[andymc0001]

Hi Im just looking at a new car what percentage car payments to salary would you say was acceptable?

[Kerr]

I don't think it's as simple as that. Too many other factors to consider such as running costs to purely think about loan payments only.

[pjs]

It can be as simple as the op likes, maybe a quick poll.

[Em135eye]

A fifth at the very very most.

Or even better, buy the whole darn thing with cash.

[rogerxp]

100% and sleep in it - sorted .

[peterg1965]

Originally Posted by rogerxp

100% and sleep in it - sorted .

110% for me and I keep on the move so no one can catch up with me

[mithiral67]

I have always heard 5-10%

[mithiral67]

If you really enjoy cars and consider it a hobby, I can see justifying more though.

[pjs]

I reckon the older you get, the smaller the percentage . Science and wizardry taught me that

[andymc0001]

I bought the current car with my savings but want to release the cash for a property deal. I would like a new/newish car so was looking at 20% of my basic, is this too high?

[rogerxp]

...what's the worst that can happen???

You end up having to sell it.

...live a little, just get what you deem to be affordable.

Can't beat a bit of free financial advice from the expert .

Simplz .

[RockIt]

Originally Posted by 335diesel

A fifth at the very very most.

Or even better, buy the whole darn thing with cash.

Of course cash is better. But realistcally how many people can actually do that? My wife just bought her Audi A1, (I know you will choke on the word) Audi ), cash with a trade in on her Mini and money from her father's legacy. Vast majority of us need to borrow one way or another to get the car. I certainly did. You do still come across as a cock sometimes mate and I was on your side back in the day when people were slagging you!

Advice to OP, whatever you feel able to afford. I've gone in way over and regretted it, but then I've loved the car. My dad's advice...if all you can afford to do after you've bought it is look at it instead of driving it you've made a mistake! Weigh up ALL your costs; insurance, tax, petrol, maintenance, then decide. Good luck to you.

[Em135eye]

So you borrowed to get your TT then, so don't like my suggestion so insult me. Nice one.

[KadeSdad]

I put most things through my business, if it gets through then bonus, if not you just pay for it. If you own a Ltd company then a good accountant will pass it off as a directors loan if it becomes an issue....think I have about 5 or 6 directors loans

[Em135eye]

Kade - there is that as well ;-)

[peterg1965]

Never reveal on Pistonheads (General Gassing) that you have bought on finance, the truly virtuous on there will have a field day telling you that if you have to finance you can't afford it - what a total load if shite that sentiment is.

I agree that you should pay what you are comfortable with, taking into account your total expenditure on mortgage, other loans, utilities, food, holidays etc. I would guess that the majority of new cars are bought on finance/lease packages. I think even if I had the cash, I would not have bought my Pork for cash, why would you do that on a depreciating asset, particularly if you can make your cash work harder for you in investments etc.

Originally Posted by pjs

I reckon the older you get, the smaller the percentage . Science and wizardry taught me that

I actually find the reverse is true for me. My salary increases, inflation and time reduces the size of the mortgage proportional to my salary, which increases the amount that can be spent on car(s), and the cars tend to get more expensive too.

[xenon]

I wouldn't say it as a percentage of salary I'd say as a percentage of disposable income. If you have no mortgage for example you might go a bit more. I could have (just about) bought my F10 if I sold all of my shares but they're earning more than the finance cost so it made sense for me to finance my purchase.

I guess you just have to weigh up your own situation but I agree with Peter1965 that it's absolute bollocks to generalise and say that it's crazy to finance a car. Unless you know that person's financial situation how can you possibly say? What might be great for one person might be financial suicide for another.

[zltm089]

I would say if you're earning about £25k a year then £300 a month on repayment would be ok....

i'm quite old school and would rather save up and pay in full...

having said that, its so hard to save nowadays!!!

[prt71]

Originally Posted by xenon

I wouldn't say it as a percentage of salary I'd say as a percentage of disposable income.

Exactly. Salary completely irrelevant.

[mowflow]

I agree that it's more about disposable income than percentage of basic or even take home salary. Everyones situation is different and you also need to look at what your situation might be throughout the duration of the cars ownership. I would think that 20% is a bit much to be paying for a car though, especially if that's just the payments for the car and not overall ownership costs.

In terms of finance I don't have a problem with it but in the past I've always went for a personal loan in this situation because i've always felt it's got the easiest get outs. I think most people finance cars in one way or another. I bought a car last week and the salesman nearly fainted when I said I didn't need a finance quote. You would think it was the first time it had ever happened.

[Steve A]

I think any % is irrelevant. Its got to be affordable to you. Some people go bonkers and spend nearly all there disposable income on a car, but to them the enjoyment they get from it justifies the expense, only you know how much you can afford.

On the question of cash vs finance its definitely not straight forward. In some respects its cost me more buying with cash outright than some of the cars ive had on finance.

How can that be i hear you ask?

The cars ive had on finance i tend to keep longer than the cars ive bought outright. So simply looking at depreciation for me it makes sense to buy on finance as i keep the car for 2 years minimum. All the cars ive had like RS4, R36, C55, ISF to name a few i bought outright RS4 had 12 months only lost 2k(very rare) all the other had for 6 months maximum and lost on average 5k on each the R36 i had for 10 weeks and lost 4.5k!!!! i know for a fact if that would have been on finance id still be in it.

My current car is on finance got a great deal cost me 450 a month but had i bought it outright i wouldnt have put the 30k or so into shares and wouldnt be 7000 up already on my money. Thats equivilant to 15.5 months of free car ownership. Its not always a simple thing to figure out.

The wife always keeps her cars for about 2 years anyway so we buy cash as it makes sense to do so.

Goodluck

[RagingKileak]

Here is a different way of thinking for you - not really related to the OP's question but here goes.

I own my Golf outright and it is the cheapest car I have owned for a few years.

Somehow though, I am absolutely loving it and I think the reason is this.... I can spend a (relatively) massive amount modifying and tinkering with it each month.

I'm now onto my third set of wheels, I've spent £1500 on engine parts, £800 on suspension parts (yet to be fitted) and about £500 on brakes - all bargains I bought second hand or got a deal on and in incremental chunks of £300 - 600 quid a month averaged out.

Next thing I am going to fit multifunction buttons on the steering wheel, a HUD in the dash and the OEM Sat Nav/Bluetooth unit so it all integrates nicely. All OEM kit which again can be picked up for not much money second hand, but which holds its value around the same as I paid when I sell it again (as I have the wheels.)

So if I take into account the cost of the car, the mods I am spending on, depreciation I am not paying on something more exotic and the decentish fuel, I am paying much less for the Golf, but having a lot more fun than I have with other cars recently....

Just me though. Doesn't really apply if you don't like to tinker.

Oh and this is something I also do, because I paid for the car outright - I have 'paid myself' a deposit of about £3XXX into a cash ISA on April 1st. I then 'pay myself' a monthly fee of £200 a month into the same ISA which will eventually (next April 1st) match my total tax free allowance for the year.

Its not really representative of a significant % of my income, but it is a sensible way of ensuring I don't 'expand' into my means and then not be able to get into a more expensive car should I so wish later. It's a bit of fun really, just something I managed to sell to myself!!!

Matt