop for a car that costs up to $606 per month.
Absolutely. A credit score of 600 falls within the “fair” category, which means there are still many financing options available. However, you should be prepared for higher interest rates compared to someone with good or excellent credit.
Key takeaways. As a general guideline, your car loan payments should be less than 10 to 15 percent of your take-home pay each month. New and used vehicle prices have remained high over the last few years, and experts predict that they are unlikely to decrease significantly in the near future.
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. If that leaves you feeling you can afford only a beat-up jalopy, don't despair.
What car can I buy for $600 per month? A $30000 car has a monthly payment of $600 for 5 Years at a 7.42% interest rate. Check the payment with tax and tags. A $39219 car is $600 per month at 7.42% APR for 7 Years.
A $30,000 car payment varies, but expect roughly $450 to $600 per month for a 5-year loan, depending heavily on your interest rate (e.g., 5% vs. 8%), down payment, and loan term; a shorter term or higher rate means higher monthly costs, while a longer term or better rate lowers them. For instance, at 7% over 60 months, it's around $590-$600, but with a 5.74% rate for 60 months, it's closer to $576, or around $490 for 48 months.
Dave Ramsey's core car rules emphasize paying cash, avoiding new cars (unless you're a millionaire), keeping your total vehicle value under half your annual income, and using a strict budget, often suggesting the 20/4/10 rule (20% down, 4-year loan, 10% total car expenses) as a guideline if financing, but preferring no debt at all to avoid depreciating assets trapping you. He stresses buying reliable, used vehicles to prevent debt and build wealth.
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.
Aim to keep your car payment at or below 15% of your monthly income. For example, if your take-home pay is $6,000 per month, keep your car payment between $600 and $900 — or lower if you can manage it.
For a $20,000 car, a good down payment is at least $2,000 (10%) for a used car, but ideally $4,000 (20%), to reduce loan risk and lower monthly payments, though putting down as much as you comfortably can is always best to save on interest.
“Cars, trucks, RVs, boats, and everything that has motors and wheels go down in value,” Ramsey wrote recently. “NEVER finance them, because they go down in value and you get stuck in them. Don't let debt trap you in something that's losing value every day. Save up, pay cash, and own it outright.”
One rule of thumb is to spend no more than 10% of your take-home pay on a monthly car payment. So do the math. If your after-tax pay each month is $3,000, you might be able to afford a $300 car payment.
For around $60k, you can buy a brand new entry-level luxury SUV (like an Audi Q4/Q5, BMW X4, or Lexus RX), a premium sports car (Toyota GR Supra, BMW Z4, Cadillac CT5-V, Nissan Z), a well-equipped mainstream sedan/SUV (Genesis G80, Hyundai Palisade), or a performance-focused car like the Honda Civic Type R or VW Golf GTI, plus many great Certified Pre-Owned (CPO) luxury vehicles, offering a wide range of styles from reliable family haulers to thrilling weekend cars.
Start With Your Gross Income
So, if you make $50,000 before taxes per year, your car purchase price should not exceed $17,500.