Car Buying

Calculator: How Much Car Can I Afford?

  • How much car you can afford can depend on how you choose to finance the vehicle
  • Buying a new car is the most expensive options up front, but while buying an older car might be cheaper initially, it’ll cost you more in maintenance and repairs
  • The 20/4/10 rule states you should use cash for 20% down payment, take out a 48-month loan, and spend no more than 10% of your monthly pre-tax income on your monthly car payment
  • The type of car you own, where you live, how much you drive, and even your driving habits can impact your car maintenance and repair costs
  • If you earn $50,000 per year and have 20% saved up for a down payment, the upper limit of your car budget should be around $21,600

TABLE OF CONTENTS

If you’re shopping for a car, one of the first questions that comes to mind is how much car you can afford. Cars come in a variety of sizes and styles, typically ranging from a few thousand dollars to a few hundred thousand dollars. Before you begin your search for a new or used car, you’ll want to figure out which cars are in your budget. So, where do you start? Don’t worry – you won’t need to break out your accounting visor for these calculations. Use the car affordability calculator below to estimate how much you can afford.


How much car will my payment buy?

Car Affordability Calculator

Enter your monthly payment, credit range, and loan term to see how much you can afford to spend on a car.









Budgeting for a Car

You might be wondering how to determine your budget for a new or used car. Many experts suggest sticking to the 20/4/10 rule, which is a simple solution for figuring out how much car you can afford. The 20/4/10 rule states that if you’re looking to buy a car, you should use cash for 20% down payment, take out a 48-month loan, and spend no more than 10% of your monthly pre-tax income on your monthly car payment.

Check out the 20/4/10 car buying rule below:

20 = Your down payment on the car should equal 20%

4 = The length of the car loan term in years

10 = You should spend no more than 10% of your monthly income on your car payment

Another common car budgeting strategy is the 15% rule, which is used for buying a new car. The 15% rule advises spending no more than 15% of your monthly post-tax income. If you’re looking to lease or buy a used car, the 10% rule knocks that number down to spending 10% or less of your monthly take-home pay on your car payment.  

Finding the Right Car Loan

Financing your car purchase is a key part of making sure you get the best value on your vehicle purchase. Take advantage of comparing free auto loan quotes from multiple lenders, paying close attention to any hidden fees or charges in the fine print. Before you apply for a loan or lease a car, be sure your credit puts you in a good position to qualify for the best possible rate. If your credit could use some work, you may want to take some time to work on making improvements before buying your car.

How Much Car Can I Afford for $450 a Month?

The median full-time employee in the United States earns a little over $1,000 per week, giving them an annual salary of around $50,000 – $60,000. In terms of a car payment, what does that get you? If we use our 20/4/10 car buying rule, around $450 per month.

Let’s break down how much car you can afford with that monthly payment.

If your income is fairly typical (in the range of $50,000 – $60,000 per year), you should be able to afford a car of up to around $24,000. For a new car, that might mean a Honda Civic (starting at $22,500 for 2022), while a used car opens you up to more choices, like a Honda Pilot, Toyota Camry, and even some entry-level luxury options like Acura and Infiniti. 

If you prefer leasing, the same payment of up to $450 will allow you to get even more car for your money – just remember that you won’t be making any progress toward actually owning the car. Your lease options will vary based on the current offers and any specials the dealership is running, but in general, a monthly payment between $400 and $450 can cover the cost of leasing a car that retails in the $30,000 – $35,000 range. When you lease a car, chances are you’ll still have to make a down payment, so be sure to factor that into your budget.

The exact monthly payment you can afford for a new or used car depends on a variety of factors, including the ongoing costs of car ownership and the risks of financing a vehicle purchase. The following steps will help you decide whether you can afford to buy (or lease) a car now and how much you can spend.

What Else to Consider When Determining How Much Car You Can Afford

Spending Habits

Buying a car is a long-term financial commitment, so it’s important to consider your spending habits and ensure you’re ready to take on this added expense. Vehicle financing is a great way to spread out the cost of a car over time, but you have to be prepared to meet your monthly payment obligations until the car is paid off (or sold). If you’re worried you won’t be able to consistently make those payments, you might want to continue saving or look into some more affordable options.

Financing Options: Leasing, Buying New, and Buying Used

How much car you can afford can depend on how you choose to finance the vehicle. For example, if you choose to lease a new car rather than buy a new car, your monthly payment for the same vehicle might be significantly less with the lease, though you won’t be any closer to owning the car at the end of your lease term. Similarly, if you buy used, you may be able to use the same payment to buy a car that has a much higher retail price than the new car you could afford.

Leasing, buying used, and buying new all come with their own advantages and disadvantages.

