How much to spend on a car


Ever wonder how much you should spend on a car? There are many online calculators that let you calculate how much, based on a proportion of income. Well that is all fine and good, but what about taking people's lifestyles into account? Obviously, if you drive 4 hours a day then you should spend more on a car than if you drive 1 hour a week.


Another way to figure out how much you should spend on a car is to look at the amount of time you spend at home versus the time you spend in a car. In other words, the annual cost of your car versus the annual cost of your house should be proportionate to the amount of time you spend in each.


And of course, we adjust the calculation for the different depreciation and operating costs of a house versus a car.


So how frugal are you with cars? Fill in your information below and see for yourself.

Calculator

Please correct the highlighted information and try again.
1. How do you spend your time?

Weekdays

Weekends

Work, hours per day    
Car, hours per day    
Home, hours per day    
Other time spent outside the house    
Total (should be 24) 0 0
2. Driving Vacations / Road Trips
Number of driving vacations per year   
Number of hours in your car, per vacation   
3. Tell us about the house
 Monthly Rent  
 Furniture Value  
 House Value  
 Furniture Value  
 Monthly Maintainence  
 Annual Property Tax  
 Mortgage Interest Rate %   
4. Tell us about the car you would like to purchase
Car Age 
How long do you plan to keep it? 
Interest Rate %    

This calculator assumes that you get equal satisfaction from having a nice car as that you get from a nice home. It only takes into account the information that you filled in above. Here are some things that are *not* taken into account:

  • Since we are only calculating how much you should spend on the car, and not the house, this calculator assumes that you have made a good (and frugal!) choice with your home.
  • A newer or more expensive car is likely to be safer in an accident.
  • A newer or more expensive car is less likely to leave you stranded
  • A hobby car cannot be evaluated using this calculator, as the purchase is based on enjoyment value, not utility.

*This calculator adjusts the calculation for the different depreciation and operating costs of a house versus a car.

*This calculator assumes that the annual cost of your car versus the annual cost of your house should be proportionate to the amount of time you spend in each.

For entertainment purposes only.
Concept and calculator Copyright © 2009-2024, BeFrugal.com. All Rights Reserved.


For more savings, see Priceline Coupons and Advance Auto Coupons.


Ella says...
HA! It spit out exactly the amount I was thinking about spending on a new car I test drove this weekend. Pretty neat.
- Over 1 year ago. Monday, January 21, 2013 12:49 PM


Paul says...
Nice! I was just slavering over an Audi A7 (with options, priced at $77K). Then the calculator recommended $78K for me! Fate! But I want to pay cash and adjusted the interest rate to 0.001% it recommended $124K! I really like the logic, but i would prefer if it looked at my actual monthly costs based what it is inferrign my mortgage to be - but it gives me food for thought - thanks !
- Over 1 year ago. Wednesday, December 5, 2012 10:49 AM


sean says...
How come they don't ask your income???
- Over 1 year ago. Saturday, October 13, 2012 3:31 AM


Jen From BeFrugal.com says...
Hi Sean, The How Much To Spend On A Car free tool takes people's lifestyles into account. There are many online calculators that let you calculate how much, based on a proportion of income. This one tries to figure out how much you should spend on a car by looking at the amount of time you spend at home versus the time you spend in a car. Jen from BeFrugal.com
- Over 1 year ago. Monday, October 15, 2012 10:55 AM


David says...
How about this EASIER calculation. Your car should cost about 10-20% (depending on how much you want to spend) of your home. How about that? By default it considers how much you earn (by the price of your house).
- Over 1 year ago. Thursday, September 13, 2012 7:24 PM


David says...
468K is what I got.. Seems a TAD off to me LOL.
- Over 1 year ago. Thursday, September 13, 2012 7:19 PM


Jen From BeFrugal.com says...
Hi David, Thanks for both your comments. We appreciate hearing feedback from those who use our free tool. The How Much to Spend on a Car Tool tells you how much you should spend on a car based on the amount of time you spend at home versus the time spent in your car. In other words, the annual cost of your car versus the annual cost of your house should be proportionate to the amount of time you spend in each. Glad to help you, Jen from BeFrugal
- Over 1 year ago. Thursday, September 20, 2012 4:37 PM


Cestode says...
Suggested value, $1,542? Huh??!!! I did check the "new Car" tab and I did say that I wanted a vehicle to last 10 years. I also said I do about 11 road trips a year. In NO WAY can you find a car for $1,542 that can meet my needs.
- Over 1 year ago. Wednesday, June 20, 2012 10:20 AM


