To find the average car payment, research group experian followed 500,000 people and averaged their car payments. the result? $474 a month. this is up from $461 in december 2017 and $389 in 2016. as interest rates rise, we should expect to see continued increases in the size of monthly auto loan payments.
how much is too high of a car payment?
there is no limit.
it's a good idea to put no more than 10% of your gross income towards your car payment, and if lower than that 7-9% might be more realistic. anything higher than 15% of your gross income allotted for cars may lead you to find yourself in trouble. and it's even better not to buy a new car because the depreciation on an old car is less and therefor blows your budget less quickly. buying a used vehicle is also much cheaper, helped by the fact that people lose their jobs all the time these days due to our economic slowdown. ensure you save enough money for 6 months to one year worth of living expenses before buying any automobile at all or else there
is 400 a lot for a car payment?
it depends. what are other factors you should consider when determining if the monthly payment is “a lot”?
– length of car loan
– the size of your down payment
– your current debt load, including student loans and credit cards.
next to asking these questions, it would be helpful to talk about calculated monthly income vs total monthly expenses. but first let's start with what type of car are we talking about here? gas or electric? and then how does that factor into each question above? you see there could be a whole range or difference depending on which type of vehicle you're considering 400 bucks per month for. for example, an electric vehicle would mean less maintenance costs and more savings in the long run but
can i afford a $800 car payment?
if you know for sure that you can afford a $800 car payment and be able to meet all the other necessities like rent, food and utilities, then yes.
if not now, when? you may as well now as later cause it doesn't become any easier over time. i believe without hesitation every person should ‘suffer' through this at least once in their lifetime. it's an important life lesson because knowing what it feels like will make it more unlikely you stop taking risks and retreat into “comfort zones” of people who would never take such a risk.
the reality is we already live in a society where we're told we need to stay within our means and not do anything risky with money, so by
is a 72 month car payment bad?
a 72-month car loan will be more expensive than a 36-month loan because of the interest rate.
a 72 month car payment may seem like a short period for consideration, but that's only if you're looking at the monthly cost and not including interest. when it takes four years to pay off a debt rather than two years, it makes more sense to think in terms of total expenses–which can include vital purchases such as food and healthcare. there are even cases where customers may find their mortgage payments cheaper than an auto loan with less time left to pay off the corresponding debt. of course, this is all dependent on factors such as tax laws and how much disposable income one has for other regular expenditures (i.e