What's a sensible value for your car vs annual income?
Poll: What's a sensible value for your car vs annual income?
Total Members Polled: 236
Discussion
Assuming we're pretty much all out to get the best car we can afford (all other factors aside), whats a sensible rule of thumb for the value of it, against what we pull in each year?
I personally think its a third of annual income, assuming also a minimum saved cash deposit of 25% the value of the car.
Is there a better/more scientific rule of thumb?
I personally think its a third of annual income, assuming also a minimum saved cash deposit of 25% the value of the car.
Is there a better/more scientific rule of thumb?
Hi
For me I can only go on the basis of all the values of cars and bikes it probably adds up to about 50% of our joint pre tax income. But no individual one being more that about 6% and most being old enough for depreciation to be negligible, and most also owned long enough that the original price is long forgotten.
Wouldn't want to have 20% of my annual income tied up in a rapidly depreciating asset let alone anything more.
All the best
Keith
For me I can only go on the basis of all the values of cars and bikes it probably adds up to about 50% of our joint pre tax income. But no individual one being more that about 6% and most being old enough for depreciation to be negligible, and most also owned long enough that the original price is long forgotten.
Wouldn't want to have 20% of my annual income tied up in a rapidly depreciating asset let alone anything more.
All the best
Keith
Depends if you are a petrolhead or not and if so how much of one you are
I guess it also helps if your wife is a petrol head too.
Seriously, a petrol head is always going to want a better car than someone with an identical salary that thinks of a car just as a means of getting from A to B
For me my cars and bike are my life. Nearly all our friends are from meeting people via the car or bikes and every year one of our favourite holidays is a blast in the Alps. Yet for others sitting in a car all the way to the Alps would be hell.
Or are you asking how much HP on a car?
I guess it also helps if your wife is a petrol head too.
Seriously, a petrol head is always going to want a better car than someone with an identical salary that thinks of a car just as a means of getting from A to B
For me my cars and bike are my life. Nearly all our friends are from meeting people via the car or bikes and every year one of our favourite holidays is a blast in the Alps. Yet for others sitting in a car all the way to the Alps would be hell.
Or are you asking how much HP on a car?
However much you can afford to spend after all the essentials have been covered, which may vary hugely subject to mortgage vs. property value, lifestyle and children etc.
So I don't think there's a single universally applicable "sensible" %age that works for all people in all possible situations. As long as you're not living on beans and toast at your parents' home to fund a Ferrari on the driveway as it were, do what you wish. Even then, it's your choice and prerogative to do so anyway, not mine.
Our own total value of cars vs. other outgoings, debts, investments and assets have changed as my work and income situations have changed. Having worked out how much better off we were overall by not having big lumps tied up in cars, either in cash or as debt at various times, we now have more to spend on other areas of life that are a bit more important/sensible.
So I don't think there's a single universally applicable "sensible" %age that works for all people in all possible situations. As long as you're not living on beans and toast at your parents' home to fund a Ferrari on the driveway as it were, do what you wish. Even then, it's your choice and prerogative to do so anyway, not mine.
Our own total value of cars vs. other outgoings, debts, investments and assets have changed as my work and income situations have changed. Having worked out how much better off we were overall by not having big lumps tied up in cars, either in cash or as debt at various times, we now have more to spend on other areas of life that are a bit more important/sensible.
It's a real piece of spring question. If you found mint examples of my two toys for sale at a high priced dealership their combined value wouldn't be that far off my entire yearly salary! That's thanks largely to having a much better paid career previously, but also partly due to the fact I don't have kids I don't have a mortgage.
I suppose if I started with nothing in the bank and didn't anticipate any significant pay increases I probably wouldn't spend more than about a quarter of my income on a car.
I suppose if I started with nothing in the bank and didn't anticipate any significant pay increases I probably wouldn't spend more than about a quarter of my income on a car.
Edited by Chris71 on Monday 21st November 15:37
Reardy Mister said:
Assuming we're pretty much all out to get the best car we can afford (all other factors aside)
I'm an exception to this rule. I reckon I'm about as much of a petrolhead as the next PHer, but I'm also a big believer in diminishing returns. Why spend big money when so many riches are available for practically peanuts? For me a 10k car would give 98% of the pleasure of a 50k car, and a 5k car gives 95% of the pleasure, and that's a compromise I'm willing to accept.plenty said:
I'm an exception to this rule. I reckon I'm about as much of a petrolhead as the next PHer, but I'm also a big believer in diminishing returns. Why spend big money when so many riches are available for practically peanuts? For me a 10k car would give 98% of the pleasure of a 50k car, and a 5k car gives 95% of the pleasure, and that's a compromise I'm willing to accept.
True. I think that's also why you get so many 'what XYZ for £15k?' type threads. You reach a point where every genre is covered from super saloons to stripped out track day cars and the decision to pay more becomes a choice rather than a necesity. 
d too.
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