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      06-04-2013, 02:36 PM   #1
KwlAznKid
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What percentage of your income goes to car payments

or if you paid your car in full that's your rule of thumb on what your "budget" is on what to spend on a car?

I'm curious to hear what everyone has to say, i'm sure many of us could afford monthly payments for a much nicer car but what made you say "okay this is how much I should spend on a car to be reasonable"?
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      06-04-2013, 02:38 PM   #2
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i got my m3 straight out of college after getting a real job. it was a stretch but i paid it off in under 2 yrs and i still have it.

it's worth it to throw it down for quality, just don't be one of those suckers that trades in a car every 3 years and has payments forever.

cash and used is how i do it now. (well i was screwed over and my credit sucks anyway, though financially that's probably a good thing. even if i wanted to borrow nobody would lend it lol)
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      06-04-2013, 02:39 PM   #3
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inb4 someone says 50%.
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      06-04-2013, 02:44 PM   #4
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Quote:
Originally Posted by R Grubba Balls View Post
i got my m3 straight out of college after getting a real job. it was a stretch but i paid it off in under 2 yrs and i still have it.

it's worth it to throw it down for quality, just don't be one of those suckers that trades in a car every 3 years and has payments forever.

cash and used is how i do it now. (well i was screwed over and my credit sucks anyway, though financially that's probably a good thing. even if i wanted to borrow nobody would lend it lol)
nice

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inb4 someone says 50%.






to clarify my question let's say you make 100K a year, would buying a car worth 30K be smart? (as in 30%) too much spent? too little? (regardless or paid in full or financing)
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      06-04-2013, 02:52 PM   #5
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Depends on your situation, IMO.
I once bought a car myself at 50% of my salary. I had very few other expenses at the time. I didn't think about it too much.
My wife and I recently bought a car at 25% of our combined salaries. Plenty of other expenses, including house and retirement accounts. Took nearly a year to convince ourselves to go for it.
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      06-04-2013, 03:01 PM   #6
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Payments are just over 2% of monthly gross income for the M3 and 2012 Mini Countryman.

Actual cost of the two cars would be about 12% of annual gross income. But at .09% financing, why fork over the cash.
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      06-04-2013, 03:05 PM   #7
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Quote:
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I once bought a car myself at 50% of my salary.
phew! made it.
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      06-04-2013, 03:08 PM   #8
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^ i think op is trying to get an idea of "how much is having a nice car worth"

given the audience, i'd say it's worth it if you sacrifice in other areas, get something nice, and keep it
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      06-04-2013, 03:24 PM   #9
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My payments are about 17% of my gross monthly income. I usually pay about 25% of my gross monthly income as I would like to try and get the car paid off in the next three years. I have relatively very few bills to pay, (rent, electricity, internet, and school loan.) I just graduated collage last summer and started at my first professional position that same month. I got lucky where I was interning and got hired on after I graduated. I traded my previous car a 2001.5 Audi S4 that was paid off as my down payment on the 1er along with some graduation money. My situation on purchasing the 1er was practical enough to rationalize to my self spending so much money on a car right out of college. Who are we kidding, we are all car enthusiast and probably spend way more money than we should or need to on our cars. In hind sight I could have just kept the Audi and been saving a big chunk of change every month! I really don't know which would make me happier.
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      06-04-2013, 03:28 PM   #10
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This is a scary read. A car payment should not be no more than 8%-10% of monthly income. Anymore than that unless living with family would be damn crazy in my opinion.
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      06-04-2013, 03:31 PM   #11
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Quote:
Originally Posted by kits135i View Post
This is a scary read. A car payment should not be no more than 8%-10% of monthly income. Anymore than that unless living with family would be damn crazy in my opinion.
you should probably avoid the import scene then (i.e. students who blow up their credit cards for rims)
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      06-04-2013, 03:37 PM   #12
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Quote:
Originally Posted by R Grubba Balls View Post
you should probably avoid the import scene then (i.e. students who blow up their credit cards for rims)
That is just sad... Thanks for the heads up...
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      06-04-2013, 03:45 PM   #13
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30% of my monthly salary
But that's for 4 cars
X3 for my wife is 690
Mazda 3 for my step son is 250
My 88 M3 is 350
And my S4 (my winter beater) is 200
But the M3 is going soon
Will be replaced by the Alfa Romeo 4C
Which will make the payments go up
But fuck it
You only live once, and cars are what I love
I don't drink, I don't do drugs, and I can't get away with sleeping around anymore
So cars are my vice, I don't really spend my money on anything else
Except family of course
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      06-04-2013, 04:00 PM   #14
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      06-04-2013, 04:19 PM   #15
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      06-04-2013, 04:22 PM   #16
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Quote:
Originally Posted by kmarei View Post
... fuck it
You only live once, and cars are what I love
I don't drink, I don't do drugs, and I can't get away with sleeping around anymore
So cars are my vice, I don't really spend my money on anything else
Except family of course
True. When I first got a job I bought a car worth 80% of my starting salary. Not the best decision and I wouldn't recommend it, money gets really tight.

