% of salary on car

so people say an engagement ring in 3 months salary, what should a car be?

my plan at the moment for my next car falls around 55% of a years salary? is this too much?

mikemac

Too much in my opinion

Rule 1: Don't buy a car you can't buy for cash. If you need a loan you can't afford it.

I'd say 20% max but then I view a car as a piece of metal to get me from A to B. Sorry, not a enthusiast

Profiler

It's not a simple as that.

It is less to do with what percentage of your salary and more to do with it's affordability.

for me to get the cash, i'd have to get rid of other debt first and to be honest, to build up the money for a car, i wouldn't be upgrading for 5+ years..

Tech3

bought my car off 50% of my yearly salary.

I saved up though and didnt take a loan out. Still agree with above though its a lot of money to be wasting but I drive an awful lot and wanted to spend for a decent car. My first car was f**k all though.

Keano

OP it really is what you can afford. I bought a car this year that cost more than I would have liked but I paid cash and intend on keeping the car for a very long time.

well lets change it about a bit,

taking all loans, insurance, tax and running costs.. how much of your monthly salary would you think it should take up?

Darragh29

I think the day that you start looking at the type of car that you want to drive as a function of your salary, you're already fu*ked.

it's more about what is too much to spend.. same as what % of salary would you spend socializing.

challengemaster

If you want it, get it would be my opinion, as long as you can afford it.

Life's too short lived, treat yerself to what ya want

cianclarke

I wouldn't go over 50%, but wouldn't see anything wrong with ~50% either tbh...

SV

I've been looking at a few cars that are 150% of my salary.

But all I spend my money on are cars so..Justified?
maybe not, but I'll get my satisfaction out of it.

OCD

Deleted User wrote: »

well lets change it about a bit,

taking all loans, insurance, tax and running costs.. how much of your monthly salary would you think it should take up?

well, in the midst of the booming economy, most banks wouldn't give you a mortgage where the repayments were more than 30-40% of your take-home salary and those who got 40% are probably struggling right about now........so if you spend 55% of your salary in one go on a car then you would be an idiot in my opinion.

on the other hand, if you are buying it over several years, then of course, you are not spending 55% on it in one go so like the other posters said, it's the affordability that counts but i think anyone that gets a loan to buy a rapidly depreciating asset is foolish. have a read of 'tricks of the rich' by paul overy on the real cost of buying a car on credit and you'll be shocked at the true cost of your average family car.

in answer to your question, less than 15% is plenty.

samhail

I have no problem in getting a loan. over the next 3 years so the car itself works out at less than 15% of my montly/yearly salary.

Rowley Birkin QC

challengemaster wrote: »

If you want it, get it would be my opinion, as long as you can afford it.

Life's too short lived, treat yerself to what ya want

How are things back in 2005?

peasant

What salary?

You sure you're still going to have on in 6 months / a year?

nope.... not too many can be certain of a salary but wouldn't be buyin for a while anyway.

jor el

Deleted User wrote: »

for me to get the cash, i'd have to get rid of other debt first and to be honest, to build up the money for a car, i wouldn't be upgrading for 5+ years..

That's beside the point. Get what you're happy with, and at what ever price you're happy with and can afford. Everything else is a matter of personal opinion.

The only reason I changed my last car, a 10 year old Laguna that I had for 5 years, was that I wrote it off. I went and bought a '99 Megane for €1,500, and that'll do me till it falls apart. I couldn't spend more than a few grand on a car now. It's a tool, use it till it breaks. When you can buy a decent car for €2,000, why spend €20,000 on one?

If I had that DB9, now that wouldn't be a tool, but I don't, so no point worrying about it.

maidhc

I don't think you should get in debt for a car. But if you have spare cash, and not forcing the kids to live on rice cakes, then spend whatever.

Tails142

Driving a 00 BMW 528i.

Car loan is about 450 over three years, the loan also covered first years insurance, tax, and maintenance costs which complicates the 'percentage of your salary' brake down a bit, loan was for 13k, car cost 9k.

