If I make $75,000 a year, how much should I spend on a car loan?

What should I spend on a car loan so I don't overspend or stretch my funds too far? I'm in the market for a new or used car and I make about $75,000 per year.

Eric Schad · Updated on
Reviewed by Shannon Martin, Licensed Insurance Agent.
“The rule that most finance experts use states that you shouldn’t spend more than 10% of your income on a car.

Finding the right car payment

If you take your annual income of $75,000 and divide it by 12 to get your monthly income, you’ll come to $6,250. Now multiply that by 10% to get $625, as per the rule stated above.
From this math, you shouldn’t spend more than $625 on your monthly car note.
For example, a car that’s $35,000 with an interest rate of 3% over 60 months would put you in this range.

How can I save on insurance for my new or used car?

Keep in mind that you’ll also have to budget for other expenses of car ownership, such as:
While you’re shopping for your car, you also need to look around for car insurance. Take the hassle out of comparison shopping by using the free
An intelligent AI-based tool like Jerry is the easiest and most effective way to find a car insurance policy that is customized for you.”
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