What is a realistic monthly car payment?
Asked by: Miss Emilie Bauch | Last update: August 29, 2025Score: 4.9/5 (70 votes)
What is a reasonable monthly car payment?
Aim to spend no more than 10% of your monthly take-home pay on a car payment, but you may have flexibility. Many, or all, of the products featured on this page are from our advertising partners who compensate us when you take certain actions on our website or click to take an action on their website.
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 $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.
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.
ACCOUNTANT EXPLAINS How Much Car Can You Afford | Avoid becoming CAR POOR
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.
What is too high of a monthly car payment?
Here are some important points to consider when getting into car payments. So, When Is a Car Payment Too High? 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!
What is the car payment on a $60,000 car?
For example, if you're buying a $60,000 luxury car at 3% APR with no money down and paying it off over five years, you'll be responsible for paying about $1,078 per month.
Is $500 a month too much for a car?
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.
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 300 a month a lot for a car payment?
NerdWallet recommends spending no more than 10% of your take-home pay on your monthly auto loan payment. So if your after-tax pay each month is $3,000, you could afford a $300 car payment. Check if you can really afford the payment by depositing that amount into a savings account for a few months.
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 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.
Is a 72-month car payment bad?
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.
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 are the payments on a $30 000 car?
Payment Example: $30,000 at 6.24% APR* for 60 months equals $583.33/month.
What are the disadvantages of a large down payment on a car?
Disadvantages of a Larger Down Payment
The two biggest cons of making a down payment that's around 50 percent are: More money down doesn't lower your interest rate – Bad credit car buyers get higher than average interest rates, and it's extremely rare that a larger down payment can lower it.
Can I afford a 60k car if I make 60k 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.
How much should I spend on a car if I make $100,000?
50% of Your Income Across All Vehicles
Similarly, if your family earns $100,000 per year total, the total value of all of your vehicles shouldn't be worth more than $50,000.
Is there a way to lower car payments?
Refinancing allows you to replace your current loan with a new one and hopefully lower your car payment in the process. You may qualify for a lower interest rate — especially with a record of on-time payments — and be able to extend your loan term or both, enabling you to reduce your monthly payment.
What is considered a high car loan?
A high interest rate on a car loan is one that's above the national average. In the second quarter of 2024, the average rate was 6.84% for new cars and 12.01% for used cars, according to Experian's State of the Automotive Finance Market report.
What's a reasonable car payment?
A good rule of thumb is to spend no more than 10% of your take-home pay on a car loan payment when possible.
Is having no debt good?
Better savings potential: losing your monthly debt repayments gives you more money in your pocket. Interest paid on debts is often higher than interest earned on savings, so clearing your debts first boosts your savings potential and gives you extra cash for your financial goals.
What is the average car payment in America?
The average car payment for new vehicles in the U.S. was $735 a month in the first quarter of 2024, according to a recent report from LendingTree, which analyzed Experian data. The average payment on a used car was $523 a month.