% of salary on car

Tails142

Tails142 wrote: »

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.

good breakdown of what a car actually costs.. seems like an expensive job owning a 328.

just to clarify, i meant value of car as a % of one years salary.

so in my head, i'm thinkin 28k salary, 15k car paid of over 5 years.. pretty much in line with what you said you'd do if you were doing it again.



I think I started this thread because I'm planning for a car more expensive than higher paid people in my workplace own.. So by that logic I was thinking that I'd be shooting above what I should be looking at

samhail

samhail wrote: »

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 )

I'm with you on that..

My logic has always been that for some things, I'd rather pay the interest on a loan as a cost of owning it now than saving the amount and owning it later. With financial planning of course..

Side note, I got into about 5k debt in college knowing the money had a higher value to me back then than it does to me now paying it off.

Hogzy

It all comes down to priorities...

Those who LOVE cars will spend a higher percentage (sometimes a stupidly high percentage)

And those who see cars as a "tool" obviously wont be spending as much...

You can say the same thing about any luxury in life... clothing, holidays etc etc...

IMO tho the more id earn the higher the percentage id spend on a car... Eg if i was earning 20k id spend about 3K on a car... Where as if i was earning 400k id be spending a good 150-200k on a car... What else would i spend it... If your gonna work hard enough to earn 400k then im enjoying the time i have going to and from work in a car iv earned!

mumblin deaf ro

By the sounds of it, you might ber better off getting something more modest this time around and maybe get something closer to €15K next time when your salary has moved up a bit and you've got rid of your debt.

If there's a particular car you have your heart set on, then say so and maybe some people here could give you advice on how you might get something close to it for a smaller budget, e.g. by going to the UK.

Good luck with whatever you decide.

well havnt looked in a while but somethin along these lines..

http://pistonheads.com/sales/837921.htm


it's definately a desire for a certain car. 320cd. :P

samsemtex

Deleted User wrote: »

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

I would rather infect myself with the aids virus than pay that amount of money for a ring. On €60k thats €15k on a ring. She can **** right off!!

arse to 15k on a ring.. 50euro max

S.I.R

the ring out of a Halloween brac will do


also


any pay what you have in your pocket, if you need more, wait and earn it.


loans are for eejits tbh.

patience is essential

CyberGhost

3 Month salary on a ring!!!!? hhhhttkssssssshh...........

roosterman71

I think getting a loan is a bad idea. Save and then buy it. At least its yours then and ya needn't worry bout repayments.

I bought a 96 escort in 04 for €750. I wanted a better car but decided to save instead of getting a loan. Spent 2 years saving hard, putting what would be my loan repayments, and a little extra (if I got a loan) into a savings. In 27 months I'd 20k saved and went a bought a new car.

Unless your really stuck, why get a loan. Save the money and gain interest instead of paying it. Worked for me anyway

thewing

Don't get a loan, buy what you can afford...as long as it gets you from a to b then you're sorted.

Getting yourself into hock so you think you look better in a better car is idiocy of the highest order....you might as well take out a loan for designer clothes....

i didn't realise so many people were against loans.. has peoples attitudes changed?

there's no way i could save towards a bmw. i'd rather pay the extra 2-3k interest to own it now rather than in 5 years when i'd have saved enough..

eg.

save for 5 years and then get car: 450 a month
loan for 5 years and own car now: 500 a month

i go for loan.. but i don't have a mortgage or kids so it's easy for me to say that.

peasant

Deleted User wrote: »

i didn't realise so many people were against loans.. has peoples attitudes changed?

there's no way i could save towards a bmw. i'd rather pay the extra 2-3k interest to own it now rather than in 5 years when i'd have saved enough..

let me guess ...you were born in the late 80's ?

It's not necessarily attitudes that have changed, but circumstances certainly have

1987 :P


is this one of those things that in 10 years, i'm gonna look back and wish i'd known better?

peasant

Let me put it this way ...

If there is a chance that you may become unemployed for a while or even might have to leave the country and you already HAVE debt ...it is generally not considered wise to burden yourself with more.

It BeeMee

Deleted User wrote: »

just to clarify, i meant value of car as a % of one years salary.

Ah but the question is Gross salary, or Nett salary?

