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.

Is $500 a month car payment a lot?

The average monthly car payment is now a record $733, according to Edmunds. And even if your monthly auto loan payments are around $500 per month, that still may be uncomfortably high. And that's before adding up the cost of maintenance, fuel, and auto insurance.

Is $500 a month good for a car?

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.

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.

What is a good amount to pay a month for a car?

In general, it's recommended to spend no more than 10% to 15% of your monthly take-home income on your car payment, and no more than 20% on your total vehicle expenses, including insurance and registration. Read on to learn how you can determine how much car you can afford based on your financial situation.

I Make $2,000 a Month And I Have a $600 Car Payment

Can I afford a $500 car payment?

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's the average car payment in 2023?

The average car payment for a new vehicle is $726 monthly, according to third-quarter 2023 data from Experian — up 3.6% year over year. Meanwhile, new lease payments average $597 (up 4.6%). With the lowest jump at 0.8%, used cars have the lowest average monthly payment at $533.

Is $600 car payment too much?

According to Consumer Reports, the average monthly payment on a new car loan is $600 — up 25% in the last 10 years. A payment that high can make a serious dent in your budget. Here are some tips to help keep your payments as low as possible.

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. Remember, the car payment isn't your only car expense! Make sure to consider fuel and maintenance expenses.

Is $1,000 a month car payment too much?

But what's worrisome is that other buyers with $1,000-plus monthly payments are spending more than they can really afford, putting themselves at risk of being underwater on their loans and in a tight spot if they have to sell.

How much is a $600 car payment?

Top 5 Car Prices for a $600 Payment

A $39219 car is $600 per month at 7.42% APR for 7 Years. A $34780 car is $600 per month at 7.42% APR for 6 Years. A $30000 car is $600 per month at 7.42% APR for 5 Years. A $24853 car is $600 per month at 7.42% APR for 4 Years.

How much is a $30,000 car monthly?

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.

How much is a $20,000 car payment?

For instance, using our loan calculator, if you buy a $20,000 vehicle at 5% APR for 60 months the monthly payment would be $377.42 and you would pay $2,645.48 in interest.

Is $750 a high car payment?

But no matter the reason for your $750 monthly car payment, the reality is that it's a lot of money. And if you're going from having no car payment to a payment of $750 a month, it could really constitute a shock to your finances. Here are a few steps you can take to cope with such a large car payment.

Is $700 a month a lot for a car?

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.

Is 450 a month a lot for a car?

This means that if a person earns $3,000 per month, a car payment that is greater than $300-$450 per month may be considered high. It's important to keep in mind that a car payment is just one of several expenses associated with owning a car, including insurance, maintenance, and fuel costs.

What is a normal car payment?

Car payment statistics

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

Is a 5 year car payment bad?

A longer loan term means you are more likely to be upside down on the loan at some point in the future. Being upside on an auto loan means you owe more than the car is worth. This is because a larger portion of the monthly payments early in the loan will go toward paying interest rather than the principal owed.

What is the 20 3 8 rule?

The 20/3/8 car buying rule says you should put 20% down, pay off your car loan in three years (36 months), and spend no more than 8% of your pretax income on car payments. As we go into depth to determine how realistic this rule is, you may consider whether it can actually help you budget for your next car.

Can I lower my monthly car payment?

You can reduce your monthly car payments on an existing loan by negotiating with your lender, refinancing, selling your car or trading it in for a cheaper car. You can also get lower payments on a new car if you make a larger down payment and shop for an affordable vehicle.

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

How much should I spend on a car if I make $60,000? If your gross salary is $60,000, your take-home monthly pay is probably around $3,750, assuming about 25% of your pay goes toward taxes and other expenses. Based on the 10-15% calculation, you should spend no more than $562.50 on a monthly car payment.

What car can I afford with 70k salary?

Based on the 20/4/20 rule, with an average interest rate, you can afford a $19,000-20,000 car on your $70k salary.

Is 2023 a good year to buy a car?

Car prices were high in 2023, and financing rates were expensive. Buying a car in 2023 wasn't good for many people's personal finances.

What is a good down payment on a 30k car?

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.

Do most families have 2 car payments?

However, it might be difficult to qualify for more than one, and having multiple car loans outstanding might not make financial sense. In practice, few people have more than two auto loans at once.