The article discusses the significant burden of auto loan debt in America, with total debts projected to reach $1.66 trillion by the end of 2024. This financial strain is heightened by average monthly payments of $742. The article emphasizes the importance of budgeting when buying cars, advocating for the '20% rule' where car payments should not exceed 20% of monthly take-home income. It encourages potential buyers to consider their financial limits and offers practical guidelines to avoid excessive debt while purchasing a vehicle.
The average new car payment hovers around $742 a month, with car loans totaling $1.66 trillion, making them the second-largest debt behind mortgages.
Stick to the 20% rule: your car payment should not exceed 20% of your monthly take-home pay, accounting for all related expenses.
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