How much of your NET income should you spend on a car?

[maxtdi]

Curious to see what people think...
Seems like some are willing to drop 50% of their net incomes (After taxes) on a car expenses (payments, gas insurance etc)

So say you take home $5000 a month after tax...
is $1000 a month reasonable?

Hmm I am having a tough time clearing the 10% hurdle I suppose I am no longer a car enthusiast and too much of a penny pincher.

 

[troyguitar]

What is "should"? For most posters here, car spending is a combination of one part necessary transportation and one part pure entertainment. Are you looking for us to put a dollar value on our entertainment?

 

[maxtdi]

What is "should"? For most posters here, car spending is a combination of one part necessary transportation and one part pure entertainment. Are you looking for us to put a dollar value on our entertainment?

Yep

 

[rawbdog]

i spend 20%

 

[maxtdi]

i spend 20%

All in? diesel/insurance/payment?

 

[colslaw87]

I spend ~20% on car+ins.

 

[rawbdog]

All in? diesel/insurance/payment?

OOHHHHH!!! well if you want to include my 150% increase in car insurance, i would have to say that my monthly bills to the TDI are about almost 50% then. including gas.

 

[maxtdi]

OOHHHHH!!! well if you want to include my 150% increase in car insurance, i would have to say that my monthly bills to the TDI are about almost 50% then. including gas.

Holy balls

 

[NYCSuits]

I spend between 10-20% depending on the month, deals on the classifieds I come across etc., so it varies for me. Seeing as how I'm 22, not married (hopefully the gf isn't looking for a ring anytime soon), this is the first car I've gotten with my own money and I want to spend my money on my car because I've been waiting to this since I was a little kid.

 

[thedude4bides]

This is flawed in that I can pay less per month by taking out a longer loan at a higher interest rate, effectively "spending" more for the car than I should just to clear an imaginary monthly budget hurdle of 10%.

You have demonstrated that you know this but I'm just saying there are many levers to pull that could satisfy your 10% threshold, but are not too savvy in the long run.

This is really about being an enthuisiast and valuing entertainment. Sounds like you are growing up

I'm currently at about 15% including mods, gas, insurance, but not depreciation.

 

[rawbdog]

Holy balls

yeah good thing my parents only charge $250 for rent haha. some how i still manage to stay afloat though.

 

[troyguitar]

Well I live 2.3 miles from work, so I guess from a practical standpoint I "should" spend precisely ZERO dollars and walk/bike.

But I have very few other expenses, extremely cheap hobbies, no family to support, and almost never go out and spend money at bars/restaurants/whatever - this means that I can spend what most people would consider an insane percentage of income on car-related crap (I am including track days and parts as part of the cost of the car, not just payment+insurance+gas). Up to 60% would be completely comfortable for me.

So my answer for myself is 0-60%... my general answer for others is 0 to whatever you can afford.

 

[maxtdi]

This is really about being an enthuisiast and valuing entertainment. Sounds like you are growing up

I'm currently at about 15% including mods, gas, insurance, but not depreciation.

I don't wanna grow up

I don't have a car payment, and I pay $60 in gas and another $60 in insurance ... so $120 a month. But yea actual expenses are in fact higher esp considering depreciation... I figured I'd keep it simple and include car payment only because most folks don't seem to understand how much their car actually depreciated over time.

 

[troyguitar]

haha no car payment does not mean you spend zero. Take the amount you spent in total on the car and divide by the number of months you have owned it. Yes that number will decrease a little each month but it will never be zero.

 

[maxtdi]

haha no car payment does not mean you spend zero. Take the amount you spent in total on the car and divide by the number of months you have owned it. Yes that number will decrease a little each month but it will never be zero.

Correct, according to my calculations the golf is costing ~380 a month all in.

And that's far less than the 10% for me as well... but any other car I am considering will break 1k a month in expenses, which seems silly to spend on a car