Jen From BeFrugal.com says...
Hi Cestode, Thanks for your note. The calculator does not find you a car for that value; it is a free tool to help you determine how much to spend based on your lifestyle. Jen from BeFrugal.com
- Over 1 year ago. Wednesday, June 20, 2012 2:47 PM


amber says...
This is eerie. I love it. Totally showing this to my bf as an excuse why it makes perfect sense for me to buy the 21K car I have my eye on. (Calculator gave me $20K and change.)
- Over 1 year ago. Tuesday, April 17, 2012 5:37 PM


Tammie says...
How do you use combined household income? I am a part time employee and my husband is full time. That is how we would go in for a car loan. But your questions are for singles, not couples.
- Over 1 year ago. Wednesday, March 7, 2012 1:39 PM


Jen From BeFrugal.com says...
Thanks for your feedback, Tammie. We are always interested in hearing suggestions on our free tools. - Jen from BeFrugal.com
- Over 1 year ago. Wednesday, March 7, 2012 2:19 PM


Randy says...
Great way to convince someone to spend more for a vehicle than they should.
- Over 1 year ago. Saturday, March 3, 2012 1:43 AM


Michael Houle says...
This is silly. It doesn't take income into account. Shouldn't I spend X percentage of my income on a car with the X being related to usage? Here is my complaint: If I spend 1000 on rent, they think I should spend 7K on a car if I spend 2000 on rent, I should spend 17K on a car. So if I have less disposable income I should spend more of it on a car I use 10 hours per week? Please add income to your calculator.
- Over 1 year ago. Tuesday, November 1, 2011 5:10 PM


Jen From BeFrugal.com says...
Hi Michael, We appreciate your input. Thanks for sharing your suggestion with us. Regards, Jen from BeFrugal.com
- Over 1 year ago. Thursday, November 17, 2011 11:47 AM


Jen From BeFrugal.com says...
Hi Michael, Thanks for leaving your comment. We do appreciate your suggestion and feedback. There are many online calculators that let you calculate how much to spend on a car based on a proportion of income. This tool was created to take people's lifestyles into account.
- Over 1 year ago. Wednesday, November 23, 2011 10:11 AM


j says...
Suggested Car Value: $844,809.71 What the ???!!!!!
- Over 1 year ago. Tuesday, September 20, 2011 10:44 PM


SW says...
I put in figures 3 time but get messages: total has to be 24 hours (23 plus 1 is 24, so is 14 plus 10) and house value cannot be 0 (I put in my amounts). How can I successfully use the calculator?
- Over 1 year ago. Monday, July 4, 2011 12:19 PM


Akw says...
Every time I enter my information and press 'calculate', it comes back and tells me that I can't enter 0 as the price of my house. I keep entering the price of my house and my daily hours, but it keeps erasing them and telling me that they haven't been entered! Argh!
- Over 1 year ago. Monday, May 2, 2011 4:12 PM


Mrs. Executive says...
I was looking for exactly this! What sort of price range should I be looking at given my lifestyle and my driving experience. I was out looking at a new car today and wanted to see if I was on track with my thinking. I own my home outright ($560,000.00 in Northern California- Silicon Vally area) and although I would like a fancy fancy vehicle it seemed a bit much when I could do so much more with the actual cash. I budgeted approx. $50,000.00 for a mid-priced luxury Mercedes and this calculator came up with $53,000.00 for me. So as far as this woman is concerned it is pretty right on. I too do NOT carry any debt nor do I intend to. I also love the logic of the set percentages as I was not thinking inline of lost revenue for monies spent. The comments about this calculator that are negative seems to be from people either who live quite minimally or are in a lower tax bracket. If your entire household furnishings are equal to only $5,000 why on earth would you want or think you should afford a $14,000 vehicle. My teenage daughters home furnishings are worth about that and she could only afford a $1,500 vehicle.
- Over 1 year ago. Sunday, March 27, 2011 2:13 AM


CarHound says...
This calculator was a lot of fun to play with, and regardless of how "accurate" the results are, you do make an important point about balancing the value of your major possessions. If the seats in your car are nicer than your living room sofa, you may need to revisit the concept of balance.
- Over 1 year ago. Thursday, November 4, 2010 4:48 PM


kasey says...
What complete absurdity. This must be satire. They are figuring out how much you can afford for a car without looking at your income or obligations? I hope nobody is taking this seriously.
- Over 1 year ago. Saturday, October 23, 2010 7:25 PM


