What car can you afford with your money? Expert Insight

You’ve had your eye on a new ride for a few months now. More than anything, you want to go down to the dealership and put a downpayment on it so you can drive it off the lot. The question is, will you be able to handle the monthly bill?

What car can you afford with your money? This isn’t an easy question to answer. You have to take all your income into account when you’re making your calculations.

There’s also more to buying a vehicle than purchasing a car. You have to consider the registration fees and fuel costs. Not to mention, your insurance is most likely going to go up. 

We can help you determine if you’ll be able to handle everything that’s about to be thrown your way. Check out this pricing guide to learn more. 

Add Up Your Income

Before you head to the dealership to look at cars, you need to calculate your income. This part is easy if you make a steady check each week. You grab all your paystubs for the month and add them together. 

If your pay tends to fluctuate a little, things get more complicated. You’re going to need to do some rounding to find out about how much you make. This may throw the numbers out of wack, which is something you’ll need to account for in the next step. 

Subtract From Your Expenses 

Once you know how much you make in a single month, count up your expenses. You’ll then subtract the number you got above from the number you have now. 

The money you have leftover is how much you have to spend on your vehicle. We will tell you that you shouldn’t spend more than 15% of your monthly income on your car loan by Plenti. As we’ll get into a little later, you need to have some wiggle room for emergency expenses.

Use a Loan Calculator 

Now that you have your numbers, you can plug them into a loan calculator. It will tell you about how much you can get away with on a car loan. 

Put in your budget for the vehicle along with the interest rate that you’re hoping to get. It will give you a loan estimate based on these numbers.

The amount may not be accurate because you won’t know what kind of interest rate you’ll actually be working with until you get to the dealership, but it will still help you with budgeting. 

Take the Little Things Into Account

There’s more that goes into car expenses than paying off the loan. You’re going to need to put fuel in it to drive it. There are also maintenance fees to think about, and registration and insurance can take a chunk out of your budget. 


Without fuel, your vehicle will only be a fancy lawn ornament. Filling up to full can have a huge effect on car affordability, so you’re going to need to do a little homework. 

With your budget in hand, head to the internet and start looking around with cars with the best fuel efficiency. This way, you won’t have to fill up that often, and when you do, it shouldn’t break your bank. 


The next item on the agenda is maintenance. Things happen. One minute you’re driving down the road and in the next, your car shuts down on you. 

You’ll need to make sure that you have enough wiggle room in your budget to account for these unexpected events. You also need to factor in the costs for general maintenance. 

Every six months or so, you’ll need an oil change on your car. You’ll also have to check your brake pads and change your tires when they begin to show wear and tear. All of this can eat away at your wallet if you let it. 


You can’t drive without insurance because it’s illegal. You also need that financial safety cushion in case something goes wrong on the road. 

For the most part, the cost of your policy is determined based on your age, driving record, the price of the vehicle, the location where you live, and the type of car you’re taking on the road. 

If you know the type of car you want, you can call your provider and find out how much it would cost to finance the vehicle in question. 


Registration fees work a little differently depending on what state you’re in. In some, you pay a flat rate. In others, the price is determined based on your car’s age, weight, and other factors. 

This makes it a little hard to plug it into your car affordability calculator. You’re going to need to call the DMV or go onto their website to figure out the cost. 


Yes, you even have to factor parking into affording a car. If you have to pay a fee to park at work, you might be better off taking public transportation or carpooling with another person. 

If you want to store your car in a garage, most apartment complexes have this, but they’ll charge you an extra fee each month on your rent. 

Tips to Keep In Mind

Now that you know the answer to “how much car can I afford,” it’s time to head to the dealership and hunt around? The seller will try to get you to go outside your budget, but you need to resist temptation. 

You’ve got to give yourself some financial space each month. There’s also the little matter of finding insurance. At the end of the day, you may be better off looking for a used car. 

Leave Some Wiggle Room

By using a calculator, you know how much car you can afford at this point. We’re here to tell you to take this budget and shoot under it a little. You’re going to need the breathing room. 

Cars, like any technology, have the habit of quitting at the worst possible second. You don’t want to have to take out a loan to get a new transmission. 

You also want to have room in your budget for other emergencies. If you own a house, you’ll have to use the cash in your wallet to pay for any needed repairs. You may end up having to go to the hospital, or you could lose your job.

Shop Around for Insurance 

Out of all the expenses that go into having a car, this is the one you can control the most. When it comes to getting insurance, it’s best to shop around. 

Call different places to get a price quote. Note that you’re not locked into an agreement because you got a quote. You can always hang up and call a company back later if you decide to go with them. 

Follow this step even if you already have an insurance provider. If someone else can offer a more reasonable rate, it’s okay to trade up. 

There’s Nothing Wrong With Going Used 

There’s a certain stigma that revolves around getting a used car. Everyone’s afraid that they’ll get a lemon or that the vehicle will stop running in a few months. As long as you are diligent, you can avoid these unfortunate scenarios and get a car that’s as good as something new. 

Cars depreciate in value over time. This begins to happen as soon as you drive that new car off the lot. That means when you go to sell the vehicle several years down the line, it’s not going to be worth much. 

You might as well go for the used car if the value is the reason why you’re getting a new ride. Used cars come with a high-interest rate most of the time, but they’re not as expensive as a new car. 

You would pay the same price for a new ride, you could get a used one with maybe not the best features, but they’ll be decent for what you get. 

Don’t Go Outside Your Budget

When you get to the dealership, the salesperson is going to try to talk you into going outside your budget. They aren’t scummy. Your purchase signs their paychecks, and a person’s got to eat. 

Set your limits before you start shopping around, and stick by them. If you don’t, you may find yourself hurting to make your payments each month. 

How Much Can You Afford to Add to Your Monthly Bill?

Before you go to the dealership, there’s one important question you need to ask yourself. “How much money can you afford for your car?” If you don’t budget correctly, your monthly expenses are going to take a huge hit. 

If you miss a bunch of payments, you’ll be back to square one. No car and a repo on your credit. Don’t let this happen to you. 

Consider all expenses when deciding if you can buy a vehicle and if you need more tips for affording one, visit the Cars section of our blog.