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Old 03-18-2011, 01:20 PM  
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Bristol, Tennessee
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Car cost verse income?

ok, yeah I know this is kind of silly and will be mostly opinion based, as there are too many factors. but what if any ratio of income to new car cost is reasonable.

For example if someone makes 45k a year and is single in fairly low cost area (for reference 1bedroom apt's run $400-$600, typical 3bd/2ba new(ish) homes run around $150k-175k) and what price does a car become excessive?

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Old 03-18-2011, 03:22 PM  
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Keizer, OR
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There are so many possible variables it's difficult to come up with math that fits all. The newest car I ever owned was 4 years old when I bought it. I have several reasons for this and 50 years of car ownership proves my choices wise at least for me.

The Summer of my 18th year I dated the dentist's daughter only to later discover she had been dating my Austin Healey Sprite. I will never understand the California car culture where a guy in a shack drives a car worth more than he is.

A new car can give you some security unless it's a lemon. A used vehicle might bear a bit of risk but over the years only 2 cars proved unwise. Never buy a Peugeot, they're crap. Never buy a high performance car that's over powered for city driving.

When you shop used it's best not to wait until you need a car. Just keep your eyes open and when a creampuff appears, grab it.

I'll believe corporations are persons when Texas executes one.: LBJ's Ghost
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Old 03-18-2011, 08:51 PM  
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Sammamish, WA
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There are a lot of variables because everyone has other expenses.

If you make minimum wage but have managed to save up $10,000 ad can buy a good used car great.

If you make minimum wage and put $100 down on a $30,000 SUV with a loan over 5 years your payment is $650, nearly half your income before taxes, and you still have to get insurance. My current car payment is $400 which feels
a little much, at about 10% of my take-home pay. I think half that, 5% of take home or $200 would be a lot more comfortable.

Back when my income was less but my house payment was much less,
I had a $455 payment and no trouble making it on time. My first new car had a payment of $74/month, when I was making about $600/month, but rent was only $150 and gas $0.30/gallon.

I'd say with the income and rent you gave, if you are an average spender
for food, clothes and entertainment, with paid medical, about $150/month car payment would be good, anything over $200 excessive. Remember too the higher priced car usually means higher insurance cost.
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