LB Financial Coaching

The Car Payment Trap

The average monthly car payment in America is now over $700.

That’s more than $8,400 per year leaving your pocket before gas, insurance, maintenance, or repairs. If you have a $700 a month car payment and you’re only investing $400 a month .. we have a problem.

One guideline I like is the 20/3/8 Rule:

✅ Put down at least 20%
✅ Finance for no more than 3 years
✅ Keep the payment at 8% or less of your gross monthly income

Will everyone be able to follow it perfectly? No.

But it creates a guardrail that helps prevent buying too much car and sacrificing other financial goals.