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

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Fenixgoon said:
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.
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Depends on the bike. 😉

I paid $6500 OTD for my SV650 brand new and sold it 3.5 years later with 17,000 miles on it for $4000. I paid almost $14k OTD for my Ducati 3 years ago and today I could probably get $8k for it... maybe.

My car payment right now is about 7% of my monthly income.
 
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I paid cash for all three of mine. They're all worth the same or more than their purchase price, too - happens when you buy old Toyotas with 200k+. They've pretty much stopped depreciating. 😛
 
jlee said:
When someone asks you what you paid for your house, do you include your electricity, water, cable, and internet expenses?
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No. But that isn't particularly relevant either.

After you factor in the size of your down payment, mortgage term, APR, mortgage interest, PMI, homeowners' insurance, HOA dues, and property taxes, as well as the utilities you mentioned, the purchase price of a house has disturbingly little to do with housing costs.

(To answer your question, I would probably give them the amount I pay every month to the mortgage servicing people, which includes all of that except utilities.)
 
My 03 330i was roughly 10% of my take home income for a 2-year loan, it's paid off now. I'm looking at an 05 M3 with much lower miles that'll be around 10% for 5 years.

And then a couple years ago I paid cash for a 2003 SV650 with 9k miles

edit: 85k income, 9k and 25k cars respectively, 2.5k bike.

I'm not great with money but I'm not terrible either. I put ~50% into 401a/403b and stock investment accounts
 
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It's important to list income and cost of the car at the time. Other things like necessary payments you had would also help with context.

Percentages aren't that helpful by themselves.
 
dave_the_nerd said:
No. But that isn't particularly relevant either.

After you factor in the size of your down payment, mortgage term, APR, mortgage interest, PMI, homeowners' insurance, HOA dues, and property taxes, as well as the utilities you mentioned, the purchase price of a house has disturbingly little to do with housing costs.

(To answer your question, I would probably give them the amount I pay every month to the mortgage servicing people, which includes all of that except utilities.)
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My interpretation of the OP was that he was looking for purchase price, not total cost of ownership. 🙂
 
It's tough because you can finance those things out to 7 years easily these days. I've got 2 cars financed at 1.49%. For that rate, it doesn't make sense to pay them off because I can make more money in the market.

My single car payment is like 6% of my gross income @ 5 years. My wife has a car payment too, but hers is higher. She makes more than I do and bought a new car instead of a used. I'd say her ratio is like 5% of gross @ 5 years...
 
So I paid for my car in cash, about 7% of yearly net income. My wife's car is on a loan, total cost was about 15% of net income at the time (around 11% now) and our payment on it is roughly 3.5% of net monthly income on a 60 month loan.

Adding costs for maintenance, fuel, and insurance I would put our total car costs at 12-13% of net monthly income.
 
Splurged and purchased (or am purchasing) a corvette for my next daily driver (keeping the Evo X for winter / bad weather / track). Paying a hair under $60k OTD (financing 40k for 66 months at 1.75% as that is what the CU was offering). That was actually more than I planned to finance but the interest rate just makes it totally worth it. Annual gross is 120-130k depending on overtime/bonuses/etc... (I'm a consultant). I use my parents address as my "home" address and my company pays just over $1k a week (tax free) for expenses (for living a few states away).

- Not married / no kids
- No debt (other than this new car loan that I'll have)
- Rent in whatever location I'm working (currently living in a relatively low cost of living area compared to the national average)
- Currently have a roommate and prefer to have a roommate if possible
- Other hobbies (hiking / camping / running / shooting / biking / etc...) are fairly cheap
- I don't currently own any property (would love to but it's impractical given my current choice of careers - and I have no clue where I want to live)
- I love driving for fun and do it more then as a point A to point B thing... otherwise I'd just buy a Yaris
 
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I don't have to waste money on kids, so I have more money to "invest" on fun things. 🙂 So when you try and formulate car value vs net income, it really isn't a complete equation. If you get rid of money pits like kids you can increase the fun ratio, invest it, or both. I see people wondering how people can afford this or afford that all the time. And then I look at them with 5 kids. Well, there's your answer.

As for me, I have an old paid off truck and I bought my wife a new Mustang back in 2010. Nothing extravagant, but I do spend money on other fun toys. 🙂
 
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...
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respect
 
Any "rule" is really for if you're struggling, or at least not able to live comfortably with your income, in my opinion. If you're doing well, and it is a hobby, dipping in to the disposable income for a vehicle isn't a big deal. Long term could the money be better spent? Well. That depends. Could you turn it in to more money? Sure. Will your quality of life improve because of it? That one is complicated. I'm younger than most able to get nice toys (mid 30's), and choose to allow myself to enjoy what I have while I am young enough to really enjoy it. Does it make financial sense for me to buy a brand new car every year? Not in the slightest. Does it make sense for me to if I take a holistic view of my life and don't just isolate finances (since I am not overly concerned about that anyway)? You bet.
 
in 1996, when I was a teenager, the price of my first car was about 20% of my part time jobs annual income.

In 1999, after 3 transmission rebuilds on my 1st car, I spend about 15% of my college part time job era income.

In 2003, after I got a better job and went from making like 25K to 40K, I spent about 35% of my annual take home revenue for one year on a car.

In 2010, I spent around 15% of my annual take home revenue for a car

in 2015, I will likely be spending 15-20% or so on yet another car since my fiancee's car is dying...
 
I spend a total of 6% on two vehicles total expenses, one used with a small loan, the other SUV paid off many years ago (200K miles so far). When I was single and childless, I spent upwards of 30% per month, or about 50% purchase price of vehicle compared to annual salary. Now I drive them until they quit.
 
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