Based on My Income, How Much Should I Budget for a Car?

Based on My Income, How Much Should I Budget for a Car? post
November 18, 2022 | Used Leasing

Dreaming of a shiny, new car with all the features you’re craving, like a leather interior, generous infotainment screen, and so much more? Prepare for a sticker shock. According to 2021 figures from the KBB, the average new car costs over $47,000, while the average used car comes in above $27,000. Of course, you can find new or used vehicles well below those figures, but they often don’t include all the features you need for a safe, comfortable, and engaging ride. So, how much should you budget for a car? And will you get all the features you’re looking for? Read on for all the answers.

How Much Should I Budget for a Car?

As you’re looking for a car that fits your budget and has all the features you need, remember that the purchase price is only one part of the equation. You also have to think about maintenance costs, insurance, and much more.

Here’s how to calculate how much you can afford to spend on a car:

  • Calculate the income you receive each month after taxes, or your take-home pay. Most experts recommend spending between 10 and 15% of your take-home income on a car—and that includes everything from the car itself to insurance and fuel. For example, if your take-home pay is $3,000 per month, it’s wise to spend between $300 and $450 per month on your transportation costs.
  • Existing debt. If you carry debt like credit card balances, medical bills, student loans, or anything else, the payments can take a big bite out of your income. Consider all debts as you budget for a new ride.
  • Car insurance premiums aren’t just based on your driving record—the year and type of vehicle you drive make a big impact. Generally, new, more expensive cars cost more to insure.
  • While it’s difficult to estimate the exact cost of repairs as you drive a vehicle, all cars need maintenance at some point. Older cars may need a tune-up or new tires, or even more expensive repairs to the brakes or drivetrain.

Leasing a Used Vehicle Is a Budget-Friendly Option

Looking to save on your transportation expenses, but don’t want to give up on your dream of a gorgeous car that has all the infotainment and safety features you’re craving? Leasing a used vehicle is the answer! When you lease used rather than finance or lease a new vehicle, you enjoy much lower monthly payments. In some cases, you can negotiate coverage for maintenance, eliminating the worry about unexpected repair costs as you use the vehicle.

Used leases are often available for vehicles that are just two to three years old. That means you get all the latest and greatest features, like easy-to-use touchscreen infotainment systems to adaptive cruise control, and everything in between.

Since the most significant depreciation has been covered by the previous owner, you’ll enjoy lower monthly payments, and insurance premiums are lower, too. In short, leasing used helps you get the best bang for your buck, so you can get a nicer ride than you expected without breaking your budget.

Leasing Used Helps You Get a Great Car That Fits Within Your Budget

Looking for a new-to-you ride, but don’t want to break your budget? Leasing used is the affordable solution, allowing drivers to secure a nearly new vehicle that’s packed with the latest features, all at an affordable monthly price. The used car leasing financing experts at Drivrz Financial are here to help. Call us today at (800) 436-0476, and we’ll connect you to a participating dealer near you!

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