income vs. cost of car

[thrtytwo]

This is probably one for the salesmen out there, dunno if the industry keeps statistics on this kind of thing or not.

Been looking at a lot of different cars in different price ranges lately and it got me thinking.

Is there an average rule of thumb for how much people are willing to spend on a car? E.g. 2/3rds of 1 years income?

I realise its totally down to an individual. I'm sure there are millionaires with $30k cars and people who only earn $30k a year in $60k cars.

I dunno if its because of FIFO these days, but you tend to see a lot more regular people driving more expensive cars.

I wonder what the average income is for people with a $25k car, $50k, $75k, $100k

No reason to know this really, just had me thinking :P

[ryanr32]

Definitely see some people and they don't fit the stereotype for the car they are driving. Some may just love a car and cost doesn't come into it for them whether it be 20k or 100k. For your info I work FIFO and spent about 1/3 or a years income on a car

[esky]

I got told by my boss at my first job, that your car should be worth no more then half of your after tax income, other wise you over spending on one item.

Doesn't seem to be to far off really.

[thrtytwo]

For your info I work FIFO and spent about 1/3 or a years income on a car

So did you go with a lambo or a fezza?

[ryanr32]

It's so easy for someone on a fairly average income to be approved for higher end cars with finance because what seems like a relatively large amount or % of income can be spread over 7 years.

[cplagz]

This is probably one for the salesmen out there, dunno if the industry keeps statistics on this kind of thing or not.

Been looking at a lot of different cars in different price ranges lately and it got me thinking.

Is there an average rule of thumb for how much people are willing to spend on a car? E.g. 2/3rds of 1 years income?

I realise its totally down to an individual. I'm sure there are millionaires with $30k cars and people who only earn $30k a year in $60k cars.

I dunno if its because of FIFO these days, but you tend to see a lot more regular people driving more expensive cars.

I wonder what the average income is for people with a $25k car, $50k, $75k, $100k

No reason to know this really, just had me thinking :P

Buy what you can afford. I wouldn't feel comfortable financing any more then 30% of any new vehicle cost, and I would only do that as a last resort option. Whilst it might not be the best use of funds, I'd rather pay cash and know that I own it outright and the banks can get fucked!

[ryanr32]

So did you go with a lambo or a fezza?

1 for each day of my R&R

[Damo 69]

3.4% of my yearly income with the skyline (not saying i am baller, just it was cheap :) )

[ryanr32]

Buy what you can afford. I wouldn't feel comfortable financing any more then 30% of any new vehicle cost, and I would only do that as a last resort option. Whilst it might not be the best use of funds, I'd rather pay cash and know that I own it outright and the banks can get fucked!

I would rather the cash on my mortgage than on a car. Long term it is a much better option.

[Brockas]

I'd say that car enthusiasts will generally spend a larger proportion on their cars than what is 'usual'. For example, I'd rather have a nicer car, than a nicer house, but that's just me.

IMO spending anything over what you earn in 1 year after tax is excessive.

If you clear $100k a year after tax, limit yourself to a $100k car.


I would rather the cash on my mortgage than on a car. Long term it is a much better option.

Of course it's a much smarter financial decision, but not everything is about saving money. You can't drive a house!

In that sense, spending money on ANYTHING other than paying off your mortgage is silly. No going out, no eating at restaurants, nothing other than the necessities. Do we do this? No... we spend money on what we enjoy! If you enjoy cars, stop denying yourself enjoyment and just enjoy life.

I've never heard of anyone on their deathbed saying "Damn.. I really wish I had acquired more shares in my life".

[SimonR32]

I would rather the cash on my mortgage than on a car. Long term it is a much better option.

If you pay the extra on your mortgage equivalent to what you would pay on the car loan you would be a lot better off...

It's just stupid people that put a car on a mortgage and don't pay the extra off that come out worse in life

[Turbo2.6L]

I got told by my boss at my first job, that your car should be worth no more then half of your after tax income, other wise you over spending on one item.

Doesn't seem to be to far off really.

So your take home annual salary is $200k+ then??

FJ + Evo + Volvo + Esky

$50k + $30k + $10k + $10k

[ryanr32]

If you pay the extra on your mortgage equivalent to what you would pay on the car loan you would be a lot better off...

