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**Simple interest loans** It's the most common type of car loan in use today. Each month, your payment first goes toward interest, and the remainder pays down the principal.

The most popular way to finance a car is usually a **personal loan or Personal Contract Purchase (PCP) car finance**.

The most common car loan terms are **24, 36, 48, 60, 72 and 84 months**, but some lenders also offer 12-month and 96-month car loans. While car loan terms are usually in 12-month increments, there are lenders willing to offer other options if needed by a borrower.

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.

**An affordable car payment would be one that doesn't exceed $600 a month**, based on the rule of thumb that your car payment shouldn't be more than 15% of your take-home pay. If you take out a 60-month car loan at 8% APR, you should aim to take out a car loan of less than $30,000.

Starting with the 1/10th guideline, created and pushed by Financial Samurai, this guideline states: buy a car in cash that costs less than 1/10th your gross annual pay. If you make $50,000 you should buy a car in cash worth $5000. If you make $100,000, the car you buy should be worth **no more than $10,000**.

How much should I spend on a car if I make $60,000? If your take-home pay is $60,000 per year, you should pay **no more than $750 per month** for a car, which totals 15% of your monthly take-home pay.

Consider putting **at least $6,000 down on a $30,000 car if you're buying it new or at least $3,000 if you're buying it used**. This follows the guidelines of a 20% down payment for a new car or a 10% down payment for a used car.

you comfortably afford under an 80 000 salary. a volkswagen golf gti audi a3 a toyota. avalon the kia stinger and the cadillac ct4.

The average monthly car payment for **new cars is $726**. The average monthly car payment for used cars is $533.

Provided the down payment is $5,000, the interest rate is 10%, and the loan length is **five years**, the monthly payment will be $531.18/month. With a $1,000 down payment and an interest rate of 20% with a five year loan, your monthly payment will be $768.32/month.

The longer your loan term — typically ranging from 24 to 84 months, or two to seven years — the cheaper your monthly payments will be. But remember, a lower monthly payment has drawbacks, including potentially costing you more over the long term. **For most drivers, a long-term car loan is not a good idea.**

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. You can learn more about car loans here.

- 'I'm a doctor at University Hospital. ' ...
- 'I'm looking for monthly payments of no more than $300. ' ...
- 'How much will I get for my trade-in? ' ...
- 'I'll be paying with cash,' or 'I've already secured financing. '

To apply this rule of thumb, budget for the following: **A 20% down payment**. **Repayment terms of four years or less**. Spending less than 10% of your monthly income on transportation costs.

Meaning: put 20% down, pay over 4 years (48 month finance), and spend no more than 10% of your income on car payments. So if you make $100,000, you can pay $10,000 per year on a car. That's after 20% down and should include insurance, gas, and maintenance. So, assuming you want a $100,000 car.

Financial experts answer this question by using a simple rule of thumb: Car buyers should spend **no more than 10% of their take-home pay on a car loan payment and no more than 20% for total car expenses**, which also includes things like gas, insurance, repairs and maintenance.

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. But if you can afford a larger down payment, you can save even more money on interest payments over the life of the loan.

Your credit score is crucial to determine your eligibility for a no down payment car loan. Most lenders require a FICO credit score of **at least 680** before you can qualify. If your credit score falls below 680, improve your credit score before you apply to help you qualify in the future.

Making a large down payment on a car may also **limit your financing or refinancing options**. Some lenders may not offer financing if you propose to make a down payment that the lender deems too large. You might not meet a lender's financing requirements if you're seeking to put 90% down on a vehicle that costs $25,000.

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.

**The average new car payment has just hit $700 a month**, with some paying $1,000. Some ways to lower that price. Remember just a few years ago when a car loan was $300 a month? Now, unless you put down a huge down payment, those days are gone forever.

Your salary is the primary factor in determining which auto loan is best for you. Edmunds recommends that a new car payment be no more than 15 percent of your monthly take-home pay. A used car payment should be no more than 10 percent, but that number varies by expert.