Cost of car as % of salary

[gbbird]

I appreciate there are potentially lots of factors at play here, but i was just wondering if there is any rule of thumb PHers follow as to how much one should fork out on a car in relation to their annual salary? For example, i am thinking of purchasing a car which costs roughly the same as a years salary for me. Would this be pushing it?

G

[Jasandjules]

Been there, done that.... If you've saved enough money so that you can pay say half the car off then borrow the remainder over 3-5 years then it is, IME, perfectly do-able.

It also depends on if you have a house, any other cars etc..

[andy-xr]

Also been there done that and walked away wounded a little from a PCP. Mine was more than my mortgage p/m, really wasnt worth the expense for a car that wasnt mine

[ALawson]

I think I read 40% somewhere but as said above all depends upon how much spare cash you have a month (every month) and the initial down payment.

Edited by ALawson on Sunday 8th March 08:37

[anonymous-user]

About 15% gross, maybe I could use this to persuade the better half thats its time for an upgrade!

[Swilly]

Taking a broad brush account of all other expenses and a comfort zone i would say 10% of your earnings after tax per month.

Obviously the bigger the initial deposit you have the better the car you could afford.

[Dr Jekyll]

As much as you can find without resorting to finance perhaps?

[Colonial]

Dr Jekyll said:

As much as you can find without resorting to finance perhaps?

I have no problems using affordable finance.

The interest on my repayments was lower than what I had my money invested at (locked in) so seemed like a no brainer to me.