Auto loan as % of income

[veuxx]

Where do you guys fall?

I would be around 18%, I think I should really be patient and save to get a larger down payment but I'm growing impatient. This car looks amazing.

What do you guys recommend?

[Gen]

Originally Posted by veuxx

Where do you guys fall?

I would be around 18%, I think I should really be patient and save to get a larger down payment but I'm growing impatient. This car looks amazing.

What do you guys recommend?

As a percent of income? I would think anything over 10% of net would be excessive on a 5 yr loan. I'm not really sure it's a smart decision to purchase any new car if you don't have the means to pay cash (not that you necessarily SHOULD pay cash), but I definitely do understand.

[SportInjected]

Do you mean the total amount that one will have to pay over the term of the loan, versus the total amount he/she will earn during that time (in percentage form)?

[FRkane]

On a risky side, I would think putting down enough in a emergency event of needing to part ways with the payment. You should put down enough to be able to sell it immediately.. Yes, you would lose all of that down payment in that event, but thats always better then having the car repoed and destroying your credit. I could see these car holding their value pretty well though.

[niharG]

A rule of thumb I've heard is that no more than 25% of your POST-TAX monthly income should go towards your vehicle. This includes the loan, insurance, and gas (est). Of course, this is not a one-size-fits-all statement, just a generic rule that doesn't account for your other life expenses. I have seen this paired with another rule of thumb that states not to spend more than 30% of your post-tax monthly income on rent, for example.

Personally I'm at 23% of post-tax monthly income on a 4-year loan with 5K down and it's not a problem at all. Again, these statements mean nothing unless you look at your own finances & budget and see what you can afford.

[rice_classic]

10%

[BlaineWasHere]

Originally Posted by rice_classic

10%

Mine's about 9.8%, let's round that up to an even 10.

[ashtray]

It's more about disposable income. If you make $8/hr, but live in your parents' basement rent free, and have no goals to ever leave, spend it all on your car if you want. If you make $1M/yr, but have 4 houses, alimony and child support to multiple people, and don't have $5 at the end of the month to put in savings, you can't afford this car.

It's all about your comfort level too - but there reaches a point where the price of a new car outweighs its benefit to you. The FRS/BRZ twins are affordable, but still 2-4x the price of a decent used car.

[Nepenthe]

Traded in my Si, wrote a check for the rest. Should get the title soon. Did the same thing on my Si. Only thing I've ever bought on credit is my house and I plan to have that paid off 24 years early.

[#87]

Well according to Subaru marketing the target demographic of the BRZ makes approximately 90k a year so that would put it at about 30%

But it's useless to talk about this type of thing on the internet because everyone is an expert and thus no conclusion can be reached ^_^

[blu_]

^ I make a billion dollars a month, but just drive a BRZ because I don't like conspicuous consumption.

[bimmerboy]

It all depends on your personal situation. As a rule of thumb, try to figure out what your minimum monthly payment is going to be, and then see if you can afford paying an extra $100-200/month. This will help act as a "buffer" as well as force you to pay extra each month which will help you save on interest.

So say you can really afford around $600/month for a car, try getting your financed payments around $400 and then each month pay extra towards your loan.

[Nepenthe]

Originally Posted by #87

Well according to Subaru marketing the target demographic of the BRZ makes approximately 90k a year so that would put it at about 30%

I made $82K last year so I'm right in there. With low expenses, no debt other than the house, and no kids, it just didn't make sense to finance.

[Hix]

Originally Posted by #87

Well according to Subaru marketing the target demographic of the BRZ makes approximately 90k a year so that would put it at about 30%

But it's useless to talk about this type of thing on the internet because everyone is an expert and thus no conclusion can be reached ^_^

I believe it. Everyone I have really seen locally with the car (FR-S at least, no local BRZs) has something much greater in the garage. There is a sales guy in Helios with a Koenigsegg Agera R that I could swear I saw leaving the garage in a white FR-S. Out of the many I have seen I have not seen anyone without grey hair driving it.