You may be looking around for what to buy for your first car or your kids first car. Since it is the first car the cost of the vehicle should stay low, especially if it is for someone under the age of 25. By doing so the cost of insurance, car payments, gas, and maintenance are reduced over time.
When looking for a car you should be sure you are able to at least make a 20% down payment or even better pay for the car in full with cash so you do not have to pay extra money in interest. If you are not able to do so a good safe method is to insure that the car you are purchasing will not cost you more than 15% of your gross income per year. If you buy a new car you can normally get a 0% interest rate if you have good credit.
Example:
Car MSRP: $15,000.00
Down Payment: -$3,000.00
Fees $500.00
Title + Reg.: $140.00
Sub Total: $12,640.00
Taxes 6%
Total: $13,398.40
4 Year Payment Plan (48 Months)
~$279.14/month
It is recommended to increase your monthly payment above the minimum to help insure you can pay the car off before it is actually due to help decrease your overall payment for the car, especially if you have a higher APR versus 0.0%.
If you purchase something with great gas milage Toyota, Chevy, Ford, Dodge, Kia, >30MPG, safe and reliable, then you may find yourself only have to fill up every few weeks instead of every Friday. This gets even better if you have a short commute < 15 minutes. With a small payment around $280/month + insurance + gas + maintenance you would save a large amount.
This may also give you the ability to save up faster than expected and enable you to pay the car off in a shorter period of time. Once you do have the car paid off you can then take the amount you used to pay every month and invest it.