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

With a $100,000 salary, you can generally afford a car in the $30,000 to $60,000 range, but it depends on your full budget: aim for total monthly car expenses (payment, insurance, gas, maintenance) under 10-20% of your take-home pay, meaning roughly $800-$1,700/month, and consider total vehicle costs below your annual income (e.g., $50,000 total purchase price), though many suggest keeping it to half your salary or less for greater financial flexibility.


What is Dave Ramsey's rule on car buying?

Dave Ramsey's core car buying rule is to pay cash for a reliable used car, avoiding car loans entirely because cars lose value, and ensuring the total value of all your vehicles doesn't exceed half your annual income, emphasizing that things that depreciate shouldn't be financed. He advocates buying what you can afford outright to prevent debt, suggesting you save up and buy a modest, dependable vehicle instead of a new car that rapidly loses value.
 

How much should I spend on a car if I make $150,000?

A very common guideline that I see is that a person should try to budget to spend 20-30% of their gross annual income on a car (conservatively), and never more than 50% of their gross annual income. So if you made $50k/yr, you might try to stay under $10-15k, and spend no more than $25k.


What car can I afford with a 120k salary?

I personally would not spend more then a third to half of what your yearly salary is. So a $40,000 vehicle would be the low and recommended while $60k is the highest.

How much should you spend on a car based on your salary?

You should aim to spend no more than 10-15% of your monthly take-home pay on your car payment, with total car expenses (payment, insurance, gas, maintenance) under 20%. A common guideline is that your total car's price should be less than half your annual salary, or you can follow the 20/4/10 rule: 20% down, a 4-year loan, and 10% total expenses. 


ACCOUNTANT EXPLAINS: How to Avoid Overpaying for a Car



How much car can I afford if I make 100k?

With a $100k salary, you can likely afford a car in the $35,000 to $50,000 range, but it depends on your budget, aiming for total car expenses (payment, insurance, gas, maintenance) under 20% of your take-home pay, or about $1,250-$1,500 monthly, while a conservative monthly payment is under 10-15% of after-tax income, suggesting a budget closer to $500-$800 monthly for just the loan payment. Key factors are your down payment (20% recommended), credit score, loan term, and other debts. 

What hidden car costs should I consider?

Beyond the monthly payment, you'll also face years of variable expenses like car insurance, gas, maintenance and taxes, which can spike without warning. By considering these costs before buying a new or used car, you'll be better prepared for the financial ups and downs of hidden car ownership costs.

What kind of car can I buy for $100,000?

For around $100k, you can buy new luxury/performance cars like a Lexus LC 500, BMW M3/M550i, Porsche 718 Cayman/Boxster, Chevy Corvette, or Lotus Emira, or explore high-end used options like Porsche 911, Audi R8, Nissan GT-R, or even older Ferraris, depending on if you want daily comfort, track performance, or exotic looks, with EVs like Tesla Cybertruck also being options. 


What is the 50/30/20 rule for car payments?

The 50/30/20 rule is a budgeting guideline where you allocate 50% of your after-tax income to Needs (housing, groceries, essential transport including car payment/insurance), 30% to Wants (dining out, hobbies), and 20% to Savings & Debt (emergency fund, retirement, extra debt payments). For a car, this means your car payment, insurance, gas, and maintenance fit within the 50% Needs category, with experts often suggesting total car expenses stay under 15-20% of your income to leave room for other essentials and goals. 

What can I afford with a 100k salary?

With a $100,000 salary, you can generally afford a comfortable lifestyle with savings and investments, but home affordability varies drastically by location; you might buy a $350k-$450k home in many areas using the 28/36 rule (max $2,300/month housing), but struggle in high-cost cities like NYC or SF, needing strong credit and a good down payment for anything pricier. Your take-home pay is roughly $6,000-$7,000/month after taxes, leaving room for essentials, debt, and fun, but be cautious of overextending on housing to leave funds for other goals. 

What class are you in if you make $200,000 a year?

Making $200,000 a year generally places you in the upper-middle class, but depending on your location (especially high-cost areas like California) or household size, it can still fall within the broader definition of middle class, or even be considered upper income in some areas, showing that "class" is relative to cost of living and regional median incomes. 


