A common rule for a car payment budget is 10-15% of take-home pay. I consider these numbers a little high myself, but maybe I don’t budget well on other things. To put things in perspective, let’s take an example of a $50,000 per year salary. Say your take-home pay – after taxes, retirement, and insurance – is $36,000 a year, your focus should be on vehicles with no more than a $300 to $450 monthly payment.
Contributor: Alex Lauderdale founder of educateddriver.org