So essentially yes $500 a month car payments is perfectly normal.
Your monthly auto loan payments should not exceed 10 to 15 percent of your pre-tax take-home salary. Due to increased vehicle incentives, drivers may find relief when shopping for a vehicle this year. To secure the best deal, work to improve your credit score and consider making a sizeable down payment.
$300 per month is not enough to own any car. The purchase itself would require months of savings, then insurance, fuel, tires, windshield wipers, brakes and maintenance would ultimately cost more than your income. Buy a bicycle or possibly a moped.
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.
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.
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.
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.
Because of the high interest rates and risk of going upside down, most experts agree that a 72-month loan isn't an ideal choice. Experts recommend that borrowers take out a shorter loan. And for an optimal interest rate, a loan term fewer than 60 months is a better way to go.
Financial experts recommend that your monthly payment should be around 10% to 15% of your monthly take-home pay. Additionally, your total monthly car expenses should be no more than 20% of your monthly income, and this includes your car payment, insurance, maintenance and gas.
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.
Over time, owning a car can be more cost-effective—but you'll also have to pay for repairs and upkeep. A lease may come with lower monthly payments than an auto loan, but you'll only be able to keep your car for a few years—and you'll typically also face mileage restrictions.
For large luxury models, $1,000-plus payments are the norm. Even a handful of buyers with subcompact cars have four-figure payments, likely due to having shorter loan terms, poor credit, and still owing money on previous car loans, according to Edmunds analysts.
We recommend you aim to spend about 10% of your take-home income on your monthly car payment. So, if you take home $3,000 each month after taxes, you might be comfortable having a vehicle with a monthly payment of around $300.
If you plan to finance your car purchase, follow the 20/4/10 rule: 20% down, loan no longer than 4 years, and keep total car payment – including insurance – to a maximum of 10% of your gross monthly income.
Compared to the median household income in the U.S, a $40,000 salary falls short, but it can contribute to the median household income when combined with a second income. A $40,000 salary translates to a monthly income of $3,333.33, a biweekly paycheck of $1,538.46, and a weekly income of $769.23.
If your gross salary is $60,000, your take-home monthly pay is probably around $3750, assuming about 25 percent of your pay goes toward taxes and other expenses. Based on a calculation of spending 10–15 percent of your monthly pay on a car loan, you should spend no more than $562.50 on your monthly car payment.
In the US a typical car allowance is somewhere between $500 and $700 per month, but as described in this article you should base the allowance on the expenses related to business driving, rather than a national estimate.
How much should you put down on a car? A down payment between 10 to 20 percent of the vehicle price is the general recommendation.
The number of new-vehicle buyers with payments of $1,000 or more is at an all-time high, according to Edmunds.com, a car-shopping website. In its fourth-quarter report, Edmunds found they represented 18.9 percent — or nearly 1 in 5 — of such borrowers.
Financial experts recommend that your monthly car payment be around 10% to 15% of your monthly take-home pay. Your total monthly car expenses, including your car payment, insurance, maintenance, and gas, should not exceed 20% of your monthly income.
Here's the deal: The car you can afford is the car you can pay for in cash. And as a general rule, the total value of all your vehicles combined shouldn't be more than half your annual income.