Probably a lot more than you think. While car prices have increased steadily over the years, the economy and struggling car companies have made owning a new car more affordable than ever. There's also a good reason why a lot of vehicles are priced right at or under $25,000. It's a psychological number that many people think of as an amount they can afford. On this list you'll see a number of popular vehicles that come in at this number.
Just because the $25,000 price point is common, and somewhat affordable, don't be tricked into thinking it's acceptable to drop that kind of money on a new car. In fact, if you were to finance a new $25,000 vehicle without any money down you'd likely have a payment of around $500/month on a 5-year loan. That's more than double the average auto expense in the country. You'd need to put about $10,000 down in cash before you can get your monthly payment down to the national average. Calculate it for yourself.
An even better idea would be to skip the new car completely and buy used. Most vehicles depreciate 15-25% each year, so if you buy a used car instead of new you can let someone else take that initial depreciation hit in the first year or so while you get a slightly used car at a nice discount.
Just because the $25,000 price point is common, and somewhat affordable, don't be tricked into thinking it's acceptable to drop that kind of money on a new car. In fact, if you were to finance a new $25,000 vehicle without any money down you'd likely have a payment of around $500/month on a 5-year loan. That's more than double the average auto expense in the country. You'd need to put about $10,000 down in cash before you can get your monthly payment down to the national average. Calculate it for yourself.
An even better idea would be to skip the new car completely and buy used. Most vehicles depreciate 15-25% each year, so if you buy a used car instead of new you can let someone else take that initial depreciation hit in the first year or so while you get a slightly used car at a nice discount.
