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Message
What is the ratio of the price you paid for your car to your annual salary?
Posted on 3/16/15 at 12:01 pm
Posted on 3/16/15 at 12:01 pm
quote:
The 1/10th rule for car buying is simple. Spend no more than 1/10th your gross annual income on the purchase price of a car.
LINK
49
Posted on 3/16/15 at 12:02 pm to hikingfan
8/1
Posted on 3/16/15 at 12:02 pm to hikingfan
nouveau riche board
Posted on 3/16/15 at 12:03 pm to hikingfan
If thats the case, there would be a lot more 90s Carollas on the road...
Posted on 3/16/15 at 12:04 pm to hikingfan
Just note? No gas, insurance, etc?
Posted on 3/16/15 at 12:04 pm to hikingfan
As in, no more than 1/10th in the payments per year? Because purchase price ain't cutting it. You can't find many cars for around $10k, especially not one you'd want to drive if you were making close to 6 figures.
Yeah yeah, I know. OT ballers pay cash for throwaway cars that cost $80k.
Yeah yeah, I know. OT ballers pay cash for throwaway cars that cost $80k.
Posted on 3/16/15 at 12:04 pm to hikingfan
That makes no sense
Posted on 3/16/15 at 12:05 pm to waiting4saturday
So a person making 100K is supposed to spend no more than 10K on a car? I suppose a family making a combined 150K is supposed to split 15K on two cars, and I hope they never have to buy a kid a car. This is just not possible to follow.
30% would be a more attainable goal, but most would not fall into that, especially if you consider multiple car families.
30% would be a more attainable goal, but most would not fall into that, especially if you consider multiple car families.
This post was edited on 3/16/15 at 12:08 pm
Posted on 3/16/15 at 12:06 pm to hikingfan
so if you make $50k a year, you should own a hooptie that cost $5k?
Posted on 3/16/15 at 12:06 pm to hikingfan
quote:nice troll
Spend no more than 1/10th your gross annual income on the purchase price of a car.
so i need to make 160K to roll in a base Honda Civic?
Posted on 3/16/15 at 12:07 pm to oilmanNO
quote:unless it means
That makes no sense
yearly salary/10 then divided by 12 to come out to your monthly payments
Posted on 3/16/15 at 12:07 pm to TigernMS12
quote:
So a person making 100K is supposed to spend no more than 10K on a car?
Dumbets shite I ever heard. I wouldn't buy an $80k car but only $10k... right.
Posted on 3/16/15 at 12:08 pm to hikingfan
$200k - $250k Toyota Prius, Toyota Camry, Honda Accord
Posted on 3/16/15 at 12:08 pm to hikingfan
Most financial guru's recommend buying a quality used car for cash, and then driving it until the wheels fall off.
You can't do that with the 1/10th rule. Most people would be buying something that may need a lot of maintenance in the near future, or even replaced.
The fact of the mater is that cars aren't bought by most people with cash in hand. They are financed, and therefore you may want to keep your annual payment total to less than 10% of your gross income.
You can't do that with the 1/10th rule. Most people would be buying something that may need a lot of maintenance in the near future, or even replaced.
The fact of the mater is that cars aren't bought by most people with cash in hand. They are financed, and therefore you may want to keep your annual payment total to less than 10% of your gross income.
Posted on 3/16/15 at 12:08 pm to hikingfan
Posted on 3/16/15 at 12:08 pm to hikingfan
25:1
Posted on 3/16/15 at 12:10 pm to hikingfan
1/10 seems absurdly low. It would be nice, but there just aren't enough buying options.
Maybe don't finance more than 1/10 of your salary?
My car was more than 1/4 of my salary years ago and it has worked out well. Can we at least subtract trade in value from the total?
Maybe don't finance more than 1/10 of your salary?
My car was more than 1/4 of my salary years ago and it has worked out well. Can we at least subtract trade in value from the total?
Posted on 3/16/15 at 12:11 pm to hikingfan
20:1 I buy used because I can!
Posted on 3/16/15 at 12:12 pm to hikingfan
How many 150k to 200k earners out there driving Honda Civics??? Absolutely nothing wrong with that, just don't think that's an accurate line of thinking. When you step up to the 200k-250k you get into some luxury though......you know the Accord or the Mustang
Although the vehicle I drive daily does fall in my bracket, but it's just a commute vehicle.
ETA: I do pay a good bit less than a 10th of my monthly income on the note for my vehicles.
This post was edited on 3/16/15 at 12:14 pm
Posted on 3/16/15 at 12:12 pm to JudgeHolden
This rule works if you buy used.
Lets say you make 60K.
You can spend 6K on a car per year. Save for your car for 4 years. Pay 20K for a new camry or accord and drive it for 10 years or 200k miles.
You only spent 20-24K on the car over 10 years which is 2.4K per year. Yes maintenance is more, but not much more.
Lets say you make 60K.
You can spend 6K on a car per year. Save for your car for 4 years. Pay 20K for a new camry or accord and drive it for 10 years or 200k miles.
You only spent 20-24K on the car over 10 years which is 2.4K per year. Yes maintenance is more, but not much more.
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