How much car can I afford?

A common rule is keeping your car payment under 15% of monthly take-home pay. On a $60,000 salary, that's roughly $560–$650/month. Total vehicle costs (payment + insurance + gas + maintenance) should stay under 20% of take-home pay. As a rough guide, your car should cost no more than 35–50% of your annual income.

Is it better to buy or lease a car?

Buying makes more financial sense long-term — once the loan is paid off, you own an asset. Leasing costs less per month but you never build equity. Leasing works if you want a new car every 3 years and drive under 12,000 miles/year. If you keep cars 7+ years, buying wins decisively.

What credit score do I need for a car loan?

You can get a car loan with credit scores as low as 580, but rates above 700 are dramatically better. With a 750+ score, expect 4–7% APR. Below 600, rates can exceed 14–20%. On a $30,000 loan, the difference between 5% and 16% APR is over $10,000 in extra interest.

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Auto & Car Loans – Affordability, Buying Guides & Financing

Auto & Car Loans – Affordability, Buying Guides & Financing

Updated April 2026

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