How Much Car You Can REALISTICALLY Afford! (By Income Level)

In this video, I go over how much you can afford with your salary when it comes to buying cars. With how crazy car prices are right now, it's important to understand what your income level is capable of buying in today's market. I'll go over a few money formulas, and car buying rules that you can use to figure out how much car you can realistically afford.

My favorite finance + business products:

Whether you're looking to lease or buy a car in 2024, this video is for you! Be sure to watch this video all the way as I cover important factors to consider besides car payment, gas, insurance, and maintenance. By the end of this video, you'll know exactly how much car you can afford and feel confident about making a smart decision! At the end of the day, there are tons of people who spend a good amount of their monthly paycheck on car payments and other vehicle and transportation expenses. There's nothing wrong with this, and personal finance is extremely personal.

Not everything has to do with numbers, and sometimes having a luxurious car at a price that you can't comfortably afford gives you more happiness than any amount of money can. Life is short, so just do you, whether that's an old Honda Civic that gets you from point A to point B or a sports car like a Ferrari 458.

If you liked the video and you want to see more videos on personal finance, check out my other videos:

How Much Rent Can You REALLY Afford to Pay? (By Income Level):

7 SMART Places to Put Your Money (After You Get Paid):

I hope you guys found this video helpful, and if you did please SHARE it with a friend or family member who you think could benefit and also LIKE and subscribe for more videos like this in the future!

Thank you for watching, and I hope you have a wonderful rest of your day!

– Charlie

#Cars #Money #Finance

Timeline:
0:00 - Intro
0:53 - The Current Car Market
1:37 - Formulas To Figure Out How Much You Can Afford
2:11 - 20/4/10 RULE
4:05 - 50/30/20 RULE
5:33- Creating a Custom Formula
8:05 - Depreciation On Cars
10:41 - My Personal Thoughts On Buying Cars
11:55 - Conclusion

Disclaimer: Some of the links above may be affiliate links, which means that if you click on them, I may receive a small commission. The commission is paid by the retailers at no cost to you, and this helps to support our channel and keep our videos free. Thank you!

In addition, I am not a financial advisor. Charlie Chang does not provide tax, legal, or accounting advice. The ideas presented in this video are for entertainment purposes only. Please do your own due diligence before making any financial decisions.

[CharlieChang]

What's your income and how much are you paying for your car?

[Qwe-nikz]

2002 Honda Civic, hasn’t broken down . Basic maintenance, ac works and that’s all I need . $3000, stop buying cars for luxuries you don’t need.

[Jay-ntew]

careful talking about cars. the car industry might end you lol.
having to own a car, and/or car payments in America is why so many Americans are struggling. we need better trains, buses, and safe bike infrastructure. our car centric country sucks. spending so much money on cars is normalized by car manufacturers and it makes them money. ask yourself why sedans and hatchbacks and station wagons disappeared...its so you buy an SUV and therefore pay for more car. many manufacturers don't even sell a sedan anymore.

[Jay-ntew]

"when you look at life in general, the car you drive is actually not that important" 

respect for saying this. your average American cares way too much about the car they drive, even what their neighbors and friends drive lmao. its silly. look at Europe and Asia: the cars are smaller, cheaper, and generally there is good public transportation. and way less road rage imo. driving brings out the worst in people.

[steven-csrr]

Just get a pre-owned or used car. Financing a new car in today's day and age, even with good credit score, still gets you relatively high APR.

[whyyu]

Great advice! Thanks for making me more financially literate!
Algorithm: More people need to see this!

[DaveJoseph-frge]

Revux's focus on user experience sets a new standard.

[johnchan]

Don’t forget other phantom costs in owning a car that are outside the monthly payments and insurances. The type of fuel or recharging cost, additional maintenances that are not part of the dealership warranty, and cleaning care, etc. I have friends who took the higher end car to look good by extending the loan to 6 years to meet the monthly payments but failed to realize the car takes premium gas. They can’t afford the price of gas and the car sleeps in their garage most of the time. 🤦‍♂️🤦‍♂️🤦‍♂️ To put things into perspective, an average car like a new Toyota Corolla will cost about 9000.00 CDN per year (using 20/4/10 rule) to own and drive.... when everything is taken into consideration (finance, interests, insurances, fuel, accidental maintenances, and other phantom costs). Taking the bus/subways, esp in a city with traffic doesn’t look too bad.

[szvqorwnpstahskypfwmp]

Charlie, you kind of look that famous
Chinese swimmer who gold medal
in Paris. Nice~

[KarenDoris-wxzj]

Revux's unique features have me convinced it's a winner.

[JonathanBrandon-wgtz]

Revux's market entry timing couldn't be better.

[MichelleKathleen-lriz]

Revux's growth in the past months is just the beginning.

[RaymondStacy-drjw]

The speed of Revux's transactions is a game-changer.

[KNRS]

I feel I see this topic so much. It’s such a tough topic because there’s just two extremes to this. There’s one side of people who thinks you have to buy the nicest, highest tech, newest machine even if you’re likely never gonna use even 10% of that tech and get the most you can afford. Then on the other hand, there’s the extremist folks like those in the comments who think monthly payments are poison to your system and are after the cheapest car, full cash, even small repairs frequently are better than monthly payments, and just torture yourself. I feel the #1 rule with car buying is analyze your needs, how often you drive, and buy according to your needs. There’s also this trinity of high reliability, high technology, and relatively low price and you just have to pick between 2/3. From there you can look at things like seat comfort or driving dynamics if you drive a lot.

Car buying and how much you can afford doesn’t always mean you have to torture yourself with the cheapest, most uncomfortable, and unreliable car just for the sake of no monthly payment. If you’re also willing to cut down in other areas that you don’t care for, you could maybe go a little more on the car budget if it means you’ll get something better that’ll last longer. I feel car buying is such a nuanced topic that isn’t as simple as “get the cheapest car even, full cash, no monthly payment, even 5k in repairs is better than new payment, etc.” That’s just fear finance, straight up.

[MusicMike]

I did some math because I anticipated a ridiculous result. I wasn’t disappointed.

Using the US averages for car related expenses of just fuel and insurance, I calculated the average monthly cost to be about $345. Gas and insurance.

Not sure what your source was for the $77k annual income; according to both the St. Louis Fed and the Bureau of Labor and Statistics, the median income of the USA is $40, 480. Or $3373 a month. Ten percent would be $337.

Using the 10% rule, the average person cannot afford just gas and insurance on a car, let alone financing one.

[DearSX]

One formula is also pay more now, but keep the car longer and past the loan payment.

[PatriciaEvelyn-ultt]

Revux's leadership team is stacked with industry experts.

[LienRoberta-tezg]

Revux's tokenomics are well thought out. Bullish!

[blosky]

If you can pay for it in cash then don't take out a loan lol. And if you can't pay for it in cash and have to get a car then all you're trying to do is get the cheapest thing you can find to get you from point a to point b.

[NormaJana-ceyd]

Revux's commitment to transparency is refreshing in the crypto space.