How much should you spend on a car?

[TheX]

We see the crazy budget calcs that should your rent/mortgage should be like 30% or whatever of your income. I asked my small circle of friends, what percentage of their base salary (gross before bonuses) was their latest car out the door price.

One of them said 105%. Seriously, bought a truck for over $100K and barely makes that much.

Mine was 17%. I feel good about that. 105% is almost criminal.

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[jkernitzki]

The most common guideline I see for cars is 20% of your take home pay, if you're talking payments and 20% down, and inclusive of gas & maintenance as well.

If you're talking total purchase price I don't think there's an absolute value recommended, though I seem to vaguely recall something like six month's gross salary.

That's why I just paid cash. It didn't impact my cash flow one bit. My savings is already nearly recovered after 3-4 months.

 

[Ksnau]

First of all.Yeah, that's a crazy price.But yeah, i've never thought about it in terms of the cars.Cost always in terms of payments.Like mine is sixteen point five percent of my take home after taxes and everything per month.And that's higher than I would usually go, but I wanted something very specific.And of course, they didn't have it.So I had to get a model with more stuff that was more expensive.Although I am happy because even when I bought it in march of twenty twenty three I was able to get it for less than msrp but it's still hurt spending that much even if it was a heritage limited.And it's definitely the last new car.I'll ever buy

 

[dockiwi57]

We see the crazy budget calcs that should your rent/mortgage should be like 30% or whatever of your income. I asked my small circle of friends, what percentage of their base salary (gross before bonuses) was their latest car out the door price.

One of them said 105%. Seriously, bought a truck for over $100K and barely makes that much.

Mine was 17%. I feel good about that. 105% is almost criminal.

My folks married and started a family in 1936 at the height of the Depression. They left me with financial lessons (not calculations) that have been helpful. Near the top of the list is "always live below your means." It's been a guiding principle for me, things tend to work out better when I keep it in mind.

 

[RSH]

It was recently noted that the average new car price is 50k dollars.
A lot of people don't actually purchase their vehicles, they lease them which typically allows for a lower payment than when purchasing the same vehicle.
People also buy vehicles based on the payment they think they can afford, these days its not unusal to have a $1000 + a month car payment, unless stretching the payment out over 72 to 84 months.

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