Is $500 a month too much for a car?
Asked by: Alysa Lockman | Last update: May 4, 2025Score: 5/5 (67 votes)
What is considered a high monthly car payment?
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.
Is $500 a month for car insurance expensive?
A $500 monthly premium for car insurance is very expensive. The average cost of car insurance ranges from about $60 per month for state-minimum coverage to $166 per month for full coverage, though individual car insurance rates vary based on factors such as driving record, age and location.
What is a good monthly income for a car?
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.
What is a bad car payment?
According to experts, a car payment is too high if the car payment is more than 30% of your total income.
The Car Payment Pandemic is Too Much...
What is a fair monthly car payment?
The average monthly car payment for new cars is $737, while used cars had a slightly lower payment of $520. ( Experian)
Is $450 a month a lot for a car payment?
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.
Is $700 a month a lot for a car payment?
The Average Car Payment Is More Than $700: 4 Better Ways To Spend That Money.
What is the average car payment?
The average monthly car payment is $737 for new cars and $520 for used. Several factors determine your payment.
Why is my car insurance 450$?
Auto insurance premiums are determined by factors you can control — such as where you live, the type of car you drive and how much coverage you buy — and those you can't, such as your age or inflation. Poor credit can significantly raise your rates in many states, as can accidents or DUI violations.
How much is most car insurance a month?
Car insurance on average is $79.83 per month in low-cost states, $105.36 per month in medium-cost states, and $157.27 per month in high-cost states.
How much should my car payment be if I make $60000 a year?
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.
Is $1,000 a month a lot for a car payment?
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.
How much of income should go to a car?
The average new car cost $48,397 in September 2024, and the average used car was $25,361. It's generally recommended that you cap transportation expenses at 10% of your monthly income.
What is the 20 4 10 rule?
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.
What would the monthly payment be on a $30000 vehicle?
How much would a $30,000 car cost per month? This all depends on the sales tax, the down payment, the interest rate and the length of the loan. But just as a ballpark estimate, assuming $3,000 down, an interest rate of 5.8% and a 60-month loan, the monthly payment would be about $520.
Is $2000 a good down payment on a car?
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.
What's a good down payment on a 30k car?
As a general rule, you should pay 20 percent of the price of the vehicle as a down payment. That's because vehicles lose value, or depreciate, rapidly.
What is a typical monthly car allowance?
We have discovered that the average car allowance is about $600 per month in the US. Note, though, that this is only accessible to employees through tax-free car allowances. If the allowance is taxed, the figure is significantly reduced.
What is the rule of thumb for car payments?
The 20/4/10 Ratio for Car Financing
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.
Is it better to finance a car through a bank or dealership?
Your Interest Rate From A Bank May Be Lower.
However, dealers commonly raise the interest rate of the car loan they present to you, and pocket the extra money. For example, if a bank preapproved you for $40,000 with a 3% interest rate over 60 months, you'd pay $43,125 with $3,125 in interest over the life of the loan.
What is considered bad credit when buying a car?
Some auto lenders also heavily use an industry-specific FICO model that weighs certain factors, such as past car-loan payments. Its range is 250 to 900. The cut-off number that places a person in a “bad credit” tier differs by credit scoring model, but it's generally in the mid-600s or below.