that is going to depend very heavily on your credit rating and what kind of interest you can get on the loan.

2% interest vs 5-7% interest on a 30k car is a big difference in price by at least 150-200 a month (depending on loan duration)

i know right now i pay 553 a month for my challenger at 2% interest on a 36k loan ( i took out ~4500 extra for some hunting stuff i wanted to buy / build)

if my credit score wasnt in the 800 range, and i had to pay like 12% interest like some of my friends, that 553 a month payment would be at least 750-800 a month (depending again on duration of loan you apply for)

shorter car loan is usually less interest but bigger payments vs long duration loan is higher interest with lower payments.

dont ever buy a car that cost more than what you make in a year.

I said *could be*................

after tax Ill be making 59k

does that mean thats my limit?

He said that he has 33k left over after his expenses over three years.

More than enough to purchase a sub 40k car.

This post was edited by stupidkid282 on Oct 22 2014 07:26pm

Don't listen to him, You're fine.

when you go for a loan they look specifically at your debt to income ratio.

They take your debt/loan and divide it by your take home salary and it comes up with a number. Most banks will require you to be at or under 42-45% debt to income before they even issue a loan of that size.

if you happen to be over for a 4 year car loan, you can extend it to 5 years to being the percentage down and maybe even to 6years depending on bank.

also your credit score as i mentioned before will impact that payment a lot and the debt/income percentage along with duration of loan..

take that into consideration also.

This post was edited by TURBO_DODGE on Oct 22 2014 07:41pm

Student loans does it again.

yeah any outstanding debt that comes up on the credit report will impact that percentage.

so ill run through this quick then. if you want a 40k car, and take out a 5 year standard car loan, thats 8k a year in payments.

8k a a year in payments is only 13.5% debt to income (assuming your 59k after taxes/take home cash a year).. faaaaar under the limit..

so just take whatever your student loan payments are for an entire year, add it to that 8k, and then divide that by the 59k you stated, move the decimal to the right two spots and you got your debt to income percentage. If its under 42-44%, you are golden..

And even if you are close, as i said before, you can extend the loan to 6 years giving you some extra breathing room.

This post was edited by TURBO_DODGE on Oct 22 2014 07:49pm

Yeah Im under, I think my payments will be like 6k a year but I plan on paying maybe 10