Leasing

Pros Cons
You get to enjoy the newest models You don’t own the car
Lower monthly payments Mileage limits
Maintenance is usually less likely You might still have to pay for maintenance
Less commitment than buying You may be charged for scratches, dings, dents, and other damages
  Higher insurance costs

Buying New

Pros Cons
You get to enjoy the newest models Expensive
Comes with the full manufacturer warranty Tends to lose value faster than a used car
Usually offers lower interest rates More expensive repairs than an older car
Includes the latest tech and safety features Higher insurance costs
May be easier and more convenient than buying a used car Usually require a larger down payment
More reliable than an older car  
You know the car’s history (no prior accidents or non-manufacturer parts)  
May be customizable  

Buying Used

Pros Cons
Lower price You don’t necessarily know the vehicle history
Lower monthly payments May need more maintenance
Tends to hold its value better than a new car Warranties may be shorter and have more limitations
You can get more car for the money Fewer choices
Less expensive to insure  

Maintenance and Repair Costs

Your car, much like your house, is far from a one-time expense. If you want your car to keep working for you, you have to return the favor in the form of repairs and regular maintenance. While you can plan most of your maintenance trips, you can’t necessarily predict when your car will need repairs. Nevertheless, you’ll have to budget for the possibility of pricey repairs if you own a car, and the best way to do that is by working these costs into your monthly car budget.

FYI – Many people want to know if car insurance covers non-accident repairs: the answer is, unfortunately, no.

10 Least Expensive Cars to Maintain 

Model 10 Year Maintenance Cost
Toyota Prius $4,008
Toyota Yaris $4,027
Toyota Corolla $4,087
Toyota Prius Prime $4,098
Toyota Camry $4,203
Toyota Avalon $4,407
Honda Fit $4,915
Mitsubishi Mirage $4,939
Toyota Supra $4,950
Honda Civic $5,245

10 Most Expensive Cars to Maintain 

Model 10 Year Maintenance Cost
Dodge Ram 3500 $25,844
Dodge Ram 2500 $25,464
Dodge Ram 5500 $25,202
Dodge Ram 4500 $25,134
Dodge Ram Promaster Cargo Van $20,061
Dodge Ram Promaster City $19,870
Dodge Ram 1500 $17,677
Ford F-450 Super Duty $15,479
Ford F-350 Super Duty $14,973
Ford F-250 Super Duty $14,929

What should you plan to pay per month for maintenance and repairs?

The type of car you own, where you live, how much you drive, and even your driving habits can impact your car maintenance and repair costs. With that in mind, the average cost of maintenance and repairs nationwide comes out to 9.55 cents per mile, according to AAA. Since the average person drives around 1,200 miles per month, that translates to a monthly cost of $114.60 for maintaining and repairing your car. 

It’s important to note that repair costs can come out of the blue, so don’t be surprised if you’re cruising along with no repair costs one month, only to find yourself at the mechanic with an $800 bill to pay the next. If you take care of your car’s regular maintenance, you should find that your repair most months is relatively inexpensive, but that there will be a few very expensive months every now and again. 

What if you buy an older vehicle?

Again there are no hard-and-fast rules when it comes to maintenance and repair costs, but most older vehicles will incur higher maintenance and repair costs. On average, a 10-year-old car will cost you nearly twice as much to maintain and repair compared with a 5-year-old car. If you own a 2017 model car, that would equate to a car loan budget of $208 per month, whereas a 2012 model would set you back an average of $406 monthly.

Luxury cars also cost more to maintain and repair

If you want to buy a luxury car, you can expect the added comfort and style these cars offer to cost you more, not only when you’re buying, but throughout your time owning the vehicle. For example, BMW, Audi, and Mercedez-Benz sedans generally cost more to maintain and repair than comparable Ford, Nissan, and Toyota models.

So, which one should you choose?

Sometimes, your budget can leave you with few choices, which may mean your only option is to buy an older car. Other times, you might just be looking for a bargain by choosing an older car and the lower price point . Buying an older car might be cheaper initially, but the caveat is that it’ll cost you more in maintenance and repairs, and you might find yourself shopping for another car in the near future if the car breaks down.

If you have the flexibility to choose between a new and used car, it probably makes the most sense to buy a car that’s around 3 -5 years old. Why? Well, you’ll still benefit from getting a more competitive price than if you buy new, and you’ll get a more reliable car than if you buy something that’s 8 or 10 years old. Keep in mind that mileage is also an important factor, so the age of the car may not tell its entire story.

Other Costs to Consider

Before you can use your car, there are a couple of additional costs to consider. 

Gas (or electricity)

Your car needs some type of energy to keep it moving. For most cars on the road today, that means taking a trip to the pump to fill the tank with gas. The cost of gasoline depends on gas prices, how far you drive, and your car’s efficiency. In 2021, the average household was spending about $233 per month (or $2,800) per year on gas; in 2022, that number is closer to $400 per month due to recent increases in gas prices. 
For those with electric vehicles (EVs), you’ll need to charge up the batteries, which costs roughly $6 for a 200-mile charge if you have a charging station at home.

