Car price to salary guide

Colts

Hey guys,
Without wanting to quote figures etc, I was just wondering what peoples opinions were on the price of a new car purchase compared with gross salary.

I'm thinking of upgrading my car to one that I really want but don't want to overstretch myself with it, and i'm just curious as to what other people use as a guide when purchasing.

Obviously circumstances differ on a case by case basis!

thebiglad

Gross salary is irrelevant - its down to net salary if you are financing it or level of savings and job security etc savings if not.

Henry Ford III

If you can afford it and want it, go for it.

....... depends on other outgoings too, rent, mortgage etc.

kildare.17hmr

No one can really answer that for you, i make a fair bit more than a mate of mine but he drives a nicer car. Iv 2 kids, girlfriend and house to pay for he is single!

Colts

I know everyones circumstances differ, but was just interested in the ratio for single people no mortgage when compared to people with kids/mortgages etc...

This car I'm looking at is 50% of my salary, I've very little outgoings (no kids planned anytime soon), moreso a thread out of curiosity!

robbie99

What level of savings do you have or are you planning on financing?

xebec

I'm single, no kids, no mortgage and recently bought my first car - spend was roughly 25% of my gross and that was more than I had originally planned. This allowed me to have a reasonable repayment over 4 years, allows me to continue building up my savings (although at nowhere near the same rate) and to cover the running costs for the car all while keeping my lifestyle at the same level - however if my salary had been higher I would probably have been more likely to spend a higher % of it, all comes down to personal circumstances.

mickdw

Well, as an example, I think a single person on 40k a year can afford a 20k car.

Colts

robbie99 wrote: »

What level of savings do you have or are you planning on financing?

I'll finance about 2/3rds of it, the other 1/3 coming between savings of a few k and trade in.

CountingCrows

mickdw wrote: »

Well, as an example, I think a single person on 40k a year can afford a 20k car.

A single pioneer maybe

barura

Lolwhat? I drink beer and if I didn't move out, I'd have about ~350 a month to spend on a car. I'd love a new Fabia. But if you budget it out, I could probably buy an Octavia or even a nice Superb secondhand. (2010)

Ahhh, the wonders of personal financial management... In a perfect world of course! That would mean being pretty strict with my outgoings as well... So not much point as I don't necessarily need a new car! When I get into full time employment, a new (ish) car is definitely on the cards.

alias no.9

<1 months take home where possible
see the bangernomics thread for inspiration

bazz26

Base your decision on what you can afford from your disposable income i.e. typical weekly/monthly take home pay less any weekly/monthly outgoings. It's basically what you have left in your pocket each week or month after all bills are paid, essenials like food/drink, loan/mortgage/rent repayments, current car running costs and if you have a regular deposit savings or investment scheme.

Generally if I had to borrow for the car I would only borrow upto 35% max of my disposable income. Circumstances can change very quickly and a heavy loan on a disposable asset is always going to be a looser.