JS says...
Awesome. If I work one hour a day during the week and live in my car on the weekends I can afford a car that costs $7,424,855.21. Gold plated Lamborghini here I come!
- Over 1 year ago. Saturday, September 25, 2010 12:09 AM


ezeus says...
$617.46 to buy a new car that I can keep for 12 years? Is this a monthly payment? I wish I could buy a new car for this price.
- Over 1 year ago. Thursday, September 23, 2010 10:14 AM


Jenn says...
The calculator did not take into account income level or local housing market dynamics. Where I live is one of the least expensive housing markets in the country, so it assumed I lived in a dump. It did not consider my income is close to US mean.
- Over 1 year ago. Wednesday, September 22, 2010 8:54 PM


Sneeje says...
Is the total amount calculated taking into account the FV of the car including the interest rate?
- Over 1 year ago. Wednesday, September 22, 2010 4:19 PM


Toby says...
There's a minor coding error on this calculator, the closer I approximate zero the larger the value of the car I can afford. If I get out to 1.0x10^-9 it's about equal to the total world economy...
- Over 1 year ago. Wednesday, September 22, 2010 4:16 PM


James says...
I just bought a car 2 weeks ago. Looked at what I could afford and the fact that I surf, and such, so needed something for outdoor/sporting activities. I spent $21K, this calculator told me to spend $4K, no idea why. I guess I don't spend enough time in my car or something.
- Over 1 year ago. Wednesday, September 22, 2010 4:15 PM


Anne says...
Um, am I missing something? It doesn't even ask how much money I EARN...
- Over 1 year ago. Wednesday, September 22, 2010 4:01 PM


Christopher says...
So my calculation came back with $9k for a new car that I plan on keeping 10 years. Say what? So I played around with it a bit and it seems that I don't spend enough time in the car according to the formula. See, I only drive for 1 hour a day (30 minutes to work, 30 minutes home) and I don't drive my car on the weekend (we use my wife's car) nor do I drive my car for vacations. A $9k car won't last 10 years without serious investment for repairs. That's not long term frugal.
- Over 1 year ago. Wednesday, September 22, 2010 3:55 PM


carpotential says...
I input the information and it said I should buy a brand new car for $12,900. Come on, I input the value of my house as $400,000. This is bogus.
- Over 1 year ago. Wednesday, September 22, 2010 3:32 PM


Frans says...
$24k. Less than half of my car value, but if I had to buy another that is about right!
- Over 1 year ago. Wednesday, September 22, 2010 3:16 PM


Befrugal says...

Brandon -

To clear up some confusion, when we ask for the age of the car, we mean the age of the car you would purchase, not the age of the car you currently own.

Based on the information you provided, we would guess the following reasons why our calculator suggested an expensive car: you must spend a significant amount of time in the car on weekends or on driving vacations, and because if you are buying a 12 year old car, you would experience almost no depreciation - so you are OK to spend a lot on the car.

Aaron -

The reason the calculator suggested a cheap car for you is: a) you spend very little time in the car, and b) you are a frugal person based on your monthly rent, and c) your interest rate at 11% is relatively high.

And everyone -

Thank you everyone for your continued feedback. We have rewritten the text (at the top of this page) to better explain how the calculator works.


- Over 1 year ago. Wednesday, September 22, 2010 3:09 PM


patrick says...
Considering I am looking at a car with about a 45k sticker, and the results came back at 47-50k (depending on making changes after the fact). I feel justified to my wife now.
- Over 1 year ago. Wednesday, September 22, 2010 2:59 PM


pol says...
How does my furniture value figure into the car I should have? Anyone thought of asking how much I actually make? Really, really stupid calculator.
- Over 1 year ago. Wednesday, September 22, 2010 2:54 PM


pAUL says...
I thought this was pretty accurate. It told me the suggested purchase of my next new car should be $25,000. That's right on the money of how I would value a car and how I value a home as well.
- Over 1 year ago. Wednesday, September 22, 2010 2:48 PM


Dan says...
I have not had a car payment since 1988. I currently drive a 1994 Saturn sedan with 72,000 miles, for which I paid $1600. I paid $4000 for my wife's 1999 Dodge Stratus 5 years ago. It currently has 99,000 miles on it. The article in the URL I've listed is a GREAT one to follow in looking for affordable cars! http://articles.moneycentral.msn.com/SavingandDebt/SaveonaCar/the-joys-of-a-5000-dollar-used-car.aspx
- Over 1 year ago. Wednesday, September 22, 2010 2:40 PM


