Percentage of take home to pay off your car

Jefers

Just wondering what percentage of your take home pay do you spend on paying off your car loan (if you haven't bought it outright) or indeed what the maximum percentage you think this should be?

I really want a new car but not sure of my budget if I get a new job I am going for.

KeithP

Almost impossible to come up with an appropriate percentage.

Everyone's lifestyle will be different. For example, I imagine there are people out there who can spend 'a high percentage' on gambling, cinema, football matches, etc.etc.

If you really want to restrict other spending to increase your saving for a car, then you have artificially altered 'the percentage', haven't you?

'The percentage' may also vary significantly depending upon how much your take home pay might be.

Sorry, that didn't help much, did it?

Volcano

What maximum percentage do I think it should be? 0%.

I'm personally happy tailoring my car to whatever I can afford to pay outright, if I can't afford it then I don't want to get a loan for it.

globalds

Maybe in these credit crunch days it would be better to ask...
How much should I be saving each month to pay cash for my next car.

Maybe £150 a month for 3 years would give a fairly decent amount.

forgotmyname

How much money do you have leftover every month, including months for holidays and xmas?

Do you have a car now? how many miles do you travel, how much fuel do you buy insurance costs?

Deduct all these from your excess cash and ideally you dont want to be spending more than 50% of that so you have enough left over for servicing and repairs.

Hintza

How secure is your job? Bear in mind if that public sector is going to be in for a big shock after the election.

marlot

I've only once borrowed money to buy a car, in 30 years of driving. Instead I did my best to economise by driving less and cycling more in order to put money away for the replacement car when it was needed.

marlot

PS. Older cars need not be unreliable or expensive to run. I had a good 1996 mondeo estate which I gave away to a friend 5 years ago, and it still runs perfectly with only minor repairs needed in that time. If you're not doing high mileages, then larger petrol cars can be particularly good value.

I bought a 1-year old 4x4 when the prices were low 2 years ago, and its still worth what I paid for it now! I intend to run it for the next 10 years, so I'm out of the car loans racket for some time now!

Jefers

Yes it is a difficult question without knowing my circumstances. I live with my parents so I can save a decent amount each month. I am now thinking I will forget the car for the moment and will just save as much as possible as I am also saving for house deposit to move in with my girlfriend. The most sensible option will to be wait til I moved out then see what I can afford (our target is to save up enough by June-July 2011). This will be a challenge because I'm not the most patient person in the world.

I have a 1 litre 51 plate Corsa at the moment which I have had since I passed my test and it is pretty cheap to run, I guess I am just a bit bored of it.

I was reading on another forum that some people buy a car worth up to their years salary then pay it up which seems a bit nuts. Another website says ideally you should be looking at max 36% of take home pay should be spent on mortgage payments/loans which seems sensible but not a lot of money to play with (if/when I get a mortgage).

Thanks for the advice.

thescouselander

Jefers wrote: »

Just wondering what percentage of your take home pay do you spend on paying off your car loan (if you haven't bought it outright) or indeed what the maximum percentage you think this should be?

I really want a new car but not sure of my budget if I get a new job I am going for.

Well, it certainly shouldn't be more than 100%

hellokitty08

well the answer really is what ever you can afford. Mine is 10% maybe a little less then that, but I do spend 50% on rent council tax and bills. So i guess it depends on how much disposable income you have.