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Car Affordability
Compare new vs used cars against your salary. Includes payment, tax, insurance, fuel, and maintenance â the true monthly cost of ownership.
You
$
$20,000$300,000
Vehicle prices (before tax)
$
$15,000$120,000
$
$5,000$80,000
Financing
$
$0$50,000
$
$0$50,000
%
015
%
018
mo
1296
Monthly operating costs
$
$50$500
$
$0$500
$
$0$300
New car
$1,194/mo all-in
25.8% of take-home
MSRP$38,000
Tax$4,940
Financed$38,940
Loan payment$762/mo
Total interest$6,774
Total cost$49,714
Used car
$896/mo all-in
19.4% of take-home
MSRP$22,000
Tax$2,860
Financed$20,860
Loan payment$428/mo
Total interest$4,818
Total cost$29,678
Our take
On a $75,000 income, the 15% rule says your all-in vehicle costs shouldn't exceed about $938/month.
New car
$1,194/mounaffordable
Used car
$896/motight
PFC consensus
A car is a depreciating asset. Buy a reliable used car (3-5 years old), aim for total monthly cost (payment + insurance + fuel + maintenance) under 15% of take-home, and don't finance longer than 60 months. New cars lose 20% of value in year 1 and 50% in 5 years.