The modern world is full of extremely convenient technologies. We can access endless amounts of information from our smart phones, can have food delivered to our door, and can even invest and manage our money through the internet.

But long before the internet, we faced more basic inconveniences. In the age when we weren’t digitally connected, physical interaction was our only option.

In these times, people had to link up through great distances. Doing so on foot was probably a nightmare, limiting most people to incredibly small geographic areas.

Luckily, we created automobiles. Cars have completely changed our world, allowing us to become far more metropolitan and enabling access to many of the modern conveniences we now enjoy.

It’s no wonder then that owning a car is basically a necessity for many people in modern societies.

But that fact doesn’t make owning a car cheap.

Why Are Cars so Expensive?

Cars are expensive for a few reasons.

For starters, they’re expensive to manufacture. If you’ve ever had an issue with your engine or any other part of your vehicle, you know that cars are very complex.

This complexity makes producing cars fairly expensive compared to simpler consumer goods.

Additionally, the market demand for cars is very high. Cars are far more than pragmatically useful goods. They’ve attained a permanent place in our society as status symbols and forms of self-expression.

Because cars have so much symbolic value, car manufacturers are able to charge more for them.

And finally, cars are a foundational part of modern life in many places. Cars are absolutely vital for suburban life, meaning that buyers really don’t have the option not to buy.

This allows car manufacturers to further raise their prices, resulting in the very expensive price tag you see even on older models.

How Much Should You Spend On a Car?

If you’re in the market for a new car, it can be difficult to parse how much is appropriate to spend.

A good rule of thumb is that your car should cost no more than ten percent of your income on a car. That means if you make $60,000 a year, you should try to stick to a car that costs about $6,000.

That number may seem very low, especially with industry leaders like Tesla making models that exceed ten times that figure.

But it’s important to remember that just because other people are buying expensive cars doesn’t mean they’re making good financial decisions. Your neighbor’s flashy ride may be seriously crippling them financially.

You shouldn’t pay attention to other people’s spending. Instead, focus on making smart financial decisions for yourself. Doing so will help you build wealth, meaning one day you can afford a nicer car without having to stress over the price tag.


Owning a car has become standard for many people in many parts of the world.

Despite this fact, cars remain quite expensive. If you’re shopping for a new car, you may not know how much is appropriate to spend.

A good rule of thumb is to try to limit your car to ten percent of your yearly income. This ensures your vehicle won’t negatively impact you financially.