Owning a car nowadays is more necessary than ever before. With so many cities having limited transportation options and various employers issuing return to office mandates, it’s important to possess a vehicle of your own to live a regular daily life. However, if you’ve never bought a car before, you may wonder, “What car can I afford?” You may be worried about spending a lot of money on purchasing a vehicle, as the average prices for new and used cars can be pretty significant.
According to Kelley Blue Book, current market conditions for purchasing a new or used car are favorable for buyers across the United States. If you’re looking for the best time to buy a vehicle, now may be the most optimal moment to get started on your car search. It’s worth mentioning that the prices for buying new and used cars have begun to rise slightly. Several factors, like the recent tariffs, are influencing this surge in prices, so it’s essential to act quickly if you need a car to conveniently travel around your area.
Of course, the answer to what vehicle you can afford will depend on your salary and the year of the car you intend to purchase. Before you visit a dealership or speak with a private seller, ensure you take your earnings into account. Additionally, determine how much you’re willing to spend on monthly car payments. Check out car financing options today through Max Cash? and review car financing offers in real time! Through Max Cash’s partner, you can review options based on monthly payments, pricing, and more in real time. Or continue reading for more information about purchasing a car within your salary range.
What Car Can I Afford with a 40k Salary?
If you earn around $40,000 annually, you may be able to find numerous vehicle makes and models that won’t exceed your budget. However, its often recommended to purchase a used car, since many financial experts recommend not to have auto payments that are more than 10% to 15% of your monthly income.
If you buy a new car with a 40k salary, you may work with a larger monthly installment payment while factoring in different costs, such as your insurance, maintenance, and gas. You will find that a vehicle with a purchase price of approximately $14,000 to $16,000 is more affordable, as you might have a convenient monthly payment of no more than $500!
Whether you’re interested in a used Chevrolet Impala, Honda Civic, or another suitable make or model, you should double-check your loan amount with your dealer before you sign an agreement. If the cost to finance the vehicle even with a high down payment is too much, it will lead difficult payment schedule that far exceeds your take-home pay. Research and compare various dealerships to see the kinds of prices they offer, and don’t be afraid to go over your contract with a representative.
Check out some of the most effective ways you can manage an affordable car payment that can keep you within your budget plan:
- Reduce Fuel and Maintenance Costs By Limiting Your Time on the Road
- Focus on Your Auto Payments and Cut Back on Unnecessary Expenses
- Shop for Better Insurance Rates if Available Given Your Driving Record and Other Factors
- Plan for Unexpected Bills to Stay on Track with Your Installment Payments
What Car Payment Can I Afford?
The car payment you can afford as an individual will ultimately depend on your annual income and your unique budgeting preferences. If you make a decent annual salary and want a more flashy vehicle, you may not have a problem covering monthly payments that are a bit steep for average car buyers. According to recent data pulled from Edmunds, the average car payment in 2025 was over $700 a month for a new vehicle being financed for around $42,113. The Washington Post reported that some borrowers are paying over $1,000 or more per month on a car loan, a figure that is unrealistic for many Americans.
If you earn around $30,000 to $40,000 annually, you will probably benefit from lower installment payments that won’t drain your budget over time. Even if you want a luxury vehicle, you may not be able to afford that type of car if you earn under $50k and want to live more comfortably. Remember that you don’t have to keep up with the Jones, but you can still drive a nice car!
To determine a suitable car payment you can afford, you must first calculate your monthly income and set a target based on the expert recommendations. Remember, you should be aiming for a monthly installment payment between 10% to 15% of your take-home pay after taxes. If you have an estimated car payment and are interested in a specific vehicle make or model, you can try to negotiate a more reasonable price with the dealer to make your payment schedule more affordable. In the event that you need help figuring out a convenient car payment, you can ask for a financial expert’s advice. They may be able to assess your financial history and come up with a good loan amount that you can comfortably pay throughout your repayment process.
When asking, “What car can I afford?” ensure you take the appropriate measures to find a vehicle that fits perfectly within your budget range. Once you understand what portion of your net income you must take out to cover a car payment, you can easily decide which vehicle is best for you.
Is There a Calculator I Can Use to Determine What Vehicle I Can Afford?
Yes, there are many online calculator tools available that can help you discover what vehicle fits your current budget plan. However, it’s important to note that not every affordability calculator works the same and may differ in their approaches. For example, some calculators allow you to enter your desired monthly payment to see what loan amount and vehicle price you can afford as a buyer. With other online tools, you may have to provide details about your income, expenses, and other influential factors to find an estimated loan amount and monthly car payment.
When searching for a car payment calculator, you must compare all your available options to find a system that is the most convenient for you. Whichever tool you choose to work with, you can expect to enter the following general information to get an idea of how much you’ll pay for your desired car:
- Target Amount for Your Monthly Payment
- Estimated Interest Rate
- The Loan Term
- Price of Fees (Sales Tax, License, and Document Fees)
With some online calculators, you may have to provide information about your credit rating to receive an appraisal of your auto loan’s Annual Percentage Rate (APR). Don’t hesitate to ask representatives from various companies about their calculators to understand what details you need to put to get a car payment estimate.
Max Cash partners with car financing options that allow you to search for a car based on an estimated monthly payment that you can afford! Search for pre-qualified cars based on the monthly payment and down payment you can afford. You can shop real rates in real time, allowing you to find the most advantageous option for your finances.5
What Price Car Can I Afford?
Do you feel confident about buying a new or used car? Before you visit your nearest dealership, you must take your income into account and the current state of the economy. Find the most appropriate time window in the car market to purchase a vehicle at an affordable cost, and compare different dealerships to stick with a reliable option that offers the best prices. Doing thorough research about car price trends can give you a head start about what to expect as a prospective buyer. Don’t forget that it’s recommended that you only use a specific percentage of your income to buy a car, so find a vehicle that won’t disrupt your entire budget plan.
In the event that you take out an auto loan with a dealer and can no longer afford your payments, you can consider exploring your car financing options with Max Cash today!2 5 You can potentially find a lender that provides more optimal auto loan rates that can help you pay your vehicle over time without breaking the bank!² ? If you already have a car loan, don’t forget that you can explore refinancing rates today through one of our partners!
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