US EditionHow much car can I afford?
Financial guidelines suggest monthly car payments should not exceed 15% of take-home pay, but total automotive costs can reach nearly 27%, experts say.
- 15% of monthly take-home pay guides John to a $445 lease payment, which is 11% of his income, based on data from the U.S. Bureau of Labor and Statistics.
- Experts recommend personal finance guidelines that total auto expenses stay under 20% of monthly take-home pay, with some suggesting payments should not exceed 15%.
- Using average used car data, John’s financing of $29,080 results in a $909 monthly payment, about 22.4% of his take-home pay.
- After accounting for fuel and insurance, John’s total auto expenses are $1,077, nearly 27% of his take-home pay.
- Considering lease agreements, John’s 13% down payment of about $6,433 on a car costing $42,388 may require a 12,000-mile limit.
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How much car can I afford? | News Channel 3-12
Sorapop Udomsri // Shutterstock How much car can I afford? As if car shopping weren’t challenging enough already, figuring out how much to spend on a car is a moving target even among financial experts. Some believe that, all combined, automotive expenses, including gas, insurance, car payments and maintenance, should not exceed 20% of your pretax monthly income. Other experts say that a vehicle that costs less than half of your annual take-home…
Coverage Details
Total News Sources44
Leaning Left2Leaning Right1Center37Last UpdatedBias Distribution93% Center
Bias Distribution
- 93% of the sources are Center
93% Center
C 93%
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