I’m planning to buy a car but want to stay within my budget. Could you explain how much car I can afford based on income, expenses, and recommended financial guidelines?
To determine how much car you can afford, consider your monthly income, expenses, existing debts, and savings. A common rule is spending no more than 15%–20% of your monthly income on car payments, including insurance and maintenance.
A simple rule: you can afford a car that costs no more than 20–30% of your annual income, and your monthly car payment should stay under 10–15% of your monthly income.
