How much car can a $70,000 salary buy? That’s a question that many people are asking these days. The answer may surprise you!
Let’s take a look at what kind of car you can buy with a salary of $70,000. We will also discuss some of the factors that play into how much car you can afford. So, whether you’re thinking about buying your first car or just curious about what’s out there, read on for more information!
The 20/4/10 Rule of Car Buying
When it comes to car buying, there’s a general rule of thumb that many people follow: 20% down payment, 4-year loan, and 10% of your monthly income. This rule is often referred to as the 20/4/10 rule, and it can be a helpful way to keep your car purchase affordable. You can use a car payment calculator to see how it works:
For the down payment, you’ll want to put down at least 20% of the total cost of the car. This will help you avoid having to finance too much of the purchase price, which can lead to higher interest payments.
As for the loan length, most financial experts recommend keeping it at four years or less. This will help you keep your monthly payments lower and pay off the loan more quickly.
Finally, 10% of your monthly income should be the maximum you spend on your car payment and related expenses like insurance and gas. By following this guideline, you can help ensure that your car purchase doesn’t stretch your budget too thin.
Using the 20/4/10 rule and a $70k salary
If your annual salary is $70,000 and you’re looking to buy a car, here are the calculations for using the 20/4/10 rule.
A monthly salary (70,000/12) = $5,800
This means that you can spend up to $580/month on all car expenses. This includes not only your car payment, but your insurance, car maintenance, gas, and taxes and registration.
According to Capital One, we can assume these monthly figures:
- Insurance: $57
- Car maintenance: $46
- Gas: $129
- Taxes and fees: $25
This leaves you with $323 to spend on your monthly car payment.
Using an average interest rate, and a car payment calculator, you can afford a $19,000-20,000 car on a $70k salary using the 20/4/20 rule of car buying.
Best Cars to Buy Under $20k
You don’t have to spend a lot of money to get a great car. In fact, there are plenty of great options out there if you’re working with a budget of $20,000 or less. If you’re looking for a reliable and stylish ride, here are four of the best cars you can buy for under $20,000.
The Honda Civic is one of the most popular cars on the market, and for good reason. It’s reliable, efficient, and has a spacious interior. The Civic also comes standard with a number of features that are typically optional on other cars, such as Bluetooth connectivity and a rear-view camera.
The Toyota Corolla is another great option if you’re looking for a reliable and affordable car. Like the Civic, it’s fuel-efficient and comes standard with a number of features that are usually optional on other cars. The Corolla also has a spacious interior and a comfortable ride.
If you’re looking for an affordable SUV, the Honda CR-V is a great option. It’s one of the most popular SUVs on the market, and for good reason. It’s spacious, efficient, and comes standard with features like all-wheel drive and a rear-view camera.
Finally, if you’re looking for an affordable sedan, the Toyota Camry is a great choice. It’s comfortable, efficient, and comes standard with features like Bluetooth connectivity and an infotainment system. Plus, it has a spacious interior and a smooth ride. Whichever car you choose, you can rest assured that you’re getting a great value for your money.
How to Afford More Car
Save up more than 20% for a downpayment
If you want to follow the 20/4/10 rule but need to spend more, then you can choose to save up more than 20% for your down payment. For financial assistance, consider seeking help from a licensed money lender in Singapore. Doing so will help you keep your monthly payments low and avoid being upside down on your loan. Additionally, it’s a good idea to have an emergency fund in place before buying a car so that you can cover any unexpected repairs or maintenance costs.
Trade in your old car for more credit
One option is to trade in your old car for credit toward the purchase of a new one. Trade-ins are often calculated based on the Kelley Blue Book value of the vehicle, so it’s important to do your research before heading to the dealership. However, if you have an older car that isn’t worth much, trading it in may not be the best option. In such cases, it may be better to sell the car privately and use the proceeds toward the down payment on a new one.
Buy a used car to get more bang for your buck
Used cars are often just as reliable as new cars, and they come with the added benefit of being significantly cheaper. In fact, used cars are such a good deal that they often sell for less than their Kelley Blue Book value. You may be able to stay within the 20/4/10 rule by choosing a used car over a newer model.
Location affects Car Affordability
The average car costs around $30,000, but is this possible on a salary of $70,000. The answer is that this varies depending on location and other factors.
- In expensive cities such as New York or San Francisco, the average person would only be able to afford a $20,000 car on a similar salary.
- In rural areas or small towns however, the same person could probably afford a $50,000 car.
- There are many things to consider when purchasing a new vehicle such as gas mileage, depreciation rates, and monthly payments.
It is important to do your research and find the best deal for you before making any large purchases.
If you’re looking to buy a car on a salary of $70,000, it’s important to do your research and find the best deal for you. Depending on your location, you may be able to afford a more expensive car. However, it’s also important to consider other factors such as gas mileage and depreciation rates. Ultimately, the best car for you is the one that fits your needs and budget.