A 70k salary can seem like a lot of money, and it is a decent income in many parts of the world. However, when it comes to buying a car, you have to consider several factors before deciding what you can afford. These factors include your monthly expenses, debts, savings, and the cost of the car including taxes, insurance, and maintenance.
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This guide will help you determine what car you can afford with a 70k salary and provide a list of cars with low monthly installments.
Factors to Consider
- Monthly Expenses: Make a list of all your monthly expenses including rent or mortgage, utilities, groceries, and any other regular payments. Subtract these expenses from your monthly income to determine how much money you have available for a car payment.
- Debts: Consider any other debts you have, such as student loans, credit card debt, or other loans. The total amount of your debts will affect how much you can afford to spend on a car.
- Savings: It is essential to have a savings cushion for emergencies. Financial experts recommend having at least 3-6 months of living expenses in a savings account. Make sure you have enough savings before taking on a car loan.
- Car Expenses: Consider the total cost of the car, including the purchase price, taxes, insurance, maintenance, and fuel. It is recommended not to spend more than 15-20% of your monthly income on car expenses.
Calculating What You Can Afford
Once you have considered all the factors mentioned above, you can calculate how much you can afford to spend on a car. Here is a simple formula to help you determine your budget:
Monthly Income – (Monthly Expenses + Debts + Savings) = Car Budget
For example, if you make 70k per year, your monthly income before taxes would be approximately $5833. If your monthly expenses, debts, and savings total $3500, you would have $2333 available for car expenses. It is recommended not to spend more than 15-20% of your monthly income on car expenses, which would be $875 to $1167 in this example.
List of Cars with Low Monthly Installments
Here is a list of cars with low monthly installments that you may be able to afford with a 70k salary:
- Honda Civic: The Honda Civic is a reliable and fuel-efficient car with a low monthly installment. The starting price is around $21,700.
- Toyota Corolla: The Toyota Corolla is another reliable and fuel-efficient option with a starting price of around $20,000.
- Hyundai Elantra: The Hyundai Elantra is a compact car with a starting price of around $19,650.
- Ford Focus: The Ford Focus is a compact car with a starting price of around $19,000.
- Chevrolet Malibu: The Chevrolet Malibu is a midsize sedan with a starting price of around $22,140.
- Subaru Impreza: The Subaru Impreza is a compact car with a starting price of around $18,795.
- Kia Soul: The Kia Soul is a compact SUV with a starting price of around $17,590.
list of Cars I Afford with a 70k Salary
With a $70,000 salary, you might be able to afford a variety of new or used vehicles, depending on your other financial obligations. Here’s a list of new cars you might consider, although you should also take into account other costs such as insurance, taxes, and maintenance:
- Honda Accord: A reliable and fuel-efficient midsize sedan with a starting price around $25,000.
- Toyota Camry: Another reliable and fuel-efficient midsize sedan, starting around $25,000.
- Subaru Forester: A compact SUV with a starting price around $25,000.
- Hyundai Sonata: A midsize sedan with a starting price around $24,000.
- Ford Escape: A compact SUV with a starting price around $25,000.
- Chevrolet Equinox: A compact SUV with a starting price around $24,000.
- Honda CR-V: A compact SUV with a starting price around $26,000.
- Kia Sorento: A midsize SUV with a starting price around $30,000.
- Toyota RAV4: A compact SUV with a starting price around $27,000.
- Ford Fusion: A midsize sedan with a starting price around $23,000.
Remember, the total cost of owning a car includes not only the purchase price, but also insurance, taxes, maintenance, and fuel. Additionally, you should consider your other financial obligations and goals, such as paying off debt, saving for retirement, or buying a home. It’s always a good idea to consult with a financial advisor or use an online car affordability calculator to determine how much car you can afford.
Conclusion
With a 70k salary, you may be able to afford a car with a monthly installment of around $875 to $1167. However, it is essential to consider all your monthly expenses, debts, and savings before deciding on a car budget. Additionally, consider the total cost of the car, including taxes, insurance, maintenance, and fuel.
Remember, it is always better to be conservative with your budget and not overextend yourself financially.