Is a $600 car payment too much?

Asked by: Mr. Trace Abbott IV  |  Last update: February 9, 2022
Score: 4.6/5 (74 votes)

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. ... 60 months if you're buying a new car.

How much car payment is too much?

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.

Is 500 a lot for a car payment?

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.

Is a 700 car payment high?

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.

Is $800 too much for a car payment?

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.

I Make $2,000 a Month And I Have a $600 Car Payment

32 related questions found

What is a reasonable car payment?

Many financial experts recommend keeping total car costs below 15% to 20% of your take-home pay. ... For example, if your monthly paycheck is $3,000, your car payment would be about $300 and you'd plan on spending another $150 on automotive expenses.

Why is my monthly car payment so high?

Your monthly car payment serves to pay down the loan's principal, as well as interest and fees. The higher your interest rate, the higher your monthly payment will be. ... If you're carrying too much debt, the lender may decide to charge you a higher interest rate (or require a shorter loan term or a larger down payment).

What is the average car payment 2020?

Edmunds data for the same period in 2020 shows an average monthly payment of $437, representing a not-insignificant increase of $83 per month. It also shows that the average loan term has increased from 68.1 months to 70 months, meaning used car buyers are paying more over longer periods of time.

How much car can I afford on 50k salary?

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).

How do I get out of a high car payment?

If you're having a hard time making your monthly payments, here are some potential ways out.
  1. Consider Selling the Car. ...
  2. Negotiate With Your Lender. ...
  3. Refinance Your Auto Loan. ...
  4. Voluntarily Surrender the Vehicle.

Is 450 a month a lot for a car payment?

a car pyament should be no more than 10% of your take home pay. So unless you're taking home more than $4500/mo, $450 is too much for a car payment.

How much do you have to make to afford a 40k car?

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.

How much would monthly payments be on a $30000 car?

A $30,000 car, roughly $600 a month.

How can I lower my car payments?

5 ways to lower your car payment
  1. Talk to the lender. This strategy can be best for when you're having temporary trouble making payments. ...
  2. Refinance. ...
  3. Sell the car yourself (and buy a cheaper one) ...
  4. Trade it in to a dealership. ...
  5. Lease a car. ...
  6. Lower your amount financed. ...
  7. Shop for a low APR. ...
  8. Get a longer loan term.

Is 300 a month a lot for a car?

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.

What is the average car payment in 2021?

The average monthly payment for a new car rose to $636 in Q4 2021, up from $614 in Q3. Rise is due in part to luxury buyers shifting from leasing to financing.

Is 400 a month too much for a car?

For example, if you want to keep your new car payment to $400 per month, the dealer might easily get your payments within your budget. ... 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.

Will my car payment go down if I pay extra?

Paying extra on the principal won't lower your monthly car payment, but it does provide other benefits. ... Paying extra toward the principal won't lower your monthly car payment. It may save you money in the long run by shortening the loan.

How much should I spend on a car if I make $60000?

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.

Is 17 interest rate high for a car?

Consumers with credit scores below 601 tend to pay interest rates that are 17% or more for used cars, astronomically high interest rates that make cars harder to afford, and that make it more likely that a car will ultimately get repossessed.

Is 1000 dollars a good down payment for a car?

If you're looking to purchase a used car for around $10,000, then $1,000 is a decent down payment. It's widely advised to put down at least 10% of the vehicle's value to increase your odds of getting approved for a loan, and to minimize your interest charges.

Can you negotiate monthly car payment?

The biggest mistake when negotiating for a car is to focus on the monthly payments. There's nothing that will make a car salesman salivate more than a "payment buyer" - that's what they call these suckers.

Is 20000 too much for a car?

If you only earn $20,000 a year, it gives you a budget of $7,000. That's not a lot, but it's definitely enough to buy an older, yet still reliable, used car. ... That will buy a wide range of brand-new cars, including luxury models.

How much should you put down on a $12000 car?

“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.