Fitting a car into your household budget is no easy task, and financial experts do not agree on how to determine its affordability. One school of thought holds that all your automotive expenses — gas, insurance, car payments — should not exceed 20 percent of your pretax monthly income. Other experts say that a vehicle that costs roughly half of your annual take-home pay will be affordable. Then there are some frugal personal-finance gurus who say you should spend no more than 10 to 15 percent of your annual income on a vehicle purchase. Pretax, post-tax, annual income: Where to begin? What is the right amount? Grab a calculator and let's find out.

Take a few minutes to calculate your budget by seeing how much you have left over after you've paid your major bills and expenses.

Take a few minutes to calculate your budget by seeing how much you have left over after you've paid your major bills and expenses.

The 15 Percent Strategy

There's no perfect formula for how much you can afford, but our short answer is that your car payment should be no more than 15 percent of your monthly take-home pay. If you're leasing, it should be no more than 10 percent.

The reason for finding a vehicle that falls below 15 percent is that the payment isn't the totality of what you will be spending. You'll need to factor in the costs of fuel and insurance, and many people overlook that. We put those costs at another 7 percent of your take-home pay. So, all in, you're looking at a total budget that is no more than 22 percent of your monthly take-home pay.

While the 15 percent rule may not work for everyone, it's a good starting point for finding a target price that won't leave you scrambling to pay your bills every month.

Calculate Your Automotive Budget

Take a few minutes to run down what you spend every month. From your monthly take-home pay, deduct rent or mortgage, bills, groceries, child expenses, savings and spending on entertainment. You will then discover how much car you can afford.

Not sure what kind of vehicles fall under this monthly payment? Take a look at the Edmunds "What can I afford?" calculator, which lists vehicles that fall into the price range you've predetermined. Keep in mind that the prices on the calculator results page will change based on the trim level, options, sales tax, registration fees, etc.

Does it seem like you might not be able to afford the purchase? We know that feeling. New vehicles have gotten more expensive over the years and our salaries haven't kept up. In any case, this amount now represents your automotive budget, which, as we've noted, is more than just the monthly payment. On to estimating fuel costs and insurance fees.

Two Key Auto Expenses

Before you set out to buy or lease, find out what your fuel expenses will be and what it will cost to insure the vehicle. Both costs vary considerably, based on your location, your driving history and the vehicle you've chosen. Even though it takes a little work to come up with these estimates, you shouldn't overlook them. Knowing these costs can help you choose among multiple vehicles. Some may cost more to fuel up; others might have a higher cost to insure.

The EPA's website has a detailed listing of fuel economy figures as well as annual fuel cost estimates for both new and used vehicles.

For insurance quotes, contact your agent or insurance company about the vehicle you're interested in. You should be able to get an accurate estimate. Or go to the auto insurance website of your choice, and there should be an option to get an online quote. Do insurance and fuel costs add up to 7 percent or less of your monthly paycheck? Then you're OK.

An Average New-Car Buyer's Scenario

To make this budgeting less abstract, let's plug in some real-world numbers. The median U.S. household income was $59,039 in 2016, the most current information available from the U.S. Census Bureau. After paying an estimated 25 percent in income taxes, this would translate to a monthly income of about $3,690 for a buyer whom we'll call Chris. If we follow our 15 percent rule, Chris could handle a monthly car payment of up to $554.

In 2017, the average amount financed for a new vehicle was $30,796, according to Edmunds data. Let's say Chris bought a new Ford Explorer for that amount. We'll assume Chris has solid credit and all aspects of the deal mirror the industry average. Chris made an 11 percent down payment, which comes out to $3,789. The monthly payment will be $515 because Chris has opted for the average loan term, which will take nearly six years to pay off.

So far, it seems as though we're under budget. But Chris hasn't yet factored in fuel and insurance costs.

Those pencil out to $150 a month for fuel and about $110 a month for auto insurance. This means Chris' total monthly automotive expenses are actually $775, or 21 percent of monthly take-home pay.