It's just stupid people that put a car on a mortgage and don't pay the extra off that come out worse in life

Yeah I agree, this is more towards what I was trying to say just didn't make myself very clear.

[j3rk]

I would rather the cash on my mortgage than on a car. Long term it is a much better option.
^ Well really it's not. Since you pay 7% or lower on your mortgage, 10%+ on a car loan. So long term it's smarter to pay cash for the car.

Interesting theory though, there was an income thread somewhere, this thread needs a poll to look at results.
Current car is worth just short of 1/2 my after tax income.

[thrtytwo]

Haha I think I preffer brockas thinking so far.

My problem atm is I've always wanted a 34 gtr. But now that I'm on decent coin I'm thinking about getting a cheaper car (xr5) and saving for investment houses.

Im not a total scrooge, I still like to spend. But I want to set myself up.

[ryanr32]

Are we including modifications into the cost of the car or are talking purchase price of the vehicle excluding modifications?

[Chompy]

20% of annual income of buying car
50% of annual income fixing the f@%ing things

[thrtytwo]

Not including mods. That's a cost over time I guess.

[DBLDOSE]

Most I've spent on a car was about 1/3 of my take home pay when I bought my STi.

Saving for an apartment, so still managing to put a decent amount away while living at home with no huge car loan to pay and still having money to spend on anything else I want.

[DRKWRX]

after financing my last car "05 sti" and paying it off for a few years and then breaking even after selling I wouldnt do it again, bought my Patrol outright and in a few years it wont lose much value at all really, compared to paying 900 something a month on the sti for over 2 years and losing it all.

[_S9_]

Price of car vs income is irrelevant.

Follow this timeline for example.

18yo saves up 10k and buys 30k car on 2yr loan (only loaned 20k)
2 years later car is worth 20k and he owns it outright.
20yo then buys 60k car on 3 year loan (only loaned 40k).
3 years later the car is worth 32k and he owns it ouright.
23yo then buys 80k car on 3 year loan (only loaned 48k).
3 years later the car is worth 45k and he owns it outright.
26yo then buys 110k car on 3 year loan (only loaned 65k)

26year old now has a Porsche, its reliable, neat, and he is a baller.

Meanwhile his mate bought a 50k ute at 18, had debt up to his eyeballs for 5years, now 8 years later still has the same old car, its unreliable, modified untastefully, and can't pick up women in it cos it rattles too much.

[DRKWRX]

Price of car vs income is irrelevant.

Follow this timeline for example.

3 years later the car is worth 32k and he owns it ouright.
23yo then buys 80k car on 3 year loan (only loaned 48k).
3 years later the car is worth 45k and he owns it outright.



so he lost 35k in 3 years? plus the intrest?

[thrtytwo]

He would be out $122,900 in interest and depreciation based on 10% interest.

[j3rk]

18yo saves up 10k and buys 30k car on 2yr loan (only loaned 20k)
2 years later car is worth 20k and he owns it outright. - Spent 30k so far + 4k interest
20yo then buys 60k car on 3 year loan (only loaned 40k).
3 years later the car is worth 32k and he owns it ouright. - 70k so far + 12k interest
23yo then buys 80k car on 3 year loan (only loaned 48k).
3 years later the car is worth 45k and he owns it outright. - 118k so far + 14.4k interest
26yo then buys 110k car on 3 year loan (only loaned 65k) - 213.4k spent total in 8 years.

26year old now has a Porsche, its reliable, neat, and he is a baller.

Meanwhile his mate bought a 50k ute at 18, had debt up to his eyeballs for 5years, now 8 years later still has the same old car, its unreliable, modified untastefully, and can't pick up women in it cos it rattles too much. - Assume 80k spent over 8 years to pay off car, he's 130k ahead. Yep your logic is good. Really the first guy was in debt further the whole time... spent more, granted has a 110k car at the end. But the second bloke probably lived well, and has a house. :p Back to topic!

[2jzlux]

My advice from someone who has paid loans like crazy for most of my 20s cash is the only way to buy everything except a house, even if you only drive a shitter.
If you cant afford to pay cash just dont buy it. /responisible oldpingpingpingping mode

[esky]

So your take home annual salary is $200k+ then??

