Recommended Cars By Income

"E. Julius" (soonerfrommi) 02/20/2015 at 20:01 • Filed to: None

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Lots of money talk on Oppo today. Reminds of when I randomly came across !!!error: Indecipherable SUB-paragraph formatting!!! . Discuss. (note: I don't endorse this)

When I initially came across this, I was skeptical. Certainly if I was making $200k I'd treat myself to something a little nicer than Civic. After looking at it more though, I don't think it's completely ridiculous. The 10% goal is a bit of a stretch, as the suggestions illustrate, but I think 25% or less is the sweet spot. I know that great cars can be had for less than $10k, even for enthusiasts, so when I buy my first car for myself I'll probably just buy whatever I liked most for around 20% regardless of my income.

That being said, I like to save and invest, and for me liking cars is a hobby that doesn't compel me to the point of wanting to make financial sacrifices. Your mileage may vary depending on your preferences. What are your thoughts Oppo?

djmt1 > E. Julius 02/20/2015 at 20:04

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1/10?

I thought it was 1/3.

PS9 > E. Julius 02/20/2015 at 20:06

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A $1-2k Beater isn't glamourus, but vastly superior to all of these, and there's no reason why someone at this bracket can't afford to get one.

Arch Duke Maxyenko, Shit Talk Extraordinaire > E. Julius 02/20/2015 at 20:07

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FinancialSamurai.com is a crock of shit apparently.

E. Julius > djmt1 02/20/2015 at 20:08

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Obviously there are no hard and fast rules. This guide is written from an extreme saving perspective so I think 1/10 is pretty low, but for me anyways 1/3 seems a bit high, though not unreasonable. Interesting to hear other people's opinions.

Alex B > E. Julius 02/20/2015 at 20:08

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Most people don't follow this at all probably. Anyway, when Im done with school and a have secure job I want a previous generation S550 with Car Max warranty, and probably an E70 X5.

E. Julius > PS9 02/20/2015 at 20:09

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It's definitely a bit ridiculous for this article to assume that just because you are poor you have the luxury of completely eschewing a car.

Desu-San-Desu > E. Julius 02/20/2015 at 20:10

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I went with 1/3 when I bought the Mini...

E. Julius > Alex B 02/20/2015 at 20:12

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I think very few people follow this, especially considering it's from a complete no name website. I've looked at the CarMax stuff, but I've had a hard time finding something to really milk the warranty on for less than like $35k before the price of the actual warranty itself (so really more like $40k).

E. Julius > Arch Duke Maxyenko, Shit Talk Extraordinaire 02/20/2015 at 20:13

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Somebody isn't a FINANCIAL HERO

PS9 > E. Julius 02/20/2015 at 20:14

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At the top of the second bracket, you are making 5x the federal poverty level, and they're still recommending the bus or a scooter? C'mon...

davedave1111 > E. Julius 02/20/2015 at 20:16

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I don't know, spending 10% of your income running a car - including fuel and maintenance - sounds on the high side to me. You can raise that a bit for people doing loads of miles, maybe, if that's saving them a lot on housing costs.

Typically, 20-40% of people's income goes in tax, then another 20-40% goes on housing, and 10% or so on food. Add in clothes, a phone, internet bills, and other miscellania, and what's left over isn't going to leave room to spend a massive chunk on a car (or anything else).

Arch Duke Maxyenko, Shit Talk Extraordinaire > E. Julius 02/20/2015 at 20:17

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Bitch, I'm the Goddamn Financial Batman.

dogisbadob > E. Julius 02/20/2015 at 20:17

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or a jalop? :p

macanamera > E. Julius 02/20/2015 at 20:17

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lol this is hilarious...250 to 500 mercedes e350

250 to 500 honda fit honda civic lol

E. Julius > davedave1111 02/20/2015 at 20:20

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I think it was just referring to what sticker you should pay on your car, not factoring in running costs. If you didn't have the cash to buy the car outright in savings the loan would probably be over more than a year, so a car worth 10% of your income wouldn't necessarily cost 10% of your income in one year to buy.

Demon-Xanth knows how to operate a street. > E. Julius 02/20/2015 at 20:21

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or go used. My grand Prix gtp and corvair combined didn't break into five digits. (6400+2400)

E. Julius > Demon-Xanth knows how to operate a street. 02/20/2015 at 20:22

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Used all the way. I think buying a brand new car is an unbelievable waste of money.

Carl (@stuffcarlsays) > E. Julius 02/20/2015 at 20:23

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My car was 1% of our household annual income :P Financial God.

Mercedes Streeter > E. Julius 02/20/2015 at 20:24

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A smart eh? So they're saying that even though I only make $25k a year, I actually ball like I earn $100+k? ....Sure?

E. Julius > Carl (@stuffcarlsays) 02/20/2015 at 20:25

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GTFO 1%er

Mercedes Streeter > PS9 02/20/2015 at 20:25

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Imagine earning $150k a year and thinking "man, I can only afford to buy a Toyota Scion A/B".

E. Julius > Mercedes Streeter 02/20/2015 at 20:25

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Maybe even 150!

Carl (@stuffcarlsays) > E. Julius 02/20/2015 at 20:26

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Though the lease payments on our other car is about 5% of our annual household income.

Nibbles > E. Julius 02/20/2015 at 20:27

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This is dumb. Like fuck are you going to find me buying a Honda Fit.

PS9 > Mercedes Streeter 02/20/2015 at 20:27

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Holy crap I just looked at that line now. Those recommends are fucking ridiculous.