Insurance

By law, you have to maintain car insurance on any vehicle you own that’s registered with the department of motor vehicles. Car insurance costs can vary substantially based on the state you live in, the type of coverage you choose, the car you drive, your age, and of course, your driving record. On average, car insurance will cost you roughly $110 per month

Curious to know which states offer the most (and least) affordable car insurance rates? We’ve got you covered.

Most Expensive Insurance Rates Least Expensive Insurance Rates
Louisiana Maine
Michigan North Dakota
New York Iowa
Washington D.C. Idaho
Florida North Carolina
Source: iii.org

License, Registration, Inspections, and Parking

You’ll need to maintain a valid driver license (usually less than $10 per month) to legally drive. In addition, you’ll have to register the car with the state’s department of motor vehicles and pay an annual renewal fee, which ranges from less than $50 per year to several hundred dollars for heavier vehicles in certain states. Some states may require vehicle inspections and emission tests, which often cost $40 or $50 per year and up. Finally, if you live in a city, you may have to pay for parking, an expense that could add up to thousands per year.

Other costs to consider include gap insurance and any customizations you want to make to your car.

How to Determine What Car You Can Afford

Your salary can help you understand how much car you can afford, though it will also depend on your other financial obligations and expenses. Take a look at the different salary ranges below to find out how much car you can afford based on your salary, what your monthly payment would be, and how much money you need to save up for a down payment. 

What car can I afford with $30K salary?

OUR ADVICE

Shop for cars under $13,500>>

Your monthly car payment: Up to $333

Your down payment: $2,700

Best cars to buy on a $30,000 salary

  • Toyota Corolla
  • Honda Civic
  • Mazda3
  • Ford Fusion

Best SUVs to buy on a $30,000 salary

  • Honda CR-V
  • Toyota RAV-4
  • Hyundai Tucson
  • Nissan Rogue

Best trucks to buy on a $30,000 salary

  • Toyota Tacoma
  • Toyota Tundra
  • Chevrolet Silverado
  • Ford F-150

What car can I afford on $40K salary?

OUR ADVICE

Shop for cars under $17,900>>

Your monthly car payment: Up to $333

Your down payment: $3,598

Best cars to buy on a $40,000 salary

  • Honda Accord
  • Toyota Camry
  • Subaru Legacy

Best SUVs to buy on a $40,000 salary

  • Honda CR-V
  • Toyota RAV-4
  • Toyota Highlander

Best trucks to buy on a $40,000 salary

  • Chevrolet Colorado
  • Honda Ridgeline
  • Ford F-150
  • Toyota Tacoma

What car can I afford with $50K salary?

If you earn $50,000 per year and have 20% saved up for a down payment, the upper limit of your car budget should be around $21,600. Using the 20/4/10 rule, you should keep your monthly car payment to no more than $416, which means you have plenty of choices for used cars, and the option to buy new.

OUR ADVICE

Shop for cars under $21,600>>

Your monthly car payment: Up to $416

Your down payment: $4,320

Best cars to buy on a $50,000 salary

  • Kia Forte
  • Hyundai Accent
  • Nissan Versa

Best SUVs to buy on a $50,000 salary

  • Honda CR-V
  • Kia Soul
  • Toyota Highlander
  • Toyotra RAV-4
  • Hyundai Venue

Best trucks to buy on a $50,000 salary

  • Toyota Tacoma
  • Nissan Frontier
  • Honda Ridgeline
  • Hyundai Santa Cruz

How much car can I afford on a $60K salary?

OUR ADVICE

Shop for cars under $26,000>>

Your monthly car payment: Up to $500

Your down payment: $5,210

Best cars to buy on a $60,000 salary

  • Mazda 3
  • Kia Forte
  • Honda Civic
  • Toyota Corolla

Best SUVs to buy on a $60,000 salary

  • Hyundai Venue
  • Hyundai Kona
  • Kia Soul
  • Toyota Highlander
  • Toyota RAV-4
  • Honda Pilot
  • Subaru Forester

Best trucks to buy on a $60,000 salary

  • Honda Ridgeline
  • Chevrolet Colorado
  • GMC Sierra 1500
  • Nissan Frontier
  • Ford F-150

How much car can I afford on $70K a year?

