Car affordability
APR (%)7.5
Loan term (years)5
Monthly car payment (P&I)
$501
Loan $25,000 @ 7.5% for 5 yrs
Total monthly transport
$851
Payment + insurance + fuel + maintenance
% of take-home
19.4%
Aggressive — tight but doable
Recommended transport budget
Conservative (10% of take-home)$438
Balanced (15% of take-home)$658
You're at 19.4% — aggressive — tight but doable.
Transportation rule of thumb