How Much Car Can I Afford?
See Cars Under $20,000
Near Fond du Lac, WI 54937
How much can I afford per month?
A simple way to ballpark how much car you can afford per month is to start with your take-home (net) monthly income and keep all car costs (payment plus insurance, fuel/charging, maintenance, registration/taxes, and parking) at about 15% of that number (or 10% if you want extra breathing room). For example, if you bring home $5,000/month, a comfortable all-in car budget is roughly $500–$750/month; then back into the payment by subtracting your estimated insurance/fuel/maintenance (say $250–$400), leaving a payment target around $250–$500/month. If you’re also carrying other big debts, aim lower so your total monthly debt payments stay manageable and you can still save.
Besides price, what else affects affordability?
Besides the sticker price, affordability is mainly shaped by:
- Financing terms like APR, loan length, and your down payment/trade equity (these change the monthly payment a lot)
- Total ownership costs such as insurance premiums, fuel/charging, routine maintenance, tires, and expected repairs (which vary widely by model and mileage)
- Fees and taxes including sales tax, registration/title, dealer fees, and whether you roll them into the loan
- Depreciation and how long you plan to keep the vehicle (faster depreciation can mean higher effective cost, especially if you trade early)
- Your personal cash-flow buffer like existing debt payments, savings goals, and the risk of income changes—because a payment that “fits” on paper can still be stressful if it leaves no room for emergencies.
Car Affordability FAQs
How much car can I afford based on salary?
To estimate how much car you can afford based on salary, start with your monthly take-home pay (after taxes and benefits) and keep your all-in car budget (payment + insurance + fuel/charging + maintenance + registration/parking) around 10–15% of that number (closer to 10% if you want more cushion). For instance, if you net $4,500/month, a comfortable all-in car budget is about $450–$675/month; subtract your expected non-payment costs (often $250–$450/month depending on driving and insurance), and the remainder is a practical payment target (roughly $200–$425/month in this example). This approach keeps the car affordable even when costs fluctuate and leaves room for savings and other obligations.
How much should I spend on a car if I make $75,000?
If you make $75,000/year (about $6,250/month gross), a comfortable guideline is to keep all car costs (payment + insurance + fuel + maintenance) to 10–15% of your take-home pay. For many people at $75k, that works out to roughly $500–$800/month all-in, which often means a car payment around $250–$550/month after insurance and fuel (depending on your rates and how much you drive).
How do you determine car affordability?
You determine car affordability by working backward from your monthly cash flow: start with your take-home income, set a conservative “all-in” car budget (payment plus insurance, fuel/charging, maintenance, registration/parking) that won’t strain your finances (often around 10–15% of take-home), subtract realistic running costs to find a safe payment range, then test the numbers against your other obligations and savings goals (emergency fund, retirement, housing, debt). If the payment only works by stretching the loan term, skipping savings, or leaving no buffer for repairs or rate changes, it isn’t truly affordable.
How much is a loan on a $35,000 car?
Monthly payments will vary based on the down payment, interest rate and term of the loan. For a $35,000 loan, for example, if you put $2,500 down and secure a 7.9% interest rate for a loan of 5 years, you would expect to pay around $657 per month (this does not include, tax title, license and services fee). For a precise estimate of monthly lease costs and total cost of your loan, click explore payment options on the vehicle detail page of any vehicle.