But based on this year, a monthly breakdown shows:

Loan:450
Petrol: 160 (Fill up every two weeks, costs about 60-80 quid, cheaper now because of petrol prices)
Tax: 100 (1204 for the year)
Insurance: 100 (1200 for the year also, comprehensive)
Maintenance: 150 (Spent about 2500 in the first year, 1500 this year so if you average it out that's what I have spent per month)

So 960 per month is what the car is costing me which is working out at about 33% of my salary, taking into account that I get a mileage allowance in work which should cover the petrol and some of the maintenance, usually adds up to about 300 quid per month)

So I would say 33% is a lot to be paying for a car (I cant imagine I'd ever spend more than I currently do), you could say its even ridiculous to be payin that much, I dont see how anyone could justify paying 50% of their wages unless they were on 25k a year.

I can get by with 33% but if I was doing it again, I'd get a newer car and get 5 years finance as opposed to 3 years finanance and buy something more expensive. Might help cut down the maintenance bill. Hopefully I'll have the car for a couple of years after the loan is paid off so that will bring down its cost too.

Tony Broke

Get what you like, but dont get a loan.

% wise, I think people should be aiming for 10% - 15% even if they are single with no mortgage, kids etc.

If you earn 400,000e a year you can afford a brand new Merc CLK, if you earn 40,000e a year you can afford a 03 Mondeo.

Capt'n Midnight

If we had a decent public transport system...

If you want to impress the neighbours / chicks / subsidise the government and banks then buy a shiny new car.

Anyway it depends on what you want your car for. If it's to get from A to B then buy something reliable that won't break the bank and join the AA too.

galwaytt

Capt'n Midnight wrote: »

If we had a decent public transport system...

We don't, and we won't, so stop talking fiction.

If you want to impress the neighbours / chicks / subsidise the government and banks then buy a shiny new car.

Nonsense. If you can, and want a new car for yourself, do so.
If you have a new car, and are in the market for a chick, and a car somehow does get you somewhere..........hell, I'm all for it ! Some of the nicest ladies out there are also petrol heads. FWIW, that's who I'm married to, and how. (OK, she's a biker......but same idea...)

If you're neighbour is upset by your purchase.....it's him who's the ass.

If you think by not buying new, that you're somehow depriving govt of any of your motoring spend, you're deluded.
Do you adopt the same attitude to where/how you buy your clothes/food ?

Anyway it depends on what you want your car for. If it's to get from A to B then buy something reliable that won't break the bank and join the AA too.

No problem with that, but if you buy something reliable.......what do you need the AA for ?

Speaking of which, if you're so flush, how come you can afford the AA ?

pburns

Deleted User wrote: »

so people say an engagement ring in 3 months salary, what should a car be?

3 months salary? :eek:...if you work in McDonalds maybe (or have an unreconstructed Celtic Tigress fiancee)...

As someone else said - how are things back in 2005?

The 55% for a car sounds OK but the best advice is not to get a loan. Too many numbskulls were living a lifestyle beyond their means on easy credit...

Profiler

challengemaster wrote: »

If you want it, get it would be my opinion, as long as you can afford it.

Life's too short lived, treat yerself to what ya want

bigkev49 wrote: »

How are things back in 2005?

+1

Just what I was thinking.

That kind of approach is not very smart even in a booming economy, never mind the one we have right now.

miju

I have a loan out for my current car which works out at about 15% of my weekly wage which is perfectly affordable in my book anyways

Wudyaquit

50% seems a bit steep, but it's a good time to spend if you've the cash. You're unlikely to have the same depreciation over the next few years as you would normally. I'm looking myself at the moment, but more in the 33% range, only because I only drive about 8,000 miles a year.

pburns

pburns wrote: »

but the best advice is not to get a loan. Too many numbskulls were living a lifestyle beyond their means on easy credit...

do you have a loan for your car and do you pay insurance monthly or all in one premium at start of year?

54321

maidhc wrote: »

I don't think you should get in debt for a car. But if you have spare cash, and not forcing the kids to live on rice cakes, then spend whatever.

That's spot on.

Its not a just a box that gets you from A to B.

Its much more than that.

Anan1

pburns wrote: »

but the best advice is not to get a loan.

+1. As i've said before, it's one step up from taking out a loan for your weekly food shop.

samhail

It might be the place for a new topic, in like banking or something like that (if it is can someone post it)
but can i ask why people are so against loans ?
If you can plan financially for the next 5 years then it should be OK ?
(i ask this question now after taking a loan out for 11k )