I would love to hear what some of you think is reasonable. I know everyone has different budgetory priorities, but I see some people driving cars that exceed their yearly income.
Is there a formula any of you adhere to or is it just, I want that car no matter the cost type of thing?
Without getting to personal what percentage of income should be spent on vehicle?

Hell, why not make it a poll, with Example being a $160,000 Gallardo.

 

I would say 250-300k a yr.

I wouldn't feel comfortable w/ any less.

 

It's not all about one's gross income. Among other things, it's a matter of net income versus overhead.

 

I agree, and would add depends on how you invest other sums of money. do u make money in the stock market? do you invest in businesses? etc. But if youre going to buy a 160K car, you should be making minimally 200K. it also depends on what your family situation is. a single guy, who makes say 100K(and owns a home, condo already and doesnt rent) might be able to afford a used G at 130-140(depends on interest rates). so many factors to take into consideration. many ways to look at it.

 

Why $200K?? What if someone just pays cash for the $160k car...what does current income have to do with it then??

 

depending on the security of your job....income is never guaranteed and IMO its how well established an individual is and their debt to asset

 

And capital gains on assets, appreciations, etc.

I'm 19. Full time student. Worked part-time over the summer, and now looking for another part-time job.
I'm driving a $50K Infiniti and have a Honda S2000 back home - doing it all myself.

So, my yearly income is probably $10K? I lose.
But I make money from investments.

(FWIW, the Infiniti is a lease and I own the Honda in full.)

But to answer your Q, I would hope someone is making over $200K+ annually (in one way or another) to suppor their Lambo.

 

I'm thinking that's considered income by the IRS.



Again I have to ask, if someone paid cash for the Lambo, what would current yearly income have to do with it?

 

Yeah, I really screwed this poll up. I meant to do it differently and I don't think i can fix it now.
Really the thread was meant to discuss what cars should be purchased by different income levels.
I realize there are lots of factors that change on an individual basis..ie already own a home outright (no mortgages), being single, having no other debt, asset appreciation, downpayment, etc.

I have always heard ones monthly car payment shouldn't exceed 20% of their income, that calculation is probably an easier way to decide on budgets and kind of negate some of the varing factors.

So if you have an opinion on this please post, if not c-ya.

 

Would not spend more than 5% of net worth on cars.

 

WOW, so someone would have to be worth 1 million bucks to only get a $50,000 BMW.

 

You're right back to the income versus budget discussion. If someone has no other debt, why would 20% of their net income be any valid type of litmus test with regard to car payments? If someone had a net income of $100,000/month, but were obligated to non-car payments of $99,500/month, they wouldn't be able to afford anything greater than a $500/month car payment. Even then, they could still put down enough money on the Lambo to be able to swing a $500/month payment. You can play the numbers in different ways all day long and not arrive at any one answer.

The 20% of income-to-car payment thing was probably derived by the same guy who came up with the equally bogus percent of income to be spent on an engagement ring.

 

yeah I guess there is that 1 months income should be spent on the engagement ring thing that comes up alot.

But mainly I believe you are over thinking this slightly. Just simply think of the budget you have set for your self and answer the thread the best of your ability. Everyone realizes there are variables and different debt ratios.

I spend 5-6% of my monthly on my car payment. Is that an easy way to look at it?

 

I think not.

My budget probably has nothing to do with what yours is. For example, take someone who incorporates into his budget a monthly savings/investment plan. That percent of his income is purely a personal decision...I have friends who save/invest a huge percentage of their monthly income, leaving them little to use on a new car payment. I have other friends who choose to save/invest easily half what the other guys do. They can afford a much higher car payment. They all make about the same amount of money/year.

No.

 

Dock, all I am asking is this? Just wondering what decisions people are making?
This is just a discussion. Please try and not make this into a smart *** comment thread.