re: What percent of your household salary are you willing to spend on a vehicle?

vehicles are an expense and not a “ depreciating asset“.

Mine and the wife’s car are paid off. Will keep it that way for a long time since both vehicles are under 100k mikes

I have a saying that if you have to finance a car or boat. You can't afford the car or the boat. It has served me fairly well.

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Drive crappy used cars. I'm early in my career and it's a dumb investment at this time for me. Mine are paid off

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I always compound the difference in price at 7% over 65-n where n = my current age and only spend the money if I can sleep at night over what the final number is.

Generally, I don’t want to spend more than $50-60K on a vehicle. My current vehicle is 6 years old and cost $51K with TTL. I’ll keep it a couple more years hopefully. It’s a luxury car...and I recognize it as a want and not a need.

BRB, gotta take a picture of my Shelby Cobra in front of my single wide out in Livingston.

We don’t think of it on an annual basis, it all depends on how long you keep cars. We pre-save, make earnings on the savings and pay cash. Yes I know rates are low, but this is our strategy and will still work if interest rates go up. We save ~3.5% of salary towards vehicles and keep them ~8yrs.

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it's a dumb investment

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Not an investment at all actually

You are on right track

Personally I think 20% of gross household income provides a good balance of both vehicle comfort and financial responsibility. So if your household income is $100k, your out the door vehicle price should be $20k. If vehicles are really important to you then you could make an argument for 25%.. But once you get into 30%+ you are probably overspending for luxuries to the detriment of your finances.

I think this is a pretty good rule of thumb for a majority of household incomes and family situations. If you are single I think you can add 10% to all numbers above. So 30% would be reasonable and 40%+ would be overspending..

Also, I am sure my opinion is not shared by many.

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I have noticed a ton of the 2021 Yukon Denalis and Z71 Tahoes rolling around my Louisiana town lately. The dealerships aren’t really taking any money off these vehicles so everyone’s paying about $90k with TTL.

What’s your rule of thumb, 10%, 15%, 20% or more of your household salary?

I think I like to keep it around 20% but that means you would need to make $450k in household income to comfortably buy this vehicle. Maybe there’s more people making $500k+ a year in this state than I originally thought.

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If I bought a 90k vehicle I’ll trade in one that’s worth 30k to 50k and put enough money down to have a payment under $700 a month for 5 years. It’s very easy for my wife and I to drive very nice cars and have $1500 to $2000 a month and be at 4% of our monthly gross income.

My wife’s car was 97k MSRP and I bought it 2 years ago for 72k with 6700 miles on it. Got 27k on trade and put enough money down for a $650 payment for 5 years.