I realise the occupants of this place may have a predictable response to this question but what would you consider is an acceptable amount, as a proportion of gross income, to spend on a car.

A car that I’ve lusted after for a while has recently fallen in value enough so that my gross income and its cost are at a ratio of 1:1 I.E one year’s gross income could buy me a decent example of car X not taking into account cost of finance etc.

I can’t quite convince myself either way.

There’s no answer to this. It’s just what’s acceptable to you, basically.

Lol mine is worth 1% of my salary. If I upgrade it it may be 4%

The most expensive car I have ever had was 33% of my income. Don’t think I could ever bring myself to spend more than that.

I don’t think I’ve ever gone over 1/3rd.

My current car was free 🙂

Nothing is ‘unacceptable’ its up to you to decide whether its money well spent. Although there are other people to consider if it means your wife leaves your or your kids go hungry. Whats paying the bills and keeping a roof over your head if you’ve spent 100% of your income on a car?

0.33 – 0.5 would be about all I’m willing to pay, and that would be the total price before any sort of PCP deal.

There’s no way I’d spend a year’s gross salary in cash on a car

My first car (as a teenager, loved cars so had been saving for some years) sold for more than I bought it for
Second car (prior to first graduate job): 1 month gross salary
Third and current car: 3 months gross salary

Wasn’t there a thread a few months back about expensive cars outside average houses?

I’m sure it didn’t end well.

Mine is 1.8% of my salary

It’s irrelevant, what matters is whether you can afford it.
If you’re on (say) 30k and you can afford 30k on a car (whether it’s full or part finance/ or cash) what matters is whether you can afford to lay it out, or the monthly repayment.
There’s no point having a really nice car that you can’t afford to drive for example, or one that you don’t drive because replacing a punctured tyre would cause financial worry.
Be realistic about it.
About 33% is the max I’ve done, but i had it in cash so no repayment to make.

Our current car was 1/12th of our annual income (we’re a 1 car family). The one before that was 1/4 of just my income.

As you can likely guess, I either earn shed loads or I don’t spend money on cars, and I sure as hell don’t earn much.

But as above, it’s up to you how much you slender but 1:1 wouldn’t sit well with me.

Good question, no right answer. Got me thinking though, when I was younger, my first car – s/h – would have been maybe 1/3 of my salary (can’t recall details). Worked up through the ranks at work and in cars until ended up with one that must have been closer to the 1:1 ratio. Once that got stolen I worked my way back down the s/h car rankings again, now with a firmly s/h Skoda although with much less earnings than before.

26%

Personally, I think your mental to consider that kind of financial situation.
However, is it likely to go back up in value? How often would you drive it? How much is servicing and parts?
If you can afford it then absolutely go for it, but looking at your first post 1:1 puts the absolute frighteners up me as it is just a tool (irrespective of what it actually is).

I’d say it depends on many factors.

Single or part of a couple. Living at home? Saving for a deposit for a house, paying a mortgage? Are you lower income with a need for a reliable car to get to work? Are you risk averse to running costs?

And most importantly are you ‘into’ cars? Would owning/running/driving a car be a thing/hobby for you or a status symbol only? I could we imagine a nice car that you took to track days, took to car meets, went on driving holidays making sense if it was work a little more.

For me in a middle aged house with 2 professional incomes and embarrassingly low bills but a desire to change lifestyle sooner rather than later and more than a eye to saving but still likes cars I would say about a third of the gross of one of us would be the max I would pay. Can’t imagine ever wanting to spend 1:1. There would always be better things to spend on. When I was younger on a smaller income I suspect the fraction might creep up more by necessity than desire.

How modest is your house?

Most I’ve spent (apart from the time I cashed in a share bonus) was 30% – but taking into account the trade-in of the old car, about 25%.

Would I buy one for equivalent of a year’s gross? Hell no.

A years wages on a car….I wouldnt but then I dont like cars much!

Most have been a week or two’s pay, current one is by far the most expensive I’ve ever had, three months pay! Really struggled to justify that.
Most on a bike was nine months…

Good question, tricky to pinpoint an agreeable answer.

If you are talking about %financed (loan or pcp or lease) that’s pretty easy to quantify… if it’s total value then I don’t really consider that at all.

1.45% of monthly income

My last car (not new) was 25% of my salary at the time of purchase and I got 65% back when it got written off 4 years and 60K miles later. My current car (also not new) was 33% of my salary at the time of purchase. Both were financed with bank loans rather than bought out right. I’m hoping my current car will last until I can afford to go full electric.

