What Car Can I Afford With 100k Salary you might be eager to get behind the wheel of a dream car. But what’s realistic on this budget? Let’s explore what kind of car you can afford without stretching your finances too thin.
A widely accepted guideline for budgeting car payments is the 36% rule. It suggests that your total debt servicing, including car loans, mortgage, and credit cards, should not exceed 36% of your income. For a $100k salary, this means you can allocate up to $36,000 annually toward all your debts.
Calculating the car budget using this rule is relatively straightforward:
- Calculate Your Monthly Salary: Divide your $100,000 yearly income by 12 months to get $8,333 per month.
- Determine 36% of Your Monthly Salary: Multiply $8,333 by 0.36 to find that your maximum monthly debt service is $3,000.
- Account for Existing Debt: Consider your current financial obligations, such as mortgage and credit card payments. For instance, if your mortgage and credit card bills amount to $2,200 per month, subtract this from your maximum monthly debt service: $3,000 – $2,200 = $800.
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Based on this calculation, you can comfortably afford a car payment of up to $800 per month.
However, remember that factors like the loan duration, down payment, credit rating, and interest rates play a role in determining the specifics of your car financing. To provide a more practical perspective, let’s consider what cars you can afford with a $100k salary.
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For new cars, within this budget, you can explore options such as the 2023 Honda CR-V, Subaru Forester, Mazda CX-5, Volkswagen Atlas, and Kia Telluride. These models offer a blend of style, performance, and affordability.
If you’re open to the used car market, you can get behind the wheel of vehicles like the 2012 Jeep Grand Cherokee, 2015 Nissan Rogue SL, 2018 Ford Escape S, or 2015 Honda Accord Sport. While they might be a few years old, they still provide excellent value for your budget.
Ultimately, the type of car you choose will depend on your preferences, needs, and financial goals. So, whether you’re eyeing a brand-new sports car or a reliable used vehicle, the key is to stay within your budget while indulging in your automotive passion.