OUR ADVICE

Shop for cars under $30,300>>

Your monthly car payment: Up to $583

Your down payment: $5,063

Best cars to buy on a $70,000 salary

  • Honda Civic
  • Hyundai Sonata
  • Hyundai Elantra
  • Toyota Camry
  • Volkswagen Jetta

Best SUVs to buy on a $70,000 salary

  • Hyundai Tucson
  • Toyota RAV-4
  • Kia Seltos
  • Kia Niro Hybrid
  • Mazda CX-5
  • Honda CR-V
  • Subaru Forester

Best trucks to buy on a $70,000 salary

  • Hyundai Santa Cruz
  • Ford F-150
  • Toyota Tacoma
  • Ford Ranger
  • Dodge Ram 1500

What price car can I afford if I make $80,000?

OUR ADVICE

Shop for cars under $34,700>>

Your monthly car payment: Up to $666

Your down payment: $5,785

Best cars to buy on a $80,000 salary

  • Honda Civic
  • Honda Accord
  • Toyota Camry
  • Hyundai Sonata
  • Subaru Legacy
  • Ford Fusion

Best SUVs to buy

 on a $80,000 salary

  • Kia Carnival
  • Subaru Outback
  • Ford Escape
  • Kia Niro Hybrid
  • Subaru Forester

Best trucks to buy on a $80,000 salary

  • Hyundai Santa Cruz
  • Ford F-150
  • Nissan Frontier
  • Dodge Ram
  • Toyota Tundra

How much car can I afford if I make $100K?

With a salary of $100,000, you’re looking at a lot of different car options. But, just because you can afford to spend more on a car doesn’t mean you necessarily should. Be conservative and stick to the 20/4/10 rule to make sure you don’t overspend. Try and keep your car payment to less than $833 per month, and aim to buy a car that costs under $43,400.

OUR ADVICE

Shop for cars under $43,400>>

Your monthly car payment: Up to $833

Your down payment: $8,680

Best cars to buy on a $100,000 salary

  • Kia Stinger
  • Volkswagen Golf GTI
  • Volvo S60
  • Hyundai Sonata Hybrid
  • Toyota Avalon

Best SUVs to buy on a $100,000 salary

  • Ford Bronco
  • Kia Telluride
  • Nissan Frontier
  • Ford Explorer
  • Jeep Grand Cherokee

Best trucks to buy on a $100,000 salary

  • Dodge Ram 1500
  • Ford F-150
  • Toyota Tundra
  • Honda Ridgeline
  • Chevrolet Silverado

Tips for Finding a Car You Can Afford

Finding a car you love that you can also afford may take some patience. You can use these tips to help get a good car at a fair price, and to ensure you’re buying within your budget.

  1. Buy used
  2. Explore inventories of online car dealers, like Carvana
  3. Do your research
  4. Shop around for the best loan rates
  5. Be flexible and avoid getting attached to one car
  6. Exercise patience and steer clear of making an emotional decision

How Much Car Can I Afford: FAQs

How much car do I qualify for?

To determine how much money you can borrow for your car purchase, you’ll have to speak to a lender who will review your finances and credit score. Try getting quotes from multiple lenders to review your options and make sure you’re getting the best possible deal.

Where can I buy car insurance?

If you’re buying a car, you can choose from any number of insurance companies. There are large, traditional insurance companies like State Farm, Geico, Progressive, and Allstate, as well as newer insurance companies who focus on insurance solutions through technology, like Jerry and Lemonade. Click here to compare quotes and find the best rate on car insurance.

How much car can I afford based on salary?

There are different rules about how much of your income should go to your car payment. As a general rule, you should aim to spend no more than 10% of your income on your car payment. 

Are cars a waste of money?

Cars are not a waste of money, but it’s easy to waste money on a car if you don’t know how to budget for a car, overspend, or buy a car when it’s not necessary. Cars should be viewed as a means of transportation, and if you need to get from A to B, buying a car that you can afford can be a good use of your money. 

Why should I not buy a car?

You shouldn’t buy a car if you don’t need one or can’t afford one. For example, if you can get around by walking and using public transportation, buying a car probably doesn’t make sense. Another example of when not to buy a car is if you can’t afford the payments, since the last thing you’d want is to default (i.e., fail to make payments) on your car loan.

What is a good price for a first car?

Everyone’s different, which is why there’s no right price for a first car. If you’re looking for a range, many people’s first car costs between $5,000 and $15,000. Ultimately, your first car should be one that fits your car budget, which means it costs less than 10% of your monthly income.

 

author-jonathan

Jonathan is a writer with over 10 years of experience and a former insurance agent. Jonathan’s focus is to simplify personal finance and help equip you with the tools you need to make smart financial decisions. Despite the criticisms, he remains committed to driving a manual transmission and prides himself on smooth shifting, even in rush-hour traffic.

Jonathan Pressman
Jonathan is a writer with over 10 years of experience and a former insurance agent. Jonathan's focus is to simplify personal finance and help equip you with the tools you need to make smart financial decisions. Despite the criticisms, he remains committed to driving a manual transmission and prides himself on smooth shifting, even in rush-hour traffic.

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