FJ + Evo + Volvo + Esky

$50k + $30k + $10k + $10k

I don't own a car ;)

[thrtytwo]

Yeh I only ever spend cash. House and car is only thing is get in debt for.

[Halle Terry]

I don't have a 'regular' income like everyone else here, but as far as I'm concerned if I can't buy it outright I can't purchase it. Hence selling the car to buy the bike.

I'll only ever take out a loan to buy a house.

That's just me though, who knows if I'll retain the same mindset 5/10/15 years down the track.

[flamo_damo]

Haha I think I preffer brockas thinking so far.

My problem atm is I've always wanted a 34 gtr. But now that I'm on decent coin I'm thinking about getting a cheaper car (xr5) and saving for investment houses.

Im not a total scrooge, I still like to spend. But I want to set myself up.

Buy 34R, enjoy life now.
You only live once...

[stormtrooper]

Of course it's a much smarter financial decision, but not everything is about saving money. You can't drive a house!

You what now? FUCK YOUR HOUSE NIGGA!!!

Image removed, malware warning -fourseven.

[MrSparkle]

I definitely go against the grain here.

Silvia total cost including initial purchase is about 11k. And I drive it about 80% of the time (hilux about 20% when silvia breaks), I love the shit paint, the dents and the rust etc Dudes look at you thinking you are some poor shit yet my last contract gave me a Salary at more than $200k a year.

Long story short, salary vs vehicle cost doesnt mean shit. ie Young guys loaned up to the eyeballs for new ss/xr6t and older guys that dont care driving old silvia/r31/jzx70/wrx/starion because they liked them or had one when they were younger or whatever.

Priorities change as you get older and generally speaking you earn more then too. Like thrtytwo said, rather pay off houses than drive baller car.

[newbie101]

You what now? FUCK YOUR HOUSE NIGGA!!!

Image removed, malware warning -fourseven.


That ^ is pure sex

sooo much want, I would go into epic debt for that.


Besides, I always thought the full saying was

"You can sleep in a car, but you cant race a house"

[thrtytwo]

Buy 34R, enjoy life now.
You only live once...

Very true. I always say you could die tomorrow.

But by the time I buy and mod it I know I'm Gunna spend $100k haha.

[volt_bite]

You may only live once, but unless you want to live in destitute from 30yrs onwards you have to put some aside for a house.

Balance is the key, just like weight distribution ;)

[flamo_damo]

Very true. I always say you could die tomorrow.

But by the time I buy and mod it I know I'm Gunna spend $100k haha.

Yeah but you can always make more money, you can't buy time nor go back in time.

Food for thought.

[DISTRBD]

you can't buy time nor go back in time.

Food for thought.

You saying that back to the future was all a lie :/

[Halle Terry]

I'm all for having fun and experiencing and enjoying life - but I don't want to do so at the cost of chaining me down to something.

As volt said, it's about balance.

[thrtytwo]

Justin Timberlake did

[volt_bite]

Yeah but you can always make more money, you can't buy time nor go back in time.

Food for thought.

Time is money, your argument is invalid haha.

Food also costs money, so you cannot think about it if you dont have food, which requires money, which requires time.

IF you have money (granted enough money) you can buy other people's time. Hence, money>time.

[volt_bite]

Someone once told me that its not about how much you earn, but about how much you can keep in your pocket. This is in relation to saving, ways to reduce tax, (ie not getting a married then divorce or having kids).

You don't need a lot of money, but if you can invest it wisely (either through buying car/house/holiday) then you can maximise your well-being over a longer period of time. This is contrast of course to the "live fast die young" philosophy.

[flamo_damo]

Time is money, your argument is invalid haha.

Food also costs money, so you cannot think about it if you dont have food, which requires money, which requires time.

IF you have money (granted enough money) you can buy other people's time. Hence, money>time.

Touché haha

Not telling the guy to spend all his money on a 34R, but doesn't seem like he is struggling nor would be a struggle to own one.

I completely agree with you, balance is key.

[volt_bite]

I think it also comes down to the standard of living that is acceptable to you at the time.

We have all been there (or heard of others) who have lived off 2 min noodles only to buy a $300 Defi gauge because race car.