SG says...
A $10,000 new car? Haha! Show me where I can buy a new car for $10,000. My current car (12+ years old and still running fine) cost more than that when I bought it. I don't get how this calculator works; it doesn't take into account income, which obviously is the #1 factor in what you can and cannot afford.
- Over 1 year ago. Wednesday, September 22, 2010 2:15 PM


StalePhish says...
$1,400? Well, off by a factor of 10 for my daily driver.. Got it $14,000 a few years ago
- Over 1 year ago. Wednesday, September 22, 2010 2:06 PM


Stephanie says...
12,000! Which is how much my car was when I got it!
- Over 1 year ago. Wednesday, September 22, 2010 2:01 PM


Lindsay says...
Suggested Car Value: $10,529.86 This actually sounds right to me. I paid $6k for my extremely reliable 1997 Ford Escort and that was 9 years ago. So if I wanted a similar deal today - a reliable model that's about 4 years old - 10k sounds about right. Good job at estimating my level of frugality and car utility needs. :) My only concern is that a non-frugal person who fills this out might need to be told that they shouldn't spend much on a car, but the algorithm might tell them to spend a lot. I'll test it out.
- Over 1 year ago. Wednesday, September 22, 2010 1:08 PM


Aaron says...
Suggested value: $453.63 I'm not quite sure what to make of that. Based upon my own experience, I generally enjoy vehicles that, you know, run. Work hours: 8 --- 0 Car hours: 0.5 --- 1 Home hours: 15.5 --- 22 Other time: 0 --- 1 Driving vacations: 3 Hours per: 12 Monthly rent: 650 (awesomely cheap!) Furniture value: 3000 Car age: 5 How long: 6 Interest rate: 11 My current vehicle cost about $16k, and making the $350/month payments is well within our means. If I had to do it again, I'd look for something cheaper, perhaps $10-12k. We paid $4k cash for our second vehicle. I'm not saying I didn't overspend for our primary vehicle, but $450 seems a bit low.
- Over 1 year ago. Wednesday, September 22, 2010 12:40 PM


brandon says...
$60,000! Wow. How would you think that I should buy a car that expensive? There must be something wrong with your calculations. Work hours 8, car 2, home 12, other 2: house value: 230,000; furniture 10,000; prop tax 2200. current car 12+ years old and I plan to keep it 4 years. I own the car with no payment. To suggest I should buy a $60,000 car is irresponsible.
- Over 1 year ago. Wednesday, September 22, 2010 8:55 AM


Befrugal says...

JB and siredge -

Thank you for your feedback - it helps us tremendously to know what our users are thinking.

To clarify... the reason we *always* take the interest rate into account, is because of opportunity cost; i.e.; if you spent $100K to pay off your home loan, then you have lost the interest earnings on that $100K. The caveat is that we are using the same interest rate (defaults to 6.5%) for both the opportunity cost and the mortgage rate.

You will notice that we do not care about downpayment or loan amount, just the house value - and this is for the very same reason of opportunity cost, which, in our simplification, is the same as the mortgage rate.

siredge - yes, you can put in a small number like 0.00001 to force the interest rate to approximate zero.

This calculator could have been a lot more detailed, but we had to back off, because even the people at Befrugal had a hard time understanding all the numbers.

Thanks again for your feedback.


- Over 1 year ago. Tuesday, September 21, 2010 6:18 PM


siredge says...
JB- Try using 0.00001 instead.
- Over 1 year ago. Tuesday, September 21, 2010 4:33 PM


JB says...
This is a good idea. However, I'm having a bit of an issue with the percentage rates for the mortgage and car loan. As I have neither, and both are paid off, I put zero for the percentage. When it calculated, it automatically incorporated the default percentages, as if I had loans! I do not. Please correct this. Do not assume that every visitor is in debt. Some of us truly frugal beings have paid off our loans a long time ago.
- Over 1 year ago. Tuesday, September 21, 2010 4:21 PM


Befrugal Blog says...
For more on this topic, please also read our blog post on how much to spend on a car... http://www.befrugal.com/blog/frugal-articles/how-much-to-spend-on-a-car/
- Over 1 year ago. Thursday, August 26, 2010 8:12 PM