E. Julius > Carl (@stuffcarlsays) 02/20/2015 at 20:27

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You're still at hero status.

davedave1111 > E. Julius 02/20/2015 at 20:28

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Oh yes, that makes a lot more sense. Sounds about right that way. I guess as petrolheads we can add a bit more from the hobbies/fun budget too, but for people who don't care much about cars that sounds very reasonable.

Demon-Xanth knows how to operate a street. > E. Julius 02/20/2015 at 20:28

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Or just keep one vehicle for a long time. If the trailer brakes hadnt failed I would still have the $20k dakota I bought in 2001

E. Julius > Nibbles 02/20/2015 at 20:29

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I like how according to this chart that would place you anywhere between $50k and $200k (but not 75-100)

If only EssExTee could be so grossly incandescent > E. Julius 02/20/2015 at 20:31

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I love how a Hyundai Accent is a tier above a Civic.

wkiernan > E. Julius 02/20/2015 at 20:32

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The problem with this is this simplistic, dogmatic notion that f(overall income) = (cost of income-appropriate car) describes a straight line that passes through (0,0). Obviously in real life this is absurd for various reasons, among them the fact that cars have very significant utility, besides of course the pleasure value they bring us Oppo readers.

Clearly, for the majority of us living outside of the few American cities with adequate mass transit, it can be well worth 20% of the annual income of a person earning $20,000 a year to have reliable independent personal transportation, as compared with "bicycle, walk, bus, train, carpool, scooter" - that's a big, important benefit. But a person earning ten times as much (200K) does not get a comparable benefit from spending 20% (40K) as compared with 10% (20K) or even 5% (10K), which will buy him a solid if unglamorous ride from point A to point B.

Mercedes Streeter > PS9 02/20/2015 at 20:33

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Oh gosh, I just read the $250k/yr recommend: Prius

E. Julius > wkiernan 02/20/2015 at 20:33

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Pretty solid analysis. Econ major?

Nibbles > E. Julius 02/20/2015 at 20:33

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Ambiguity rocks :)

My choice in vehicle - Volvo S40 T5 R-Design (or Volvo in general) is not listed at all

Of course, neither is "Beater Dodge Dakota" or "Beater Saab 900" so there's that too

Joel Reeves > E. Julius 02/20/2015 at 20:35

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is this 10% per year? a family making $200k, would spend $20K per year, or $100K on cars over 5 years. That is one at $100K or two at $50K. That kinda makes sense, but the actual car names suggested don't. (Civic, Fit, Altima or Corolla)

Decay buys too many beaters > E. Julius 02/20/2015 at 20:36

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I'm at a solid 40%, with a recurring annual 5-10% on modifications and seat time

E. Julius > Joel Reeves 02/20/2015 at 20:36

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No I think the idea is that the sticker price of the car you buy should only be 10% of your income. So a family making $200k would buy a $20k car.

E. Julius > Nibbles 02/20/2015 at 20:37

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Both of those are $10,000,000+

Bryan doesn't drive a 1M > E. Julius 02/20/2015 at 20:39

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10% is pretty low, but a lot of people, myself included, probably buy more car than we need.

However, if the author had picked a more reasonable percentage, would anyone have posted a link to the story?

E. Julius > Bryan doesn't drive a 1M 02/20/2015 at 20:40

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I think 10% is pretty reasonable for someone who just needs transportation (i.e. non jalops). It's obviously not going to get you any admiration from your peers, but it's a good way to put some cash away. Good point about the linking though haha

Flat Six > E. Julius 02/20/2015 at 20:50

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I'm okay with 10% if it means I get to average 10% per year. That does not seem to be what he is implying though. This is probably good advice for somebody who is in debt or needs basic transport. If cars are your hobby you should spend as much as you want.

dogisbadob > davedave1111 02/20/2015 at 20:58

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Typically, rent is more than 50% of income for many people

davedave1111 > dogisbadob 02/20/2015 at 21:01

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Not usually, although that's true in some areas. It tends to be up to 50% of post-tax income.

yamahog > E. Julius 02/20/2015 at 21:47

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LOL, and TaurAS? nah.

Wurrwulf > Flat Six 02/20/2015 at 23:02

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This makes much more sense. If a person makes $50k/year and spends $5k/year on a car, that gives them the budget for a $25k car for a standard 5 year loan. I think that's perfectly reasonable, as long as they are responsible about budgeting other expenses in their life.

Someone better than myself.

Flat Six > Wurrwulf 02/20/2015 at 23:18

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Also it is not like that 25K car is worthless after 5 years. Maybe you can sell it for $12K and buy a $37K car next, or get two cars.

GhostZ > E. Julius 02/21/2015 at 06:05

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Cars are not consumables, they're capital.

Joel Reeves > E. Julius 02/21/2015 at 16:10

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In The US this economic model is not sustainable, your saying the only people that should really be buying NEW cars are those making $200K or more, thats less than 5% of the country. (The cars they would be buying are much cheaper than what they currently drive.) Where do all the used cars that everyone else needs to be driving come from? You have 95% of the people fighting for sloppy seconds from the rich guys. Its a crazy idea which doesn't work. The Worlds auto industry goes for a nose dive and we have a world wide depression. GOOD LUCK

E. Julius > Joel Reeves 02/21/2015 at 16:18

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Like I said in the first paragraph, I didn't say it, financialsamurai.com did. I just thought it was something that could be interesting to discuss. Also, you don't have to tell me that the only way to keep the global economy afloat is a constant cycle of dissatisfaction and destruction.