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Financial experts recommend spending no more 12% of your after-tax monthly income for car payments. To calculate how much car you can afford, multiply your monthly net pay (take-home pay after taxes are deducted) times 12% (.12). Your car payment should not exceed this general guideline. New cars depreciate in value significantly during the first two years of ownership (30 to 40%). If money is an issue, let someone else pay for the depreciation on the first year or two of your car - buy used. Certified used is usually the way to go. In some instances you get a better warranty than even on a new car.

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Q: How much money may you spend on a car per month in the US?
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