How much should you spend on a car if you make $70,000 a year?

With a $70,000 salary, you can likely afford a car in the $25,000 to $45,000+ range, depending on your budget rules, aiming for monthly payments (loan + insurance) around $500-$800, keeping total vehicle expenses (payment, insurance, gas, maintenance) under 20% of your net income, and ideally putting 20% down on a loan under 4 years. A common guideline suggests your total car price shouldn't exceed half your annual income (around $35,000), but more conservative rules or aggressive saving can shift this, notes Benzinga and Ramsey Solutions. 

What is a good monthly car payment?

A good monthly car payment is typically 10-15% of your gross monthly income, or around 10% of your take-home pay, ensuring it leaves room for insurance, gas, maintenance, and savings. Aim for a total car budget (payment + insurance + gas + maintenance) under 15-20% of your income to avoid overspending, using strategies like a large down payment or shorter loan terms to keep costs down. 

What is the most financially smart way to buy a car?

How to make a financially savvy car purchase
  • Choose wisely. Choose the make and model based on what you need. ...
  • Set a budget. ...
  • Make a big down payment. ...
  • Look for sales. ...
  • Shop around for the best loan. ...
  • Cut down on interest. ...
  • Make a deal. ...
  • Keep saving.


Why Dave Ramsey says not to finance a car?

“Cars, trucks, RVs, boats, and everything that has motors and wheels go down in value,” Ramsey wrote recently. “NEVER finance them, because they go down in value and you get stuck in them. Don't let debt trap you in something that's losing value every day. Save up, pay cash, and own it outright.”

What does Suze Orman say about buying a car?

Cars reportedly lose 20% of their value in the first year of ownership and retain just 40% of their original value after five years. Clearly, that is not a good investment. “Your goal should be to buy the least expensive car. Period,” said Orman.

How much should I spend on a car if my salary is $100,000?

So, if your annual salary is $100,000, then you might shop for a car (or cars) worth a total of $50,000. However, every financial situation is unique and people have different priorities. Interest rates, insurance premiums, and other factors also impact the total cost of your driving a vehicle.


What is the $27.40 rule?

The $27.40 Rule is a personal finance strategy to save $10,000 in one year by consistently setting aside $27.40 every single day ($27.40 x 365 days = $10,001). It's a simple way to reach a large financial goal by breaking it down into small, manageable daily habits, making saving feel less intimidating and more achievable by cutting small, unnecessary expenses like daily coffees or lunches.
 

How much would a $30,000 car payment be a 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's the best car with no problems?

According to a recent study by Consumer Reports, Toyota and Lexus were the most reliable vehicles in 2022. After Japanese cars, BMW was ranked third, while Mercedes' reliability was rated the lowest.


What SUV should I buy for 100K?

SUVs Starting Under $100K
  • Volvo XC90. From. $97,990. 9.5/10. From. $97,990. ...
  • Land Rover Defender. From. $96,255. 9.0/10. From. $96,255. ...
  • Range Rover Velar. From. $97,779. From. $97,779. ...
  • Kia EV9. From. $97,000. 8.4/10. From. ...
  • Mercedes-Benz GLC300. From. $95,700. 8.2/10. From.


What is a red flag in a dealership?

The “Red Flags Rule” requires your dealership to develop and implement a written Identity Theft Prevention Program (ITPP) to detect, prevent, and mitigate identity theft. Your dealership's highest governing authority must approve the initial ITPP, and take responsibility for it.

What dealer fees should I not pay?

12 Fees to Never Pay at a Dealership
  • Avoiding Unnecessary #1 Paint Protection Fees at Car Dealerships. ...
  • #2 Delivery and Destination Charges. ...
  • #3 Blinking Brake Lights. ...
  • #4 Credit Life and Disability Insurance. ...
  • #5 Dealership Prep and Reconditioning Fees. ...
  • #6 GPS/Tracking System. ...
  • #7 Theft Protection. ...
  • #8 Vehicle Accessories.


What should you never reveal to the dealer when negotiating?

If you tell them that you won't be taking out a car loan, many will either refuse to negotiate on the car's price or, worse, raise the price to increase their profit. If they know you have a specific budget, they also know they won't be able to move you up to a more expensive, profitable model.