What's the average car payment?

Asked by: Mrs. Theresia Barton  |  Last update: September 22, 2022
Score: 5/5 (25 votes)

The average monthly car payment is $648 for new cars and $503 for used. Several factors determine your payment.

What is a good monthly payment for a car?

Greg McBride, a senior vice president, chief financial analyst at Bankrate.com, advises that a car payment should equal no more than 15 percent of your pretax monthly pay. That means that if you make $50,000 a year, your monthly car payment could be as much as $625.

Is a $600 car payment 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.

What is the average monthly new car payment?

The average car payment in the US climbed to a record $712 a month in June as borrowing costs increase.

Is $500 a month a lot for a car payment?

The average new car payment in America has crept above the $500 per month mark for the fist time, settling in at $503, according to a recent study by Experian. And if that weren't bad enough, the average length of a car loan now stands at 68 months.

Average Monthly Car Payments Reach ALL TIME HIGHS!

33 related questions found

Is 400 a month for a car good?

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.

Is 900 a month too much for a car?

Experts say your total car expenses, including monthly payments, insurance, gas and maintenance, should be about 20 percent of your take-home monthly pay. For non-math wizards, like me – Let's say your monthly paycheck is $4,000. Then a safe estimate for car expenses is $800 per month.

What car can I afford with my salary?

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.

How much should you spend on a first car?

Experts recommend that you spend $5,000 to $10,000 on your first car. But honestly, it all comes down to what you can afford. Here are a few simple tips to help you calculate a figure that would work well for you: Don't spend more than 15% of your gross pay or 20% of your take-home pay.

Can I afford a 50k car?

How much car can I afford if I make $50,000? While it depends on factors like your credit score, loan terms, down payment and any potential trade-in value, you may find that a vehicle in the $20,000 to $35,000 range will fit your budget.

Are cars a waste of money?

It's the single worst financial decision millennials will ever make.” That's because the moment you drive it off the lot, the vehicle starts to depreciate: Your car's value typically decreases 20 to 30 percent by the end of the first year and, in five years, it can lose 60 percent or more of its initial value.

How much is too much for a car?

Financial experts say to not spend more than 35% of your annual income on the car itself and the costs that come with your purchase. Below you'll find a breakdown of what to consider when buying a new or used car and how much you should spend.

How can I afford a car at 16?

One easy way to purchase a car as a 16-year-old is to create a note between yourself and a family member. In exchange for making monthly payments toward a purchase price, the seller offers you the car. This concept is similar to getting a loan from a bank for your car and making monthly payments.

What is considered a cheap car?

Auto experts say the lowest price for a reliable used car is about $2,500. But they're quick to note that every additional $1,000 in your budget will allow you to get a newer car that's been driven fewer miles.

How can I save for a car at 16?

Bringing it home: How to save for a car as a teenager
  1. Set a savings Goal.
  2. Find a renewable source of income.
  3. Avoid needless spending.
  4. Find additional sources of income when possible.
  5. Buy your car.

How much would a 30000 car cost per month?

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

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

It's typically recommended that you buy a car worth no more than 35% of your gross annual income— so if you make $60k per year, you can afford a new car that is worth $21,000 or less.

How much should I spend on a car if I make $100000?

To find out how much car you can afford with this 36% rule, simply multiply your family's income by 0.36. So if you earn $100,000, for example, you could afford to take out a car loan of up to $36,000 — assuming you don't have any other debt.

How do I know if I can afford a car?

Financial experts say your car-related expenses shouldn't exceed 20% of your monthly take-home pay. So, let's say you bring home about $2,500 each month. The total amount you should spend on your car — including loan payment, gas, insurance and maintenance — is right around $500.

Is it better to pay car in full or monthly?

Paying cash for your car may be your best option if the interest rate you earn on your savings is lower than the after-tax cost of borrowing. However, keep in mind that while you do free up your monthly budget by eliminating a car payment, you may also have depleted your emergency savings to do so.

Are car payments worth it?

Financing a car may be a good idea when: You want to drive a newer car you'd be unable to save up enough cash for in a reasonable amount of time. The interest rate is low, so the extra costs won't add much to the overall cost of the vehicle. The regular payments won't add stress to your current or upcoming budget.

How can I afford a new car?

Here's how to buy a car without getting over your head in debt or paying more than you have to.
  1. Get preapproved for a loan before you set foot in a dealer's lot. ...
  2. Keep it simple at the dealership. ...
  3. Don't buy any add-ons at the dealership. ...
  4. Beware longer-term six- or seven-year car loans. ...
  5. Don't buy too much car.

Why are car payments so high?

Brian Moody, executive editor for Kelley Blue Book, told ABC News that a low supply of cars and high demand from buyers means consumers "are going to be paying more" than the MSRP.

How old should my first car be?

This is why we recommend that you go for a model that's as close to new as you can afford, and anything less than three years old will be almost as good as getting a brand new car in most cases - a number of models could even have some manufacturer warranty remaining for extra peace of mind.

How much money should I save up for my first car?

You'll need to save a whole lot. Most financing requires at least 20% down. So if you are buying an average car at around $30,000, you'll need to come up with at least $6,000.