Hmm it’s what your comfortable with, I know people who have cars that are close to their annual. Just check current car is 1.6% of gross annual. So not much, but only drive to work in it.
I like cars, but at the min like having no debt more.
One Min I want a Nissan leaf next something load and daft.

My car I use for work which I get allowance for is about 25% of my income but it’s on lease so not really applicable. The one I own for family use is 10% of my income and the wife’s is prob 33% of hers.

No rules if you want a nice car get one but not sure what it’ll do better than a cheaper one ?

My 3 series Touring was about 90% of my income when I bought it (cash) for £22k back in 2005. It was 14 months old. I still have it.

Mine is currently 39% and is the most expensive car I’ve ever had. Nothing special mind, I just don’t get paid very much.

I would buy a Transporter camper though, which would be 100%+ but I’d never pay in full for one, it would have to be some kind of pcp deal.

Generally less than 20% and the one before my current car lasted me 14 years so just over 1% per annum.

Impossible to answer really but it depends on what you are comfortable with really and what is financially prudent. How much debt you have, how much expendable income you have etc…

Personally I wouldn’t spend a large proportion of my income on a car (or cars). No more than 10% for me.

Mine’s apparently 16% of my gross annual salary. But I plan to keep it at least 4 years so 4% per year and it’s paid for.

It’s up to you though how much you want to spend, if you can afford it go for it.

And total value isn’t really the factor, it’s depreciation over the time you expect to keep it for i.e. how much will it cost you per year to own it.

Even though it’s how I make a living I spend as little as I can on cars but still have something that does the job.
But I know some people who to them their car is everything. They often live in modest houses and have a car thats worth nearly as much, it’s not for me but it’s their choice, nothing right or wrong about it.

I would go with whatever you want.
Mine, brought outright, was about 15% of income. Already had it for four years and may well keep it for several more although having to weigh it up against one with a decent roof rack for kayak.
For me driving is purely convenient transport though and I often throw wet/muddy/things with sharp bits in the boot/backseat so I would be too paranoid to buy anything nicer.
I had the last car for ages and only binned it off when I decided the gamble of the yearly repairs wasnt worth it. Easier to throw cash down on a three year old car which had already nicely depreciated but not fallen to bits and then forget about it for a while.

When I was earning good money and it was needed for work I spent 10% of my take home (after tax).

Current one is 14%, new one will be 45%, planning on keeping it for ages though.

However, the monthly cost with fuel/tax/loan is only £120 more between the 2 cars…

Hmmm, my last proper vehicle purchase was 3 times my taxable income. Being a 10 year old van this reflects more on how little I earn* than how much it cost 🙂
Saying that, I did buy a car in between that I have been running for 2 years now for local trips and that cost less than a days wages when I work off the farm. In fact probably less than some STW members earn in an hour.

*And how sensible it is to pay an accountant to do your tax returns

My current bangernoms has seen me hit the heady heights of 5%

Currently, 2.4%.
At least 2 previous cars 0.00000000%.
Highest at 15%
1st car 7%

Edit. Of annual gross.

Mine was 1.5% of annual gross. Mind you, it was a VERY cheap car, and it’s about to cost some money to keep going; fifth gear appears to have disappeared today 🙄, and it’s got a cracked windscreen which between them is going to cost over half the original purchase price. Have decided to stick rather than twist though because it had four new tyres and an exhaust a few months ago. Will do the clutch whilst the gearbox is off.

Mine is about 75% of gross but its a company car so doesn’t really count. If I was paying 25% max

About 15 to 20% of income for me at the mo.

Might be more like 50 to 70% next time though.

the question is wrong. The value of the car is irrelevant – within reason. there are so many different ways you can finance cars these day’s the car you drive doesn’t bear any resemblance to what you earn or your financial status. What mugs actually buy cars these days? They’re depreciating assets…why would you put actual money into a depreciating asset? The overwhelmingly majority of new cars on the road these days are leased or company cars or are under some form of finance arrangement. I read a while back that over 90% of mercs are leased.

So the question you should be asking is how much per month can you afford to attribute to the cost of a car. I reckon I could affordably finance a car that was worth as much as my annual salary. No problem. I wouldn’t stand a chance of purchasing it..I couldn’t afford the deposit for the loan or HP agreement for it…but via other financial mechanism’s I could drive off in one without laying down a penny, or at lease a very modest amount of hundreds of pounds.

If you’re comfortable with the concept of paying an amount per month for access to a car rather than the outdated concept of car ownership then you unlock a whole new level.

What is the car in question?