OK, heres my thing, what percent of your income should go to a car?

Discussion in 'OT Driven' started by thomor25, Mar 16, 2005.

  1. thomor25

    thomor25 I make money online....

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    Reason I ask is I have been driving 1993 and under used cars for a while, I'm 24 just out of college a year ago Dec and would like to get a new or semi new car. My mother specifically said I should not get a new car until I have the money to pay for it and to not get a car loan out. That being a factor in buying a car what percentage of your gross income should go towards a new car or car period? I like bmw m3/m5 645i(i wish), the porsche, vw/audi, nsx, vette, and wrx maybe, then there is the pipe dream cars such as teh ferrari and lambos but forget about that cause I'm going to be sleeping in it if I get one. Now all of those are in different price ranges. I'm trying to figure out what would be best price, fun, realistically wise. I'm leaning towards the m5 or m3.

    This is not a joke and I would like honest opinions as I am leaning towards an european car, which I dunno.
     
    Last edited: Mar 16, 2005
  2. Peter O'Hanraha-hanrahan

    Peter O'Hanraha-hanrahan OT Supporter

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    it depends on your lifestyle. anywhere from 15% to 40% seems to be what people spend :dunno:
     
  3. Louis M

    Louis M New Member

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    a.l.a.p. = as little as possible

    at your age, you should not be extending yourself for a car, so i'm thinking more along the lines of about 20% if you buy outright
     
  4. yo vanilla

    yo vanilla New Member

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    i used to be a finance manager, so i know a little bit about this. i have seen many people either buried in a car they want/need out of, or wish to buy a car thats right at their limits. the question you've got to ask yourself is how important is the car to you, really? i've been a car nut since i was in the womb but i dont have anything really fancy (wrx) because, well theres other expenses in life. lol the last thing you want is to have a really expensive car, high insurance, and no money left over or gas, rent, etc.

    why wouldn't your mother want you to take a loan? i'm guessing you dont have much of a credit history built up, so you're going to need something - will you ever want a house i.e.? do you have anything saved up? if you've got iffy credit, to get approved you'll need at least a downpayment and maybe a co-signer.

    if it was me, i would figure out 50-70% of your yearly salary and cap that off as the purchase price of the car. (so if you make $30K/yr, then find something under $18Kish). get a nice downpayment, $2-5K perhaps. then take out a 60 month loan on a newer, reliable car that you've checked insurance prices on. your payment ought to be under $300/month which, imo is a fairly hefty payment for a young person.

    save the expensive cars for later in life. you've got plenty of time and i promise you wont regret that :)
     
  5. waspride

    waspride Can't this wait till I'm old, can I live while I'm

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    25% on car payment

    25% on rent
     
  6. bottomline

    bottomline Guest

    Perfect.

    :wallstreet: :o
     
  7. T-T

    T-T Born Into Retirement

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    :werd:

    I have two more standards to my car-budget:

    - The total cost of my car(s) should not be greater than my annual income.

    - I have to be able to buy 10 of them.
     
  8. black 3g

    black 3g Guest

    i would say no more than 45%-50% of your income on both the vehicle and housing.
     
  9. Slimmy

    Slimmy Get Richt or Die Trying

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    I make about $25,000 a year in an entry-level IT position, and I just bought my car for slightly under that much.

    But I don't pay rent currently and I'm fairly frugal with my money so I know I can afford it.

    :o
     

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