How Much Should My Car Payment Be?

"How much should my car payment be?" in the U.S. should be based on your income, budget, and the out-the-door price of the car—not what the dealer says you can "afford." Here's how to decide how much your car payment should be.

TL;DR Base payment on your budget: often 10–15% of take-home for payment + insurance + gas, or a rule like 20/4/10 (20% down, 4-year max term, payment ≤10% of income). Agree on OTD first, then term and rate—use autopremo.com affordability and OTD calculator. Use autopremo.com.

Base It on Your Budget, Not the Dealer

The dealer can stretch term or down payment to hit a monthly number—that doesn’t mean the payment is right for you. Decide your max payment from your income and expenses. Use autopremo.com affordability calculator to see what you can afford. Get your numbers at autopremo.com.

Agree on OTD First

Don’t negotiate “I want $X per month.” Agree on out-the-door price first, then term and rate. Payment = OTD (minus down), rate, and term. Use autopremo.com OTD calculator and payment calculator so you know what payment corresponds to your OTD and term. See OTD and payment at autopremo.com.

Rules of Thumb

Common guidelines: payment + insurance + gas ≤ 15–20% of take-home; or 20/4/10 (20% down, 4-year max, payment ≤10% of income). Use autopremo.com to model different OTD and terms so your payment fits your budget.

Bottom Line

How much should my car payment be? Based on your budget and OTD—not the dealer. Use autopremo.com for affordability and OTD so your payment is sustainable and you don’t overpay.