A number of of not buying more then 10% yearly household income for vehicle purchase price was thrown out on Jalopnik. Thoughts?
Jalopnik Financial Suggestion
- Thread starter Andrew1972
- Start date
- Status
Sounds reasonable.
I couldn't buy much of a car.
Originally Posted by madRiver
A number of of not buying more then 10% yearly household income for vehicle purchase price was thrown out on Jalopnik. Thoughts?
??
Are they really suggesting that the average family of four in the US, with the average household income of roughly $60,000, buy a car that costs no more than $6,000?
A number of of not buying more then 10% yearly household income for vehicle purchase price was thrown out on Jalopnik. Thoughts?
??
Are they really suggesting that the average family of four in the US, with the average household income of roughly $60,000, buy a car that costs no more than $6,000?
Some of you are understanding it wrong.
I think what Jalopnik means is that a married couple shouldn't spend more than 10% of their combined income on vehicles. If you got to finance it, a 100K a year income couple can afford a new Honda Accord as the payments wont be beyond 10% of their annual income.
If I told you what my wife and I earn, you might wonder why I drive an Elantra.
I think what Jalopnik means is that a married couple shouldn't spend more than 10% of their combined income on vehicles. If you got to finance it, a 100K a year income couple can afford a new Honda Accord as the payments wont be beyond 10% of their annual income.
If I told you what my wife and I earn, you might wonder why I drive an Elantra.
Reading the story helps.
It's wasn't Jalopnik suggesting it. The topic stemmed from an article on CNBC from Sam Dogen of Financial Samurai.
Jalopnik's stance on the article (specifically, Tom McParland) amounted to:
Quote
Oh boy, another "millionaire" dolling out car buying advice that is typically both not-helpful and limited in scope.
and
Quote
...the best advice I can give is to be honest with your own budget and understand your total expenses.
https://jalopnik.com/how-much-should-you-spend-on-a-car-based-on-your-income-1839886863
It's wasn't Jalopnik suggesting it. The topic stemmed from an article on CNBC from Sam Dogen of Financial Samurai.
Jalopnik's stance on the article (specifically, Tom McParland) amounted to:
Quote
Oh boy, another "millionaire" dolling out car buying advice that is typically both not-helpful and limited in scope.
and
Quote
...the best advice I can give is to be honest with your own budget and understand your total expenses.
https://jalopnik.com/how-much-should-you-spend-on-a-car-based-on-your-income-1839886863
10% of annual income for car expenses* seems high, to me, at least.
But a whole lot more reasonable than what was implied.
$6,000/year for the average household for a car, or $500/month, is vastly different than a $6,000 car.
*So we are clear, is it 10% of annual income on purchase? Or on the total of expenses? There are still a lot of variables that are open to interpretation...
But a whole lot more reasonable than what was implied.
$6,000/year for the average household for a car, or $500/month, is vastly different than a $6,000 car.
*So we are clear, is it 10% of annual income on purchase? Or on the total of expenses? There are still a lot of variables that are open to interpretation...
Originally Posted by skyactiv
Some of you are understanding it wrong.
I think what Jalopnik means is that a married couple shouldn't spend more than 10% of their combined income on vehicles. If you got to finance it, a 100K a year income couple can afford a new Honda Accord as the payments wont be beyond 10% of their annual income.
If I told you what my wife and I earn, you might wonder why I drive an Elantra.
Yeah, that sounds more likely. Average cost of owning a car is somewhere in the 6-9k range a year and that includes finance charges, insurance, deprecation, fuel, maintenance, taxes and other fees.
Some of you are understanding it wrong.
I think what Jalopnik means is that a married couple shouldn't spend more than 10% of their combined income on vehicles. If you got to finance it, a 100K a year income couple can afford a new Honda Accord as the payments wont be beyond 10% of their annual income.
If I told you what my wife and I earn, you might wonder why I drive an Elantra.
Yeah, that sounds more likely. Average cost of owning a car is somewhere in the 6-9k range a year and that includes finance charges, insurance, deprecation, fuel, maintenance, taxes and other fees.
Think it was geared to these people especially younger ones who strap them selves into a 10 year car loan or less or buy a car that is 50g performance car when they make 25 k a year.
Originally Posted by PimTac
I'm not sure what to think. I don't consider Jalopnik a reliable outlet.
So for example, someone making $200k a year should only get a $20k vehicle? That limits the choice quite a bit.
And why is Jalopnik not reliable? See this from You constantly, because you choose to believe when you don't believe something they are not credible.
Feel free to post examples of all these times they have been unreliable.
Or because you think they are of a different political view, and some politicians whose only comeback is "fake news". And then offer no proof or evidence of said news being fake.
I'm not sure what to think. I don't consider Jalopnik a reliable outlet.
So for example, someone making $200k a year should only get a $20k vehicle? That limits the choice quite a bit.
And why is Jalopnik not reliable? See this from You constantly, because you choose to believe when you don't believe something they are not credible.
Feel free to post examples of all these times they have been unreliable.
Or because you think they are of a different political view, and some politicians whose only comeback is "fake news". And then offer no proof or evidence of said news being fake.
Jalopnik quality has slid year over year. What once was a creditable automotive journal is now nothing more than a repost rag.
When Tyler Rogoway, Tavarish, etc left, it quit being a site worth visiting.
