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How much do you pay for your cars compared to income?

I

Insomniator

Diamond Member
I know this varies wildly, just wondering what people consider to be a reasonable amount for a car vs their income. Not talking about outliers like 'i make 200k and drive an 89 civic with 300k on the clock because cars are simply a to b blah blah...'

10% of net income, 20%, 30%?

I'm paying $200/mo (11k used car bought 3 years ago) right now and take home 4500 which I think that is pretty cheap compared to many people. I see $500/mo bmw's everywhere and wonder if people can really afford them...
 
it depends on a lot of other things - do you eat ramen every night for dinner? do you do anything outside of your car? do you have 20 roommates? do you put anything in retirement? you'd be surprised how many people don't.

i started out making 67k and bought a 23k car and a 7.5k motorcycle, which worked out to about 500/mo. i also started out living at home, which was very nice, but even when i relocated and got roommates, i was still able to pay rent, live well, pay off my student loans at a 2.5x rate, and contribute 10% of my salary to retirement

so a lot of it is a matter of priorities.

if i had to do it all over again, i would have looked harder for a used car. bikes don't depreciate nearly as badly as cars, so i wouldn't be terribly concerned about buying a new bike again.
 
These days I lease cars at about 10% of net (take-home). Certain manufacturers are offering such fine lease deals I've lost interest in "owning" a car.
 
About 5% of net take home with two cars. One financed at 0%, the other on a very, very cheap lease.
 
You guys realize that monthly payment vs monthly income is not exactly meaningful right ?
 
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Paid $36k for the truck... Which worked out to roughly 27% of total yearly household income that year. Put down a lot, so payment is only $268 so the percentage of monthly pay is much lower plus my income has been appreciably higher the last couple of years. So my monthly is 3.5 % of my monthly gross base pay. Add in my incentive pay and it is less.

So the story isn't one of scrounging for months to save, but I did buy smart and there is no luxury brand or sports car in the driveway.
 
25% maybe but that includes all maintenance for both vehicles. And both vehicles are financed at 1.9% or lower with less than 30 months left to have them both paid for.
 
My comfort level is total purchase price between 1/4 and 1/3 of my yearly income. Right now I have two cars totaling around the 1/4 mark.

I am somewhat willing to flex on this for cars that have particularly stable value so at some point I may sell the car that is 80% of my total and buy a newer or older one that is worth more.

Viper GTS
 
halik said:
You guys realize that monthly payment bs monthly income is not exactly meaningful right ?
Click to expand...

Yes and no. Saying you spent 40% of your household income on a new truck when your income is 60k.... is also not exactly meaningful either.

If my payment is 2% of my monthly, the meaningful part of that is that either I make a lot of money or buy cheap.... Or that I manage my money well that I'm not about to suck on a $500 a month car payment... Might mean my other expenses are under control as well.

So the question the OP asked was almost too polite. He should have just asked what the out the door price was on our last new or used car buy, how much we were making that year and now, and how much other debt we had. That would have put a more meaningful view on how people spend on their vehicles and the choices that surrounded it.
 
More than I should, less than I could.

It's my hobby and I usually allow myself to spend a max of about 15% per year on it since I keep my other expenses very low (housing is under 10% for example). That said, the Z06 is being funded by some unexpected bonuses (as well as the sale of my stingray) and is more than I'd normally do.

I am talking max yearly spend (i.e. if I buy a new vehicle, what I will pay on top of the proceeds from selling the previous one). Not MSRP of car vs. income.
 
the van we bought is about 40% of our annual net income.(including warranty ttl etc, so OTD price)

but I put 44% down.

and I own my truck outright(and my bike, but I wont finance toys like that)
 
Insomniator said:
I know this varies wildly, just wondering what people consider to be a reasonable amount for a car vs their income. Not talking about outliers like 'i make 200k and drive an 89 civic with 300k on the clock because cars are simply a to b blah blah...'

10% of net income, 20%, 30%?

I'm paying $200/mo (11k used car bought 3 years ago) right now and take home 4500 which I think that is pretty cheap compared to many people. I see $500/mo bmw's everywhere and wonder if people can really afford them...
Click to expand...

I always set max price using 33% rule.
In reality, I typically use 10% for all my personal vehicles.
For the family mobile (aka wifes car), last one I set a cap of 25%. Since we keep cars for the lifetime of the vehicle overall cost are fairly low.

edit: Price meaning total purchase price of vehicle included tax\tags\charges\
 
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I lease. I think the GFs car is around 10% though. If you include my payments on the lease, it brings it up to like ~15% for two vehicles, not including insurance.

I like to keep every bill within a single check. Luckily, I make more money then I know what to do with, so that is easy enough.
 
I love cars, but have decided that I'd rather use my money/time elsewhere at the moment. I take the train to work and most other obligations and my wife is a stay at home mom (and she worked from home prior to our twins arriving). We bought a new 4Runner last year and it represented about 24% of my pay. Hope to make it a few more years on just one vehicle...the insurance costs, gas expense, maintenance costs/time, and concept of money rotting away in a depreciating asset has turned me off car ownership.
 
My truck was maybe 13%ish of my yearly income (pre tax) and my wife's car was maybe 20% of hers. We pay cash for our cars so no loans at all.
 
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