If you make the executive decision to take on a car payment, what percentage of your take home pay should the payment be?

I've read that in order to properly budget yourself, your payment plus insurance should be no more than one weeks take home pay.

Others say that is way too much, that it all should be 10% of take home, tops.

It also depends on how much your rent or house payment is.

And for how many months? They can stretch loans out to 96 months these days.

there is no rule of thumb. if you are trying to build wealth, buy the cheapest reliable used car that your ego can stomach.

The Millionaire Next Door

1. They live well below their means.
2. They allocate their time, energy, and money efficiently, in ways conducive to building wealth.
3. They believe that financial independence is much more important than displaying high social status.
4. They do not chase status symbols.
5. They minimize their realized (taxable) income and short-term capital gains and investment costs and they maximize their unrealized income and long-term capital gains. (Tax-Free Money Market Funds, Tax-Free Bond Funds, Tax-Efficient, Low Cost, Diversified Stock Index Mutual Funds, and Retirement Accounts).
6. They systematically “pay themselves first”.
7. They chose the right occupation.
8. Their parents do/did not provide economic outpatient care.
9. Their adult children are economically self-sufficient.
10. They are proficient in targeting marketing opportunities.
11. They buy their cars and drive them for a long time. They believe that you AREN’T what you drive.
12. They never purchase a home that requires a mortgage that is more than twice their household’s total annual realized income.
13. They are their own favorite charity.
14. They pay cash and avoid debt.

Fuk it, you're gonna be broke your entire life, go for 1 weeks paycheck for the car paymentWhat about this dude's questions made you think he's going to build wealth?

lol come on bro

30% limit of your monthly take-home for rent + utilities

10% limit of your monthly take-home for car payment

0%
If you can’t pay cash you can’t afford it

This is really good advice.

And for guys who think showing off moolah will get them sloots, I disagree. Once you aren't a bum, it's about looks.

If you are unattractive to them, going from 50k to 100k won't make sloots chase you.

My cars value is less than one percent of my annual income, srs

Couldn’t imagine spending a quarter of my income on just payments

Realistically, all of your bills should total no more than 50% of your take home. The standard rule for cars is no more than 10% of your monthly net income. If you can make it 5%, that's even better.

This tbh. I mean, even if you decide to finance for flexibility and to keep a certain amount of cash on hand, look to pay that boi off with the swiftness. Put down a juicy down payment.

Remember, the value of your car is going down. Think about paying interest on something that is depreciating. Just lol

I don't believe you

Either you don't have a running car or you're making close to 500k/year and drive a pos

My rational self would lease a cheap Toyota and invest the rest of the money saved. But, I really really really want the upcoming FORD BRONCO.

geez. what do you do? and what do you make?

There’s a trend being passed out- “if you can’t buy it twice you can’t afford it”

0% srs

Taking on a car payment when you don't need to is financially irresponsible no matter how you look at it

This is true for me as well. If you drive a 20 y/old beater you only have to make low six figures for this to be true.

I purchased my car for under 500 dollars and I have driven it for 5 years so far.

I didn’t say I drive a nice car. My car runs fine.

Disagree. If you can make payments higher than required, monthly and invest your income in other avenues to counter the interest you're paying. You'd be much more financial stable, then just paying one lump sum for a car. Unless of course, your credit sucks and your interest rate is raping you.

Das it mane, repped

You can't buy a car for $500 nowadays

That's scrap metal prices


Car's value is not the same as "purchase price"

Depends if you're a car enthusiast, your savings, and debt. Probably no more than 35%

If we went by the rule book, most folks would be driving crappy $15,000 cars

BRB 60 years old and can finally buy muh C8 Corvette.

Most guys want the car while they're going to bang hot sluts

Should the 10% rule maybe include insurance and everything? 1/3rd of the housing ratio seems like a high number for just the payment tbh

I def don't hate on the guys that go ahead and finance that sports car while they are young. It depends how much it means to you. And yea its pretty cool and you can smash a lot of sloots. But if you lose your job and can no longer make payments, it gets repo'd and you have no savings/investments ...can't complain because it was a decision you made

Lol 1 weeks pay for a payment

Brb lambo time brehs

Never buy new, always pay in full and if you can't do those things..........


If your car payment will be over 200$/month, don't do it.

The average person doesn't live on their own... If you only make 40k you probably need roommates or a partner to split the bills with unless you're going to be very tight with your money and cut corners.

I think the 30% rule for housing costs is applied to gross income actually, not net

That's why I brought up savings and debt. If I can't save $1000/month while financing a new car I can't afford it or say have a rainy day fund of $30k

Or hell you just go used and do tasteful mods. I was just looking at C5 Z06s, but I'd rather Scat Pack Challenger for backseat room

And he is still laughing to this day

You wot?
Brb 25 and I can buy a c8 in cash and still have a lot of money left. Just lol at if you’re not working 24/7