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February 15, 2022

How Much Should I Be Spending on Monthly Auto Expenses?

How much do you spend on car expenses per month? This article can help you with that. See how much is enough and how to save money.

Graphic of a person distressed at his auto expenses
Written by

Jennifer Moore

NerdWallet and other financial experts say vehicle owners should spend no more than 15% - 20% of their take-home pay on auto expenses per month.

Determine your budget

Identifying your monthly auto expenses is key to understanding how much you can afford or potentially save. Some common auto expenses include:

Calendar of monthly auto expense dues

Car payment

Your monthly car payment will, most likely, be the main expense in your auto budget each month. It is suggested that your car payment alone should be 10% of your monthly take-home pay. As we mentioned earlier, auto-related expenses as a whole should be 15%- 20% of your monthly take-home pay. So the majority of your auto budget should be compromised by your monthly car payment. Learn ways to reduce your monthly car payment.


The next largest expense is, most likely, car insurance. The average cost of auto insurance in the United States is $136 per month. However, rates will vary greatly depending on your driving history, desired coverage levels, and personal details.


In 2017 the bureau of labor statistics found that we spend $164 per month on gas, other fuels, and motor oil. However, gas prices have dramatically increased since this study was conducted in 2017. If you are unsure of the best number to use to calculate gas costs, we recommend using FuelEconomy.gov

Maintenance & repairs

The amount of auto repairs you will need significantly depends on the car's age. However, even new cars will require some maintenance. In 2017, AAA found that, on average, new vehicles cost $1,186 each year to maintain and repair. When broken out monthly, it is roughly $100 you may need to set aside for standard maintenance.

Registration, permits, parking, or other car expenses per month

These payments tend to vary based on how you use your vehicle and what state you live in. Make sure to include any miscellaneous expenses in your budgeting.

Whether you are above or below the suggested 15% -20% threshold, how you manage your finances is a very personal decision. The 15 - 20% is less of a rule and more of a suggested guideline; it should be used to identify ways to improve or lower your monthly payment. If you'd like to see how your numbers shake out, check out our monthly auto expenses calculator.

Regardless of what your numbers are, if you think you could pay less for your car payment, RateWorks offers free online quotes. Start your journey with us today!