The “20% to 25%” guideline
The truth is, car prices are rising, so it may be more difficult to find a safe and reliable car at 10% of your take-home pay. You should never spend more than you can afford, but if you stay frugal in other ways, it may be possible to spend 20% to 25% of your take-home pay. And, it may be worth doing so if you can buy a car that’s newer and safer. For example, it’s worth spending the extra money on some of these car safety features, many of which are now required in the U.S. and come standard in newer models:
Look for vehicles with adaptive (dual-stage front airbags), as well as side airbags.
This feature can help you retain steering control while you brake, especially if it happens quickly.
If you’re in wet or icy conditions, this feature can help prevent your wheels from spinning.
Electronic stability control:
This feature can help you avoid sliding during a turn, especially if you go off your desired path.
LATCH (lower anchors and tethers for children):
This system makes it possible to safely install child car seats.
There are many different types of avoidance systems, from pedestrian detection or blind-spot warning to lane-departure warnings. If you buy a new car, chances are, it might have some of these safety features—and they might be worth the extra cost.