What Car Price Can I Afford on My Annual Budget

If you want to spend $5,000 a year, drive 12,000 miles, pay $4.06/gal (AAA national average, retrieved 2026-08-06) and carry medium insurance, you can afford a car priced around $24,000. Depreciation is the biggest slice at about $3,100 a year, followed by insurance near $1,300, fuel near $1,950 and maintenance near $1,100. The purchase price scales directly with your budget: raise the annual cap and you can step up to a newer or nicer vehicle. This view is more honest than the monthly payment alone because it captures the costs that quietly eat your budget after you drive off the lot.