How much can I afford for my car?

Question

How do I figure out what I can afford for my car lease that I am taking out?

I was looking at a $425.00 lease for 36 months.

What kind of salary would someone need to afford this?
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Answer 1

don't over work yourself. make as much money as you can

Answer 2

Don't lease unless you can write the payments off as business expense.

The rule I've always lived by is if I can't afford the payments on a 4 year loan, I can't afford the vehicle. If you feel you can afford a payment of $425 a month for 3 years, buy a car that will be paid for in 3 years with that payment. That would probably be somewhere in the $15,000 range, total delivered price, if you can get a 0% loan. With a standard loan around 8%, you're probably down to $13K.

When I sold real estate, the formula for qualifying a buyer was 28% of their monthly income could go for the total house payment, and no more than 36% could go for house plus other debt. Often, the house payment came in at around 25% so they had more room for a car and other debt.

You can safely go as high as 40% of monthly income for your rent and house payment plus a car loan, if you don't have other debt such as credit cards, student loans, etc. Figure out what that 40% figure is for your income, subtract your housing expense and other debt (the actual student loan payment, and for credit cards, NOT the minimum payment, but the total debt divided by a reasonable time to pay it off, 24 months), and that is a safe figure for a car loan.

Answer 3

Most banks will look at your debt to income ratio. {most won't allow you to spend over something around 66% of your income.}

I would decide what brand of vehicle you want and contact your local dealer and ask what lease options they have for 36 months, once you find someone helpful, remember them.

Answer 4

thats depends on there other bills and the insurance we cant answer this question on the info youve provided