What is a good monthly pay for a car?
Asked by: Annamae Wilderman II | Last update: September 10, 2025Score: 4.9/5 (43 votes)
How much should I pay for a car monthly?
There's no perfect formula for how much you can afford, but our short answer is that your new-car payment should be no more than 15% of your monthly take-home pay. If you're leasing or buying used, it should be no more than 10%.
What is a good monthly income for a car?
The general rule of thumb is that your car should cost no more than 15% of your take home pay. Note that I said take home pay. If you take home $5000 a month, that means your car loan, gas, maintenance, parking, etc. should be no more than $750 a month.
Is $700 a month a lot for a car?
$700 a month is a ridiculously high car payment when you make $2-3000 a month, but it is much more reasonable when you make $10000 a month. It is also so much about budgeting. I bought my house 11 years ago, so not only was my home much cheaper then, interest rates were also significantly lower.
Is $1000 a month a lot for a car payment?
$1000/mo is not normal and absolutely not normal. The last time I looked at the statistics for this, the average car loan term was five years and the average price was around $400/mo.
ACCOUNTANT EXPLAINS: How much car can you REALLY afford (By Salary)
What is a realistic monthly car payment?
The average monthly car payment for new cars is $737, while used cars had a slightly lower payment of $520. ( Experian) 42.96 percent of vehicles financed in the third quarter of 2024 were new vehicles.
What is the monthly payment on a $30000 car?
A $30,000 auto loan balance with an average interest rate of 5.0% paid over a 5 year term will have a monthly payment of $566. In total, the loan will cost $33,968 with $3,968 in interest.
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.
How much should I spend on a car if I make 3000 a month?
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.
What is considered a high car payment?
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.
Is paying monthly for a car a good idea?
Financing a car can be a good move if you don't have the cash to cover the cost of a vehicle or if you want to use your savings for other financial goals. However, the trade-off is that you will pay more in interest and be locked into a loan for an extended amount of time.
What is a really good monthly income?
While this figure can vary based on factors such as location, family size, and lifestyle preferences, a common range for a good monthly salary is between $6,000 and $8,333 for individuals.
Can I afford a 40k car?
To afford a car that costs $40,000, financial experts suggest that your annual income should be at least 2.5 times the purchase price.
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 car can I afford with a 60k salary?
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 for a car a lot?
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.
Is leasing a car a good idea?
Leasing helps protect you against unanticipated depreciation. If the market value of your car unexpectedly drops, your decision to lease will prove to be a wise financial move. If the leased car holds its value well, you can typically buy it at a good price at the end of the lease and keep it or decide to resell it.
Is $700 a month for a car alot?
The average car payment for new vehicles hit a record high of $738 a month in the fourth quarter of 2023, according to an analysis from LendingTree. If that's too rich for your blood, there are plenty of better ways to spend that money and still get around.
What is too high of a 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 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 a bad credit score for 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.
What is the average monthly car payment?
The average monthly car payment is $737 for new cars and $520 for used. Several factors determine your payment.
What are two reasons someone might purposely choose a higher monthly payment?
An increase in your monthly payment will reduce the amount of interest charges you will pay over the repayment period and may even shorten the number of months it will take to pay off the loan.
How do I pay off my car loan faster?
- Refinance your car loan.
- Make biweekly payments.
- Make extra lump-sum payments.
- Avoid or cancel add-on expenses.
- Adjust your budget.