[thrtytwo]

FWIW I'm pretty balanced. No credit card. In the last two years I went to europe for 6 weeks, spent $7k on camera gear. Put 10g's in a term deposit. Put a deposit on a house. And still have cash in the bank. All whilst being an apprentice. I work long hours to get what ive got though.

Now I'm a tradie and money's good haha.

The key is to not piss money away, don't buy shit you dont need. and dont buy it if you don't have the cash.

But don't buy nothing and be a scrooge for the sake of a few dollars :P

[skidkid]

I say fuck it, I'm young and want to enjoy my 20's, so I spend an easy 60-70% of income on cars, and the rest on petrol.

[stumps.]

There is some crazy talk in this thread. Each to their own. I presume a lot of the people on here who are looking at bullshit loans for cars live at home?

[thrtytwo]

Yeh that's one thing I didn't want to do personally. Get a loan for a fancy car while I still lived at home. Doesn't feel right to me. Just my opinion though.

[Fukushima]

if I had my time over I probably would have put the 10k cash I had into buying a 32 instead of financing an s15 (that cost roughly half my take home pay at the time)

but since 2009 I've managed to get 2 years ahead on the car loan, break and replace the driveline in the car, go overseas every year, get married and buy a house so it isn't the end of the world

[volt_bite]

It'll probably make more sense once you have your own kids and they spend all their money on cars, while they wait for you to die so they can get their inheritance.

[ForgedV6]

Ive only ever paid cash for items i want/need and the Mrs is the same luckily. My only loan so far has been the investiment house in 2008. Soon to be another loan for a house with the Mrs. We have saved a suitable amount over the last 7 years for a significant deposit on house whilst still enjoying the finer things in life. Eating out, week ends away, overseas travel, cars etc etc. We can still continue those things once the house is purchased which imo is a really good position.

I like this saying;

YOU DONT WANT TO BE THE RICHEST PERSON IN THE CEMETERY

[yeahlow34]

LOL at buying a house as being the way to "set your life up".

I know heaps of people on $150k+ wages who still rent. They invest money they'd otherwise tie up in a mortgage, and get a return of 15-20%p.a.

All drive baller cars, and live in baller houses. They just don't "own" the houses. The losses on buying new cars, or on purchasing needless shit is covered by their return on investment.

Horses for courses.

[stormtrooper]

if I had my time over I probably would have put the 10k cash I had into buying a 32 instead of financing an s15 (that cost roughly half my take home pay at the time)

but since 2009 I've managed to get 2 years ahead on the car loan, break and replace the driveline in the car, go overseas every year, get married and buy a house so it isn't the end of the world

You're not married yet pingpingpingping, it just feels like you have been for a few years :D

[thrtytwo]

Where can I get 15-20% p.a. ? Hook a brother up haha.

I don't plan on smashing my mortgage. Rather put my cash in an offset account and save deposit for next house. If your good with your money it doesn't make much difference. Paying a mortgage is basically only forced savings.

Shares take too much work to make decent money out of, I think. Only my perception. Never bought any yet. Although I have a commsec account.

Houses to me are just an easy option. You don't have to manage shit. If I knew a better way to make money in the long term I would to that.

I'm hoping to build/buy an investment every two years. So if there was a better option id be all for it.

[volt_bite]

THe purpose of buying a house, in a majority of cases is reduce taxable income. There is no tax benefit from renting.

If you own your own house, you can get access to the main residence exemption on the (hopefully) gain on sale.

If you own an investment house, you can get a deduction on the interest and still get access to the 50% CGT discount on capital appreciation.

In your "heaps of people" case, chances are they are highly attuned people in the finance sector who are able to invest wisely in stocks (or whatever invesmtent) to make a larger rate on return. Still, this carries more risk then owning a house (after all risk is in correlation to return) and is harder to implement since a sound knowledge of investments/finance is required.

The point being, a car is depreciating asset, the value drops sharply upon purchase and resale values are usually around 50-60% after three years. Notwithstanding we still want to enjoy life by purchasing the things we like. Modifying cars is even worse since modifications are generally worth fuckall, if not less than unmolested examples.

[stormtrooper]

White Flour wasn't the only "white powder" he was selling ...........

