How much car can you actually afford?

I found a calculator that can help figure out how much car you can afford based on your budget and expenses. It’s got options to add in your down payment, trade-in value, and monthly payment. Anyone tried something like this before? How much car do you think you can realistically get?

I think that calculator is super useful! I just ran my numbers and it really helped me decide on a realistic budget. Turns out, I should aim a bit lower than I thought.

Willow said:
I think that calculator is super useful! I just ran my numbers and it really helped me decide on a realistic budget. Turns out, I should aim a bit lower than I thought.

Same here. It’s crazy how much of a difference a down payment makes though. Trying to save up a bit more now.

Willow said:
I think that calculator is super useful! I just ran my numbers and it really helped me decide on a realistic budget. Turns out, I should aim a bit lower than I thought.

Totally. I was debating between a new car or used, and that calculator made it clear that used is the way to go for me right now.

Does it account for insurance costs? Because I always forget to factor that in, and it adds up.

Lin said:
Does it account for insurance costs? Because I always forget to factor that in, and it adds up.

Good point! The calculator doesn’t calculate insurance, but it does suggest you keep total car expenses under 20% of your income. So yeah, insurance is part of that too.

Lin said:
Does it account for insurance costs? Because I always forget to factor that in, and it adds up.

Insurance can be a shocker! Might be worth getting some quotes to add to your budget estimate.

I’ve heard the rule is to keep your car payment around 10-15% of your take-home pay. Anyone actually follow that?

Jem said:
I’ve heard the rule is to keep your car payment around 10-15% of your take-home pay. Anyone actually follow that?

I try to! It makes sense when you add up all the other car costs like maintenance and gas. Helps to avoid getting in over your head.

Jem said:
I’ve heard the rule is to keep your car payment around 10-15% of your take-home pay. Anyone actually follow that?

Yep, that’s the plan for me. Ended up going with a longer loan term to keep it under 15% though.

Does anyone actually put down 20% on a car these days? I feel like that’s a tough goal with all the other expenses.

Rowan said:
Does anyone actually put down 20% on a car these days? I feel like that’s a tough goal with all the other expenses.

I know, right? I managed 10% on mine. Might trade it in soon and use that toward the next one.

Rowan said:
Does anyone actually put down 20% on a car these days? I feel like that’s a tough goal with all the other expenses.

20% seems high, but it’s supposed to help you avoid going ‘upside down’ on the loan. So maybe it’s worth aiming for if possible.

For anyone curious, the calculator I found doesn’t include sales tax or fees, so keep that in mind too. Best to look for cars a bit below the total amount it says.

Cambria said:
For anyone curious, the calculator I found doesn’t include sales tax or fees, so keep that in mind too. Best to look for cars a bit below the total amount it says.

Good tip! I’d definitely keep a buffer, dealerships can add a lot of extras.

Cambria said:
For anyone curious, the calculator I found doesn’t include sales tax or fees, so keep that in mind too. Best to look for cars a bit below the total amount it says.

Exactly! I had a friend who didn’t realize that and was over budget after all the fees were added. Learned the hard way.