How much car can I afford?
Some quick stats:
- FICO 8: 705 (EX), 714 (EQ), 754 (TU)
- Note: I do have ~20% utilization on one card, but will be paying it off this week. I also have a number of inquiries on Experian that will count against my score until June/July.
- Income: $38,000
- Current debt: Will be $0 after next paycheck
- Monthly expenses:
- Rent and utilities: $1000
- Groceries: ~$250
- Miscellaneous spending: Rarely over $50
A car is quickly becoming a necessity, as my better half's vehicle has turned into a money pit. I'm not looking to buy until the summer unless absolutely necessary due to inquiries unless her car just completely craps out before then so inquiries can age and boost my score a bit more. I'm currently preapproved for a $40k loan at 10% or a $25k loan at 5% through Capital One and Chase, but I don't feel like I need (or can realistically afford) that much car unless I can get a lower interest rate.
I've set $15,000 as a tentative upper limit unless I can somehow convince my credit union to consider an interest rate under 3% (they go as low as 2.5). If I'm able to wait a few months, I should be able to save up for almost 20% down on a $15k car, but I'm primarily hoping for a quick sanity check to make sure I'm not trying to stretch myself too thin.
Posted Mar 14, 2021, 9:05 PM UTC
You have no business buying either of those cars. at your income you should be buying a car cash
I already know I can't afford that much; I already mentioned as much in my post. Those are just the numbers Auto Navigator and Chase Credit Journey spat out when checking out of curiosity. Even if I could afford a $40k or $25k car, I certainly wouldn't be doing so at those interest rates.
so how much cash do you have to buy a used car
The post clearly states he can’t pay cash, and is preparing for the time when a money pit car dies. Impossible standards won’t help.
I do not agree that a new car is the best answer. A three year old CPO car - any of the ones you mentioned - will be available at a lower cost and with lots of warranty left. Good luck.
OP just says he can save up 2 to 3k in cash and he has credit card debt
Currently none because I've been paying down credit card debt from when I was younger and more foolish, but I'll be able to save up around $2-3k if my girlfriend's car can wait about 3-4 months to die.
I have a used Toyota Highlander that I bought for our second car around 12k with 4K down and the monthly payment is around $250 which has been doable. You have that much in your monthly budget.