How much can I afford for a new car if I make $50,000 a year?
What is a good car loan on my salary? I currently make $50,000 a year and I want to finance a car.
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Answered on Jul 10, 2021
Eric Schad has been a freelance writer for nearly a decade, as well as an SEO specialist and editor for the past five years. Before getting behind the keyboard, he worked in the finance and music industries (the perfect combo). With a wide array of professional and personal experiences, he’s developed a knack for tone and branding across many different verticals. Away from the computer, Schad is a blues guitar shredder, crazed sports fan, and always down for a spontaneous trip anywhere around the globe.
“As a general rule, you don’t want to spend more than 10% of your pay on a vehicle if you can avoid it. However, how many cars you can afford is also up to your budget and personal choices.
If you adhere to the 10% rule, that means that you should only spend $416.67 on a car loan payment each month. Determining this amount is highly variable.
There might be more affordable routes.
You can purchase a more expensive car and lengthen the term of the loan to lower your monthly payment.
You can also buy a less expensive car or a used car to get to this dollar amount.
What you decide is entirely up to you, but try to spend no more than that 10%.”
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