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Great Cars You Can Own on a $50K Salary

There are plenty of great cars you can own on a $50,000 annual salary. But wouldn’t it be nice if you could afford the same car on a $40,000 salary, or even a $30,000 salary? If you really want to make a car fit into your price range, there’s no better way than to have a healthy credit score. Since a higher credit score translates into a lower risk for finance companies, they’re willing to lower your interest rate to compete for your business. A lower interest rate translates into a lower monthly payment, which in turn means a lower total cost.

For this study, GOBankingRates surveyed the manufacturer’s suggested retail price of a variety of 2020 vehicles and used CarMax’s car payment calculator to determine estimated payments for those with very good, good and fair credit. Payments were computed using a 60-month term after a 20% down payment. Vehicles are ranked from lowest MSRP to highest. Here’s the resulting list of cars that appeared as being affordable for those earning $50,000 per year, and how much you’ll pay if you have great credit.

Last updated: Oct. 5, 2020

2020 Toyota Yaris

  • Starting MSRP: $16,645

  • 20% down: $3,329

  • Monthly payment: $251

Even if you only earn $40K you can afford the 2020 Toyota Yaris — unless you have fair credit. In that case, your monthly payment would be $296 per month, and you’d need an income of $50K to afford it. With good credit, you can still afford the $264 monthly payment by earning $40K.

2019 model shown.

2020 Kia Rio

  • Starting MSRP: $16,815

  • 20% down: $3,363

  • Monthly payment: $255

If you only have fair credit you’ll need a yearly income of $50K to afford the $299 monthly payments on the 2020 Kia Rio. If you earn $40K and have good or excellent credit, you can cover the $266 or $255 monthly payments, respectively.

2020 Honda Fit

  • Starting MSRP: $17,145

  • 20% down: $3,429

  • Monthly payment: $259

The 2020 Honda Fit is well in reach for those with very good credit. If you only have fair credit, however, you’ll need to earn $50K to afford the $305 monthly payment. With good credit, you can expect a payment of $272 — still reasonable for those earning $40K a year.

2019 model shown.

2020 Chevrolet Sonic

  • Starting MSRP: $17,595

  • 20% down: $3519

  • Monthly payment: $266

The Chevy Sonic is an affordable car for those earning $50K and even for most $40K earners, unless you have fair credit. In that case, your payments will rise to $313 a month, making the car only affordable if you earn $50K. At the $279 monthly payment required for those with good credit, the car becomes affordable for individuals making $40K.

2019 model shown.

2020 Chevrolet Spark

  • Starting MSRP: $18,495

  • 20% down: $3,699

  • Monthly payment: $279

The 2020 Chevrolet Spark is an extremely affordable small car regardless of your credit score. If you have good or fair credit, you can afford the $293, and $292 monthly payments, respectively, on a $40K salary. If you have very good credit or higher, you can afford the car on just $30K a year, paying only $279.

2019 model shown.

2020 Kia Soul

  • Starting MSRP: $18,610

  • 20% down: $3,722

  • Monthly payment: $281

The 2020 Kia Soul is the most affordable SUV, but you’ll need very good credit to afford it if you earn $40K a year. If your credit is good or fair, the monthly payments rise to $295 and $331, respectively, making the vehicle affordable only if you earn at least $50K.

2019 model shown.

2020 Kia Forte

  • Starting MSRP: $18,855

  • 20% down: $3,771

  • Monthly payment: $285

The 2020 Kia Forte is the third vehicle from the automaker that falls onto the affordable list for those earning $50K a year. Those earning $40K can afford the car if they have very good credit, but it will take $50K to afford the $299 and $336 payments required of those with good and fair credit.

2019 model shown.

2020 Hyundai Elantra

  • Starting MSRP: $20,295

  • 20% down: $4059

  • Monthly payment: $306

Even with very good credit, you’ll need to earn $50K to afford the 2020 Hyundai Elantra. Payments of $361 or $321 per month for those with fair or good credit, respectively, are too much for a $40K salary.

2019 model shown.

2020 Honda Civic

  • Starting MSRP: $21,000

  • 20% down: $4,200

  • Monthly payment: $317

The Honda Civic is perennially on the list of most popular cars in America, and the affordability of the 2020 version is likely to keep it there. Even those with only fair credit are looking at a payment of $374 per month, which is affordable if you earn $50K a year.

2019 model shown.

2020 Chevrolet Colorado

  • Starting MSRP: $21,300

  • 20% down: $4,260

  • Monthly payment: $322

With a $379 monthly payment for those with fair credit, the 2020 Chevy Colorado is pricey but doable even if you earn $50K a year. A good credit score knocks that payment down to $337 per month, putting it back in the affordable camp.

2019 model shown.

2020 Honda HR-V

  • Starting MSRP: $22,040

  • 20% down: $4,408

  • Monthly payment: $333

The 2020 Honda HR-V is one of the SUVs that is affordable for those earning $50K, thanks to a monthly payment that’s $349 for those with good credit. However, even $50K earners will find the SUV hard to afford if they have fair credit, as that monthly payment will jump up to $392.

2019 model shown.

2020 Mazda3

  • Starting MSRP: $22,445

  • 20% down: $4,489

  • Monthly payment: $339

The 2020 Mazda3 is a sporty little vehicle that will cost those with good credit $339 per month. This keeps the car affordable for those earning $50K. Creditworthiness is key when buying the Mazda3, however, as having only fair credit will translate into a higher monthly payment of $399. This makes the car a stretch even for those earning $50K annually.