Now I have all vehicles paid off, it is a much better feeling. Although I am looking at adding another to the mix
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      06-04-2013, 04:27 PM   #17
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Again, it all depends what your financial situation is, your marriage/children status, other debt,etc.

Don't look it on such a micro level. Look at your bills/expenses on a macro level.

In general, it's wise to keep your necessary bills/expenses under 50% of your take home pay. That includes: mortgage/rent, car, insurance, utilities, etc.

Some people prefer to live in a place that costs $1500/month and have a car with a $300/month car payment.

Others may prefer a $1000/month place with an $800/month car payment

You could argue either situation.

I chose to finance my car for 72 months (at 2.9%). In the past, that was a very bad practice as your vehicle is deprecating faster than you're paying it off. However, now that interest rates are so low, it makes much more sense to hold onto that money and invest it.

Some people don't like carrying debt and using the Dave Ramsey method. That's perfectly fine. In my opinion, that method is best for the "alcoholic" spenders. Like alcohol, debt is good in moderation. However, when it becomes a problem, you ultimately need to stop entirely.

I'm 24 years old and single with no kids. I make very good money for my age and don't spend it. However, even still I chose to go with a very reasonably priced car. Before my BMW I owned an 09 Accord and an 04 Infiniti M45. I drove both of those cars at least 15k miles each and still made $3k and $5k(respectively) off each one.

My situation is pretty extreme (on the conservative side), but for the past two years I've lived in cheap houses and driven cheap cars. I'm an investor by nature (and profession) so I hate the word "depreciation."
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      06-04-2013, 04:50 PM   #18
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This topic came up on the 1addicts board a little while ago and the response was rather surprising. I was expecting most answers to be around 15% or less of gross monthly income, though many were significantly higher.
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      06-04-2013, 04:53 PM   #19
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I dont know if this is good or bad but 0%...... Stay at home gf. He pays everything.
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      06-04-2013, 04:54 PM   #20
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Quote:
Originally Posted by JasonCSU View Post
This topic came up on the 1addicts board a little while ago and the response was rather surprising. I was expecting most answers to be around 15% or less of gross monthly income, though many were significantly higher.
I would assume that many 1-series owners are younger people who are single with no kids. Again, that's the kind of person who can afford to devote a larger percentage of their paycheck to a car payment.
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      06-04-2013, 05:04 PM   #21
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%12 but mine is only a 3 year with less than a year to go and the wives is a 5 year.

It's so tempting to buy expansive cars because I can "afford" it. Almost leased a brand new range rover sport for 800/m. Payment could be made I just couldn't justify(although I want it really bad).

Then I look at r8'a in the high 80s and play with payment calculators One day.

I should just refi the home for 5 years then play later.
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      06-04-2013, 05:06 PM   #22
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Quote:
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I dont know if this is good or bad but 0%...... Stay at home gf. He pays everything.
haha.

0% for me.
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