How Much Should I Spend On A Used Car

But its a bad idea.

How much should i spend on a used car. If you make 3500 spend 700 on a car. Cars whether they are new or pre owned are expensive to buy and operate and theyre only getting more costly. First you should make a downpayment of at least 20. Personal finance is personal but everyone wants a rule to follow.

While 15 is the maximum limit to keep in mind regarding how much you should spend on a car the golden. How much should i spend on a used car. Autotrader shortcut once you know the maximum you can spend on a monthly car payment and your down payment autotraders price calculator can help pinpoint the vehicle transaction price to which you should be limiting your search. If you only earn 20000 a year it gives you a budget of 7000.

If you owe more on your current car than its worth that will be added to the amount financed further reducing how much car you can buy. The cardinal rule of car budgets is the 20410 rule. Another rule of thumb says that drivers should spend no more than 15 of their monthly take home pay on car expenses. Average used car prices.

On top of that interest rates are slowly creeping up making the cost of auto loans and leasing more expensive. This covers most bases. However because a vehicle is a depreciating asset you should generally never spend more than about 15 of your gross income on a car. So when pressed i would say spend up to 35 percent of your annual income on a car.

The exact amount you should spend on a car will vary significantly based on your financial situation. Probably not as much as you might think. You can spend between 10 and 50 percent of your gross annual income on a carthats a big range we know so if we had to set a rule it would be this. So really how much should you spend on a car.

Thats not a lot but its definitely enough to buy. If you take home 2500 spend 500 on a car.