Is $600 car payment too much? (2024)

Is $600 car payment too much?

According to Consumer Reports, the average monthly payment on a new car loan is $600 — up 25% in the last 10 years. A payment that high can make a serious dent in your budget. Here are some tips to help keep your payments as low as possible.

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Is 600 a month too much for a car payment?

An affordable car payment would be one that doesn't exceed $600 a month, based on the rule of thumb that your car payment shouldn't be more than 15% of your take-home pay. If you take out a 60-month car loan at 8% APR, you should aim to take out a car loan of less than $30,000.

(Video) How Much Car Is Too Much?
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How much should I make for a $600 car payment?

#1 Calculate Your Monthly Car Payment
Monthly Take-Home Pay (Post-Tax)Monthly Car Payments Should Not Exceed…
$1,500$150 to $225 per month
$3,000$300 to $450 per month
$4,500$450 to $675 per month
$6,000$600 to $900 per month
2 more rows

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Is $500 a month a high car payment?

If you're looking for a few tips on managing a high car payment, you're not alone. The average monthly car payment is now a record $733, according to Edmunds. And even if your monthly auto loan payments are around $500 per month, that still may be uncomfortably high.

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What is considered a high car payment?

According to experts, a car payment is too high if the car payment is more than 30% of your total income. Remember, the car payment isn't your only car expense! Make sure to consider fuel and maintenance expenses. Make sure your car payment does not exceed 15%-20% of your total income.

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What is a realistic monthly car payment?

The average monthly car payment for new cars is $726. The average monthly car payment for used cars is $533. 39.20 percent of vehicles financed in the third quarter of 2023 were new vehicles.

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What is a fair monthly car payment?

In general, it's recommended to spend no more than 10% to 15% of your monthly take-home income on your car payment, and no more than 20% on your total vehicle expenses, including insurance and registration. Read on to learn how you can determine how much car you can afford based on your financial situation.

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Is $700 a month a lot for a car?

The average new car payment has just hit $700 a month, with some paying $1,000. Some ways to lower that price. Remember just a few years ago when a car loan was $300 a month? Now, unless you put down a huge down payment, those days are gone forever.

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What car can I afford making 50k a year?

How much car can I afford if I make $50,000? While it depends on factors like your credit score, loan terms, down payment and any potential trade-in value, you may find that a vehicle in the $20,000 to $35,000 range will fit your budget.

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Is $750 a high car payment?

If you're buying a car and are looking at an auto loan payment of $750 a month, it doesn't necessarily mean you're purchasing a luxury vehicle. The average monthly payment for new vehicles hit a record high of $730 during the first quarter of 2023, according to Edmunds.

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What is a normal car payment in 2023?

Visit your My NerdWallet Settings page to see all the writers you're following. The average monthly car loan payment in the U.S. is $726 for new vehicles and $533 for used ones originated in the third quarter of 2023, according to credit reporting agency Experian.

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What's the average car payment in 2023?

The average car payment for a new vehicle is $726 monthly, according to third-quarter 2023 data from Experian — up 3.6% year over year. Meanwhile, new lease payments average $597 (up 4.6%). With the lowest jump at 0.8%, used cars have the lowest average monthly payment at $533.

Is $600 car payment too much? (2024)
Is 650 a month good car payment?

The pandemic and resulting supply-chain issues, inflation, rising interest rates all play a part. Depending on whom you ask, the average car buyer in the U.S. is paying $657 (Edmunds.com) or $712 (Moody's) a month for their new vehicles.

Is $1,000 a month car payment too much?

$1000-a-Month (or Higher) Car Payments Are Distressingly Common Right Now. New data from Edmunds shows that more than 15 percent of new-vehicle buyers are signing on for four-figure payments.

Is $1,000 car payment too much?

But according to Edmunds, there's another reason why $1,000 monthly payments are becoming more common: Some buyers are taking out loans with shorter-than-normal financing terms to score a better financing deal, which means higher monthly payments. Endurance offers extended protection for your vehicle.

How much should I spend on a car if I make $40 000?

It depends on how much income you have after your bills and expenses. But as a rule of thumb, your car payment should not exceed 15% of your post-tax monthly pay. For example, if after taxes, you make the U.S. median income of $37,773, you could shop for a car that costs up to $472 per month.

Why is monthly car payment so high?

More recently, rising interest rates—a result of the Federal Reserve's campaign of anti-inflation rate hikes—have driven auto loan rates to their highest in decades. Car buyers last quarter paid an average interest rate of 7.4% for new vehicles and 11.2% for used, both the highest since 2007, according to Edmunds.

How much should I spend on a car if I make $60000?

How much should I spend on a car if I make $60,000? If your gross salary is $60,000, your take-home monthly pay is probably around $3,750, assuming about 25% of your pay goes toward taxes and other expenses. Based on the 10-15% calculation, you should spend no more than $562.50 on a monthly car payment.

How much should I make a month to afford a car?

NerdWallet recommends spending no more than 10% of your take-home pay on your monthly auto loan payment. So if your after-tax pay each month is $3,000, you could afford a $300 car payment. Check if you can really afford the payment by depositing that amount into a savings account for a few months.

How much should I spend on a car if I make $300000?

So, how much car can you afford? As a rule of thumb, never spend more than 35% of your gross annual income on a car.

How much should I spend on a car if I make $100000?

Many lenders approve car loans (and refinance loans) with a DTI around 50%. To find out how much car you can afford with this 36% rule, simply multiply your family's income by 0.36. So if you earn $100,000, for example, you could afford to take out a car loan of up to $36,000 — assuming you don't have any other debt.

What car can I afford with 80k salary?

you comfortably afford under an 80 000 salary. a volkswagen golf gti audi a3 a toyota. avalon the kia stinger and the cadillac ct4.

How much would a $30000 car cost per month?

How much would a $30,000 car cost per month? This all depends on the sales tax, the down payment, the interest rate and the length of the loan. But just as a ballpark estimate, assuming $3,000 down, an interest rate of 5.8% and a 60-month loan, the monthly payment would be about $520.

What is the 20 3 8 rule?

What is the 20/3/8 rule for financing a car? — The 20/3/8 rule suggests putting 20% down, financing for no more than 3 years, and ensuring that monthly payments do not exceed 8% of monthly gross income.

Can I pay 300 a month for a car?

If buyers don't have a downpayment or a trade vehicle, then the best way to get to a $300 car payment is to shop for a vehicle around $15,000. A $15,000 car has a monthly payment of $300 for 5 years at a 7.5% interest rate.

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