[mod]

bought my first car under parents "interest free" loan and then work hard decided again going to uni(1st mistake) saved up 3/4 of the amount of the car and bought my 2005 STI when I was 19 which was roughly $40k
paid that off within 1 years and only every spend 2-3k on the car per year.

Now that I'm earning pretty reasonable cash for what qual I have, all money goes towards the house IMHO I'd rather have 2-3 investment houses and have something for the future than a baller car but Im keen to sell my car for a latest C63 AMG :D...
all my saving on a baller car or a huge down payment for a house

[Buckets]

The other thing people are forgetting here is leasing cars rather than outright purchase. A while ago I leased a car that to purchase would have been around 70% of my take home $$$ (200 Series Landcruiser TDV8). It has it's advantages (tax and basically fixed running costs) in certain circumstances and other than the car not working very often leasing suited where I was at and my vehicle needs at the time but. It by no means does it suit everyone in every situation. As a few people on here know I currently roll around in a little old Honda Accord I bought off a family member outright when I got my licence and aside from the LC 200 I've never had a car I've not bought outright.

I've really got no option but to borrow to get my next car but the thought of going in with out a deposit really isn't even something I would consider. By all mean by a car worth whatever but the repayments in my opinion should not be anymore than 30%-35% of your net income per month ever.

[ossie_21]

When I got my first 33, a guy at work told me I should look into buying a unit around the Wembley area instead, to rent out to uni students. That's back when the prices of places would have been well under 200k. In hindsight, I probably should have. But then on the other hand I probably wouldn't have met some of the mates I have & the fun I've had, so no regrets

These days with crack pipe property prices, it's unpracticle for me to buy a property until I start earning over a grand a week easily cleared (by myself that is). I seen a bit of land for sale in the Noranda area, not too shabby of an area but not exactly prime location, and it was over 400k. Fuck ya! Ideally, I just want an apartment or townhouse sort of thing, but that won't happen for at least 5 years

[Torquen]

I'd spend 1 years after tax income on a car.

[Fryman]

I'd spend 1 years after tax income on a car.

have done so and no regrets...

current situation is a whole different quality of life. You can replace time with other peoples time, but you cannot replace your youth

poor but beautiful

[volt_bite]

Replace your youth by dating younger women, it all works out haha.

[thrtytwo]

I'd spend 1 years after tax income on a car.

cash or loan? or part/part

[200MPH]

Depends on you stage in life and circumstances like has been said before. I had a stage in life some 6 years back where I decided to go hard building a car from scratch and dumped many dollars and weekends into it. Because I had a fair idea that my circumstances then wouldn't last forever. Single, house mortgage well under control and good income. But couldn't do that now with wife, bub and bigger mortgage. The good news is you can dump decent coin into a car, providing you get the right one, and you will not loose much money, perhaps even make some. But that's pretty rare and you have to be disciplined and look at the car as a sort of investment. Mine is not really an investment, but it is worth most of what I've spent on it. So worst comes to worst and I need a big cash hit, I just need to find a buyer and I get most of my spendings back.

As for daily drivers, I've always gone cash and no more than 10k. Hard to justify having massive depreciation & loan interest on a daily when racing is far more fun (& expensive)!

[Sleepy]

http://www.abc.net.au/news/image/654502-3x2-940x627.jpg

[Fozzy]

Oh so we are deleting other peoples posts now..

I dont like that you were right.. Im a mod. Must delete post.

[fourseven]

I deleted it. What's your problem?

[EVLO]

I deleted it. What's your problem?

http://img.photobucket.com/albums/v245/savageparrot/ethug.jpg

[fourseven]

LOL that's rich.

I've got no problem telling you you're a pingpingpingping in person champ. Just leave the shit stirring for another thread/forum.

[stumps.]

Whilst I missed the post that caused everything to get deleted, I can imagine what it said. This forum is all about calling people out and asking for an explanation. If you are making bold calls and people ask shouldn't they answer?

Whilst they are bold calls, with bulk savings (it would have had to of been BULK) i'm sure it is achievable and maybe some good advice for the younger members.

I hope the questions and answers come back.

[Joe]

Thats what I thought.. but to no avail.

I'm not willing to share anything else with anyone, but if anyone wants to find out specifics, please PM me.