Take the 60k quoted earlier:
50% of gross = 30k
50% of nett = 20k (assuming 1/3 goes on taxes PRSI etc)

So, for example, do you buy a Mondeo or a Focus? An Astra or an Insignia? A Golf or a Passat?

Again, it all comes down to what you can afford.

ya, i think that sums it up really..

i might look for a forum suitable for the debt thing and start a thread. some people rather saving and others rather borrowing.

aquascrotum

Lots of factors to consider.

I'm +1 to everybody else who has said to avoid loans. Unlike (apparently) just about everyone else in Ireland, I've never had a car loan. I worked for a summer and bought my first ever Fiesta (God rest her soul), it took me to my first proper job for 2 years before I was able to buy a Seat Leon, then 3 years later I moved onto bigger and better again. None were new, none were perfect, but all did the job. As me da says, once you've saved the money for a car, you know the effort and time it's taken, and you'll take better care of the car when you do get it.

In these times you want assets, not liability. Whilst a car will depreciate, if you own it outright from day one it is an asset worth hard cash to you when your job goes down the swanny in February. If you have a car E600/month loan, it's just one more thing you can't afford.

Also, imo, it's not simply a case of can you afford the initial capital cost. You have to take into consideration the likely depreciation over the duration the car is going to be in your ownership (and also the way that depreciation will be affected by what you intend to use it for). Do your homework. A more expensive car might be a better buy if it you are confident that it will lose less real value than another car.

I also don't like thinking of things purely in monthly terms - its an easy way of duping yourself that it isn't an incredible amount of money. Don't kid yourself. A 25k car, even if your only paying E300 a month or something, is still E25k. Its a lot of money in anybodys book.

Zube

Deleted User wrote: »

i didn't realise so many people were against loans.. has peoples attitudes changed?

Not mine: I've never had a car loan, and I was finishing college when you were born.

when you put it like that it's hard to argue against..

what's your views on mortgages and credit cards?

Zube

Zube wrote: »

Not mine: I've never had a car loan, and I was finishing college when you were born.

different times..

eg. i bet you own your own your own home? my generation can't do that.

peasant

Deleted User wrote: »

what's your views on mortgages and credit cards?

As nobody can pay for property in cash, a mortgage is a necessary evil.
Credit cards are handy instead of carrying cash, but I've always paid mine off in full at the end of the month.

thewing

Yes....a 22 year old getting into debt to buy a beamer....my car at that age was a €500 vectra....birds will not drop to their knees at the sight of a beamer, trust me...

thewing

thewing wrote: »

Yes....a 22 year old getting into debt to buy a beamer....my car at that age was a €500 vectra....birds will not drop to their knees at the sight of a beamer, trust me...

words of wisdom along with the maturity of a 12yr old turning a discussion about money into a personal insult.

Zube

Deleted User wrote: »

different times..

eg. i bet you own your own your own home? my generation can't do that.

No, I'm on year 17 of a twenty year mortgage. Mortgages are a different matter from car loans and hire purchase schemes. Oh, and when I took out the mortgage, the interest rate was about 13%, which your generation has never seen.

thewing

Er...where was the insult....just stated my own personal experience....but please go ahead and squander your money then.

peasant

Deleted User wrote: »

words of wisdom along with the maturity of a 12yr old turning a discussion about money into a personal insult.

Careful now !

Don't throw your toys out of the pram because people are talking sense

GigaByte

Zube wrote: »

No, I'm on year 17 of a twenty year mortgage. Mortgages are a different matter from car loans and hire purchase schemes. Oh, and when I took out the mortgage, the interest rate was about 13%, which your generation has never seen.

Looks like you must have remortgaged if you're only on year 3 now? How come?

peasant, the discussion was goin pretty well and i was starting to change my opinions after aquascrotum's post above..

thewing's post was just condescending as fuck

and also, in a motors forum, a 2 litre diesel bmw for 15k is considered squandering money? especially an import with more extras than irish model and so will hold value better?

15k for a car at 22 is the same as a 15k car at 30. there's worse ways to squander money.

peasant

Deleted User wrote: »

thewing's post was just condescending as fuck

I'm saying it wasn't

And if you circumvent the swear filter another time I'll ban you, got that?