2019 model shown.

2020 Fiat 500L

  • Starting MSRP: $22,500

  • 20% down: $4,500

  • Monthly payment: $340

For people with good credit, payments on the 2020 Fiat 500 would be $357 per month. With fair credit, the monthly payment jumps to $400.

2019 model shown.

2020 Chevrolet Malibu

  • Starting MSRP: $23,065

  • 20% down: $4,613

  • Monthly payment: $348

Even if you earn $50K a year, you’re really reaching if you want to buy the 2020 Chevy Malibu. The car is only affordable if you’re earning at least that amount and if you have very good credit. Even with good credit, you’re looking at a payment of $365 — out of reach for those earning a $50K salary.

2019 model shown.

2020 Jeep Compass

  • Starting MSRP: $23,775

  • 20% down: $4,755

  • Monthly payment: $359

The 2020 Jeep Compass is another car that requires very good credit and a $50K-plus salary to afford. The extra $18 per month you’d have to pay if you have good credit is just enough to put this car out of the reach for a $50K earner. Those with fair credit would face a $423 monthly payment.

2019 model shown.

2020 Jeep Renegade

  • Starting MSRP: $23,870

  • 20% down: $4,774

  • Monthly payment: $360

Although the 2020 Jeep Renegade makes the affordable list for those earning $50K, that’s only true if you have very good credit. Good or fair credit applicants face monthly payments of $378 or $425, respectively, making it too expensive for a $50K earner to afford.

2020 Honda Insight

  • Starting MSRP: $23,885

  • 20% down: $4,777

  • Monthly payment: $361

As a hybrid, the Honda Insight might save you at the pump, but you’ll have to plunk down a pretty hefty sum to buy it. With fair credit, you’d have to pay $425 per month after your 20% down payment to afford the 2020 Insight, putting it out of reach for a $50K salary. Even good credit only drops the monthly payment to $378, which is still too pricey at that income level.

2019 model shown.

2020 Volkswagen Golf

  • Starting MSRP: $24,115

  • 20% down: $4,823

  • Monthly payment: $364

If you fancy buying a 2020 Volkswagen Golf, you’ll need good credit and a $50K salary to afford it. With fair credit, you’re looking at a monthly payment of $429 — well out of the reach for a $50K earner. Even good credit only drops that payment to $382, still pricey on a salary of $50K.

2019 model shown.

2020 Hyundai Ioniq Hybrid

  • Starting MSRP: $24,195

  • 20% down: $4,839

  • Monthly payment: $365

With a payment of $365 per month, the Hyundai Ioniq Hybrid is an affordable option for those with very good credit earning $50K a year. The car might stretch your budget or be out of reach if have fair or good credit, however, as you’d be asked to fork over $431 or $383 per month, respectively.

2019 model shown.

2020 Hyundai Sonata

  • Starting MSRP: $24,595

  • 20% down: $4,919

  • Monthly payment: $371

The 2020 Hyundai Sonata is one of the midsize cars you can afford if you pull down a $50K salary. With good credit, the $390 monthly payments are affordable for those in that salary range. If you have fair credit, however, you might have to wait until you pull up your score or make more money, as the $438 payment might prove too costly.

2019 model shown.

2020 Nissan Frontier

  • Starting MSRP: $27,885

  • 20% down: $5,577

  • Monthly payment: $421

The Nissan Frontier is the first truck on the affordable list for those earning $50K, as even those with fair credit are looking at a not so small payment of $496. Good credit can knock that payment down to $442 per month.

2019 model shown.

It's All About Your Credit Score

As you can see from the examples above, your credit score plays a big part in whether you can afford a particular car. The higher you can get your credit score, the lower your monthly payment is likely to be. With the right credit score, you can afford more expensive cars even while earning a lower income. In many cases, those with fair credit have to pay 20% or more than those with very good credit for the same car. That extra money goes right into the pocket of your financing company, while you get nothing else to show for it. There’s no better real-world example of why you want to keep your credit score high.

More From GOBankingRates

Jordan Rosenfeld contributed to the reporting for this article.

Methodology: GOBankingRates determined the cars in this study by first compiling a list of 2019 vehicles sourced from U.S. News and World Report’s 2019 Best Cars ranking. The range of monthly car payments was determined based on the Bureau of Labor Statistics’ 2017 Consumer Expenditure Survey, which states that Americans have a mean income before taxes of $73,573, and spend $4,054 on vehicle purchases (net outlay) plus $220 on vehicle finance charges. Thus, Americans spend approximately 6% of their annual income on vehicle purchases and finance charges. This served as the low-end of the price range and 10% on the high-end (assuming 50% of income spent on necessities, with housing costing a maximum of 30%, vehicles 10% and 10% for other necessities). Individual vehicle websites were sourced for each vehicle’s starting MSRP, and CarMax’s car payment calculator was used to determine monthly payments with fair credit, good credit and very good credit. The annual salaries analyzed were $80,000, $70,000 and $60,000 before taxes; monthly payments were based on a 20% down payment and 60-month finance terms. Car model prices and monthly payments amounts were updated on Oct. 5, 2020.

This article originally appeared on GOBankingRates.com: Great Cars You Can Own on a $50K Salary