Some people might be OK with spending nearly a quarter of their take-home pay on car ownership. But what if you make less than Chris does? What if you have poor credit? Or what if you have other debt you're trying to pay down? It would make new-car buying a real challenge.

The Used-Car Option

What would the payment look like if Chris were to buy used? For starters, the sticker price would be less expensive and there would be a lower threshold of credit needed for financing the auto loan. Assuming again that Chris goes with the averages, the amount financed for the used vehicle Chris chose would be $21,215. The down payment would be just over 10 percent ($2,480). The monthly payment would be $384 and it would take about 67 months to pay it off. The used-car loan would have an interest rate roughly 3 percentage points higher than that of a new-car loan. But that's typical for used-car lending.

Fuel costs would be roughly the same. Insurance would be slightly less because the car is used. This insurance savings, though, would likely be offset by the added maintenance that comes with an older vehicle. Let's call it a wash and assume the same estimate as for a new car: 7 percent of take-home pay for insurance and fuel.

By buying a used vehicle, Chris would be spending $644 a month, or about 17.5 percent of monthly take-home pay. On its face, this would seem to be the most cost-effective purchase since Chris is taking out a smaller loan.

But it would take five and a half years to pay off the loan amount, at which point the car would be 8 or 9 years old. How much longer will Chris want to drive it? The whole point of financing is to eventually be free of a car payment, and if Chris buys another SUV as soon as the old one is paid off, Chris might as well be leasing, so let's look at that.

The Lease Option

A three-year lease in 2017 had a monthly payment of $447 and an average down payment of $2,486. Keep in mind that these averages are high because many leased cars are luxury models (think BMW, Mercedes-Benz and the like). Since Chris is looking for a non-luxury SUV, he can easily find one for the same money down and $100 less per month than the luxury-vehicle average. One major difference, however, is that Chris would have to limit driving to 10,000 miles per year, which is a common mileage limit for advertised lease specials. Adding more miles would cost an extra $25 per month, by our estimates.

Chris' lease payment would be an easier-to-afford $345 per month — less than 10 percent of his take-home pay. When we factor in 7 percent of take-home pay for fuel and insurance costs, Chris would be spending about $605 per month on this car, which would be about 16.4 percent of his monthly income. That's a good fit for our 17 percent budget for a leased car.

In this scenario, Chris would be paying much less per month to lease than to buy. Chris would also have more in the bank because of the smaller down payment. On the other hand, Chris would be limited on miles driven and would have to start the process over in three years when the lease is up.

Examine Your Buying Patterns

In addition to the formula for car affordability, recognizing your own car-buying habits, good and bad, can offer clues to the best strategy for you.

For example, are you someone who buys a car, pays it off, and then keeps it for a few years? Buying a new car would work for you: You have a track record of shopping within your means, finishing off the loan, and going payment-free for a while. That's smart.

Do you get bored with a car after a few years? Then leasing is your best bet. What good is it to take out a six-year loan if you're going to trade in the vehicle during the fourth or fifth year? You'll likely owe more than the car is worth and will have to roll that balance into the next loan. You'd be better off leasing and paying less per month. Leasing also lets you get a nicer car for less money.

Finally, are you trying to make the most financially sound decision possible? Then buy a lightly used car, pay it off, and keep it for many years. The first owner takes the depreciation hit, and you'll have a car that's new enough to avoid major repairs for a while.

What's the Best Option?

There's a case to be made for each of these approaches to affordability. It is essential to recognize your car-buying history, and if you do commit to a long-term loan, make sure you drive the vehicle for at least a few years after it is paid off.

In the end, the best car-buying scenario will be one that takes into account your bills and other financial responsibilities. If it's a stretch for you to buy now, consider saving up a bit more and revisit shopping at a better time. The most important things are to know your budget and remember that there's more to owning a car than just that monthly payment.