Car payments: How much should you spend? Here's how to budget while shopping for wheels.

One rule of thumb on buying a car says you shouldn't spend more than 20% of your monthly take-home pay.

Experts warn that figure includes more than car payments: You must also factor in gas, insurance, and other costs.

My warning? That 20% rule is bull.

I followed it, and my car purchase still broke me.

Here's what I learned the hard way, and how you can do better, by choosing a car wisely — and budgeting the right amount of cash.

Average monthly car payment: Remember, 20% is a ceiling, not a floor.  

My biggest mistake was letting the 20% rule make me complacent.

In 2008, I looked at my generous monthly salary — more than $6,600 — and did the math. One-fifth of that is a little more than $1,300.

Payments on the shiny new green Honda CRV I fell in love with would set me back only $400 monthly. I figured that left me plenty of wiggle room for fuel and insurance, and took the leap into car ownership by taking out a loan.

What should I have done?

Instead of psychologically anchoring myself to that $1,000+ figure, and working backwards, I wish I had started from $0 and looked at how to find a decent auto for as little as possible.

New vs. used car: Seriously, consider buying the latter. 

It's crucial to remember you'll continue to foot the bill on monthly payments — even if your financial situation changes suddenly.

I paid the price three months into my purchase — when my $80,000-a-year job was swallowed in the recession and I was left holding the bag on a fast-depreciating asset.

It's a common misconception new cars are inherently better than used ones. Sure, many have more enviable fuel efficiency and gadgets — and that new car smell.

But what salespeople don't tell you is that the rate of depreciation for new vehicles surpasses rhyme and reason: A new car loses about 10% of its value as soon you drive off the lot!

After 5 years? Depreciation makes cars worth only about 40% of what you paid, according to Edmunds. And that doesn't even include how much more you pay in taxes and for insurance on a new versus used auto.

All of these factors can mean serious costs, especially if you don't actually have the cash for the car — and are financing it by taking out a loan.

People overwhelmingly opt for used cars. Although new car sales had a record breaking year in 2015, with 17 million new cars sold, it's left in the dust by the number of used cars sold each year: 40 million.

Don't ballpark — and use a car payment calculator. 

Be precise. Use a loan calculator like the one at Cars.com to figure out your maximum loan amount based on desired monthly payments, sales tax in your state, and available interest rates.

Experts suggest shopping for your loan separately from the car — and doing your homework ahead of time, comparison shopping on terms and interest rates, and bargaining hard, whether with a dealer, bank, or credit union.

Don't be sweet talked into lower monthly payments that will end up costing you more overall.

And remember there are other expenses to consider.

Even for a small sedan, insurance, licensing, registration and tax will set you back more than $1,600 annually on average, according to AAA. That doesn't even include gas or maintenance costs.

Fluctuating fuel prices alone can topple your budget: A gas-guzzling SUV might become an unwieldy burden if energy prices spike.

The Department of Energy's data trove at FuelEconomy.gov will keep help you gauge your gas costs before you commit to a car.

Think cost-to-own, not just cost-to-buy.

Speaking of committing — you'll want to examine your purchase from a couple different angles before assuming it's a good deal, lest you get stuck with a lemon.

Do due diligence on your used car with sites like Carfax, checking out vehicle-history reports. The Federal Trade Commission has an overview of all the information you have a right to know about your used car. 

Shoot for a low-mileage used car that is 2 or 3 years old. Generally, cars are driven 12,000 miles a year, so walk away from something like a 3-year-old car with 100,000 miles on it. Too risky. 

A car with a high resale value will also get you more if you decide to you sell it, so check Kelly Blue Book's lists of cars by resale value in various categories.

And remember that maintenance costs can vary widely. Consumer Report's list of most- and least-reliable cars in different classes is helpful.

There are cars that are more affordable to insure, too: Nerdwallet's list of which cars are the cheapest to insure among best-selling models is a good place to start.

Fun fact: The color doesn't matter. It's a total myth that red cars are more expensive to insure.

Make as big of a down payment as you can. 

If you've looked at the alternatives and decide to finance your car, you can lower your monthly costs by putting more money down.

Conventional wisdom holds that buyers make a 20% down payment. But people aren't actually doing that. The average downpayment for both used and new cars, according to Edmunds, is 10.4% of the purchase price. 

Making a smaller downpayment is fine. It is often as much as buyers can save. What it means, however, is that you have to pay more attention to depreciation and be careful you don't get upside-down on your purchase, or owe more on it than it is worth — that will especially suck if it is totaled or stolen.

There is a kind of insurance, GAP insurance, or guaranteed auto protection, which will cover the difference between the value of the car and the amount you owe, should disaster strike.

Lastly, be aware of the fees associated with a car purchase.

Edmund's lists a good chart of fees. There can be vehicle identification number glass etching, documentation fee, the dealer prep-fee, advertising fee.

Some you can avoid, some you can't.