[Fozzy]

Im sorry.. Keep the shit stirring to another a forum.

This is antilag.. But I guess you have to be a mod or admin and have the shit stirring meet your own personal agenda for it to be allowed.

[ben351]

I missed it ... what happened ... and why did my post get deleted ??

Bunch of poofs.

[fourseven]

Fucking tough guys everywhere today.



Im sorry.. Keep the shit stirring to another a forum.

This is antilag.. But I guess you have to be a mod or admin and have the shit stirring meet your own personal agenda for it to be allowed.

LOL funny you mention agendas. Your post contributed nothing to the thread just like you contribute nothing to this forum. If you've got a problem go grab a box of tissues and PM Brockas. You can have a big cry to him about how repressive mods can be when they don't want to continue to read your dribble.

Ben351, I didn't see your post and I didn't delete it. The first thing I saw when I opened this thread was this muppet and his mate trying to turn a serious thread into another shit thread.

[TJ]

Im sorry.. Keep the shit stirring to another a forum.

This is antilag.. But I guess you have to be a mod or admin and have the shit stirring meet your own personal agenda for it to be allowed.

The irony in this is incredible considering you helped start an elitist secret forum so you could give people shit behind their backs.

Back on topic, posts will be deleted and users banned, dont care if you think I am being an internet tough pingpingpingping or whatever.

[jmp]

The irony in this is incredible considering you helped start an elitist secret forum so you could give people shit behind their backs.


So.... what is dbr?

[Brockas]

So much arguil.

pingpingpingpings need to lighten up and not take life so fucking seriously.

[Azrian]

At the end of the day its only money.

http://t0.gstatic.com/images?q=tbn:ANd9GcSauce9Lb8hTrxmW-rrdBNJo087pwB8N_nPTFYamlHLnPtxwBlI

[EVLO]

Fozzy had them 3 letters in his user title before he had banned , wait for him to reply .

You'll be waiting a while, the ban stick was waved...

[stumps.]

The irony in this is incredible considering you helped start an elitist secret forum so you could give people shit behind their backs.

Double irony?

[Turbo2.6L]

LOL @ all the arguil! pingpingpingpings need to give each other fly kisses & stop acting like gays :)



LOL at buying a house as being the way to "set your life up".

I know heaps of people on $150k+ wages who still rent. They invest money they'd otherwise tie up in a mortgage, and get a return of 15-20%p.a.

All drive baller cars, and live in baller houses. They just don't "own" the houses. The losses on buying new cars, or on purchasing needless shit is covered by their return on investment.

Horses for courses.

Yea, because there's no risk in pouring all your cash into the stock market...
Property investment also carries inherant risks, but nowhere near as much as the stock market. I know where my hard earned has been/will be going!

[DISTRBD]

. I know where my hard earned has been/will be going!

Shoes or more gold :P

[Turbo2.6L]

Shoes, no... Gold, another solid investment alongside houses :p

[volt_bite]

Watches.

[esky]

Thongs and more gold.

[Brockas]

Spend money on drinks for pingpingpingpings!

[18:43] <tj> i spent 750 dollars last night on drinks for pingpingpingpings
[18:43] <tj> for some stupid whore to fucking come up to me and go off at me etc
[18:43] <tj> for not buying her one
[18:43] <tj> ruined my whole night

[stormtrooper]

First world problems :D

[JBAE]

Useless fucks...

Im going to the CAS to make my millions! You Niggas are lacking! Sheettttt some of you fucks sound like yo asses may be lactating!

Suck some dick and get over it! Invest in LOLs and Guns!
Buy a TJ

[Gonzola]

Tough question with a lot of ways to look at it.

If you're buying without debt then you could spend as much as you like. Long term costs of debt, as above, can be fkn massive unless you're paying it off hard and fast.

I earn 'quite a lot' but not insane coin and I overspend big time on cars, but at the same time i look like a bum pingpingpingping who earns 50c a week with shit clothes and holes in my shoes, literally.

Priorities come in to it :)

[BIGS]

Interesting question and one I've been considering a lot lately. I'm about to become a credit rep so I figure I'll have a better grasp on it than lol. Was a time I'd sacrifice everything for a car.