When Tyler Rogoway, Tavarish, etc left, it quit being a site worth visiting.
i like the dave ramsey method. Pay yourself 500/month until you get enough to buy the car then buy it cash. then start saving for your next car.
do the math on buying it now on loan vs waiting 5 years and buying it cash, the lifetime savings are high. 10s of thousands.
considering you are putting the dollars in something that wil make interest not cost interest. say a 5year cd to start then a 4year then 3...and so on.
the spread on regular loan rates -3.9%. and CD rates 2% is 6% in your favor,
do the math on buying it now on loan vs waiting 5 years and buying it cash, the lifetime savings are high. 10s of thousands.
considering you are putting the dollars in something that wil make interest not cost interest. say a 5year cd to start then a 4year then 3...and so on.
the spread on regular loan rates -3.9%. and CD rates 2% is 6% in your favor,
No that is arbitrary and ridiculous. The more income you have, the higher the % you can devote to your vehicle, "IF" that is what you value. It's your money, spend it on whatever you want. If you want someone else to micromanage and split up all your expenses evenly, then you have no passion about anything.
Originally Posted by skyactiv
Some of you are understanding it wrong.
I think what Jalopnik means is that a married couple shouldn't spend more than 10% of their combined income on vehicles. If you got to finance it, a 100K a year income couple can afford a new Honda Accord as the payments wont be beyond 10% of their annual income.
If I told you what my wife and I earn, you might wonder why I drive an Elantra.
This . if you make 100k , which is kinda poverty wages in my area , you should spend no more than $10k a year on your vehicle payments .
Some of you are understanding it wrong.
I think what Jalopnik means is that a married couple shouldn't spend more than 10% of their combined income on vehicles. If you got to finance it, a 100K a year income couple can afford a new Honda Accord as the payments wont be beyond 10% of their annual income.
If I told you what my wife and I earn, you might wonder why I drive an Elantra.
This . if you make 100k , which is kinda poverty wages in my area , you should spend no more than $10k a year on your vehicle payments .
If you're trying to save money, not spending too much on a car helps you achieve your goal.. Not sure why this is brain science.
In other news..
Living frugally helps you save money..
In other news..
Living frugally helps you save money..
Originally Posted by madRiver
A number of of not buying more then 10% yearly household income for vehicle purchase price was thrown out on Jalopnik. Thoughts?
I think of this in a less dimensional way.
People should buy what they can comfortably afford with plenty of income left for savings, vacations, entertainment as well as life's unexpected events.
Buying less car than you can afford is always a good plan.
I know that I might be in the minority here, but a car to me is no more than a transportation tool that I try to select for potential entertainment value. For my wife, it's more a matter of what she's happy driving on her brutal commute. Either way, a tool.
OTOH, for some a car is also a hobby, so that's a different kettle of fish.
At the end of the day, people should buy what they want and can easily afford. If a more costly ride makes you grin every time you drive it, then why not?
A number of of not buying more then 10% yearly household income for vehicle purchase price was thrown out on Jalopnik. Thoughts?
I think of this in a less dimensional way.
People should buy what they can comfortably afford with plenty of income left for savings, vacations, entertainment as well as life's unexpected events.
Buying less car than you can afford is always a good plan.
I know that I might be in the minority here, but a car to me is no more than a transportation tool that I try to select for potential entertainment value. For my wife, it's more a matter of what she's happy driving on her brutal commute. Either way, a tool.
OTOH, for some a car is also a hobby, so that's a different kettle of fish.
At the end of the day, people should buy what they want and can easily afford. If a more costly ride makes you grin every time you drive it, then why not?
The smart way is the Dave Ramsey method stated above-when you buy a car with a loan, NONE of the interest is tax deductible, and ALL of the interest is paid BEFORE the principal is paid off. Notice how all of my vehicles are at least 14 years old, and I borrowed ZERO to buy any of them-a car loan is one of the worst loans around, only CC debt, personal loans, & payday loans are worse.
Originally Posted by bullwinkle
The smart way is the Dave Ramsey method stated above-when you buy a car with a loan, NONE of the interest is tax deductible, and ALL of the interest is paid BEFORE the principal is paid off. Notice how all of my vehicles are at least 14 years old, and I borrowed ZERO to buy any of them-a car loan is one of the worst loans around, only CC debt, personal loans, & payday loans are worse.
Normies are stuck because they can't wrench. If you pay someone else to fix your car, then eventually an old car is going to nickle and dime you. It makes a lot of sense for people to lease or drive a car until it needs a timing belt/expensive service and unload it. Having a beater fleet or even two beaters can be expensive in major cities that have both expensive registration and lots of bad drivers to drive up insurance rates (like Toronto).
It CAN make sense to invest in a DD for some people. I wouldn't take out a loan unless I absolutely had to and even then it would have to be a limited edition or something unusual: If the Suzuki Jimny ever returns to Canada, I would take out a loan for one without hesitation.
The smart way is the Dave Ramsey method stated above-when you buy a car with a loan, NONE of the interest is tax deductible, and ALL of the interest is paid BEFORE the principal is paid off. Notice how all of my vehicles are at least 14 years old, and I borrowed ZERO to buy any of them-a car loan is one of the worst loans around, only CC debt, personal loans, & payday loans are worse.
Normies are stuck because they can't wrench. If you pay someone else to fix your car, then eventually an old car is going to nickle and dime you. It makes a lot of sense for people to lease or drive a car until it needs a timing belt/expensive service and unload it. Having a beater fleet or even two beaters can be expensive in major cities that have both expensive registration and lots of bad drivers to drive up insurance rates (like Toronto).
It CAN make sense to invest in a DD for some people. I wouldn't take out a loan unless I absolutely had to and even then it would have to be a limited edition or something unusual: If the Suzuki Jimny ever returns to Canada, I would take out a loan for one without hesitation.
- Status
Similar threads
