skoosh

....spend on a new motor.....?

I currently drive a uk96 turbo wagon and must say it's well looked after even though she's now done 120k.

I have shares in the company I work for and currently stand to gain about £7k and collect just over £10k, these shares mature in October 2006.

I plan on buying new car next year, I've a few in mind, but also plan on moving house next year which again will show a profit of about £40k.

What % of your annual NETT income would you consider spending on a car?

My gross earnings last year were in the region of £35-40k.

I get a car-allowance of £375 per month as I opted out of company car scheme and also recieve 40p per mile for business miles of which I probably do 2-300 per month.

What would you spend?

I aplogise if this is SIAL.....

Thanx.

Si.

PS:forgot to say am 34, married with 2 young children and will be debt-free except for mortgage next March...

Notorious

what does SIAL stand for???? sorry if thats a SIAL lol


could it be SEEN IT ALREADY??

KiwiGTI

I wouldn't relate it to gross income at all. It has no relevance.

(Just to clarify I know people who drive new 911s but they have managed to structure it so that they essentially have a £15,000 loan, covering the buy price less future value)

skoosh

Kiwi, sorry mate, edited accordingly.

Si.

Robertio

iTrader: (1)

When I bought my first car I was on just over £800 a month and was spending £440 of that on the car loan, once you added in fuel for the 40mile a day commute and other running costs I was spending around 75% of my income on it (all the rest was rent).

Now I'm slightly better, but only because my mortgage & bills take up a larger percentage. Of my base salary it is still around 75%, but closer to 65% when you take into account overtime (so every penny I earn).

KiwiGTI

It's still too hard to say, there are so many factors.

What sort of finance deals can you get?
How much of a car nut are you?
Do you mind losing money on a car?
etc

skoosh

It's hard to say really......I read so many posts from people buying brand new sti's and wr1's etc etc...and i wonder how much these guys must earn to pay for that over a number of years.

I'm looking at either selling my wagon privately, plus adding some of my share profits and possibly taking out a loan for the balance.

So let's say I get £3.5-4k for the wagon, add £4k from my shares and get a loan for another £5-7k.

I'm a massive car nut, expect to lose money on a car as long as I enjoy it, probably get a cracking loan deal especially as the public spending situation in the uk is bordering on recession although not looked into this yet.

Got plenty of time to mull it over and always buy my lotto tickets too...

Si.

SiDHEaD

I spend about 40% of my take-home on my car finance - but as I've been travelling 80miles a day it's been a struggle due to fuel etc costs. But I love my cars so it's not a problem. I don't have a family to consider however

Fangoria

iTrader: (1)

40p per mile and you get a car allownce - now thats good
Usually if you get a car allowance you have a reduced mileage rate of about 12p a mile..............

On cars, I have always gone on being able to afford a car what is similar to my gross income, on finance

Hence if my gross was £30k, I would get a car up to £30k or if I was on £90k I would get a Porsche Turbo say

Depends what you feel you can afford and as others have said, whether you are a car enthusiast

I typically look to finance through mortgage finance, as thats usually the cheapest, and aim to pay the balance down as quickly as possible - a bit like a loan but at a lower rate of finance

Re personal loans - I found out the other day that they were effectively like a mortgage - if you default on it and have other assets then they can come after you - so they are not really 'unsecured' - hence why its better to go the mortgage route

Some do balloon type deals but I think these are a rip off (unless you get an amazing deal) as the ones I've seen have no flexibility on repayments - i.e. you always have them for say 3 years then pay off the large 'baloon' o/s at the end of the 3 years - that way though you'll always get hit for high interest - whereas if you do as an extra to the mortgage then you can have the flexibility - YOU have to be discplined though as you dont want a car loan to end up being a 25 yr loan!

imlach

I spend about 1% or 2% of my monthly income on running & financing my shiny Mercedes E class estate

Can't believe some of you are spending over 50% of your hard earned on a car!!

fast bloke

Is it really shiny? I always heard you can't polish a turd

I wouldn't relate it to gross income - work out what you are happy to pay each month and how much deposit you have, go tell a dealer and see what you can buy - you would be surprised what you can buy with an 8k deposit and £375.00 a month.

(Advice from FB the FA, who once bought a car that was 800% of gross income )

imlach

It's super shiny - proof that you can turn mutton into lamb

MikeCardiff

iTrader: (2)

Hard to say how much to spend without knowing what other things you have to payout each month, e.g. mortgage, other loans, bills, shopping etc...

What I would say is work out what you have left after everything else has been paid out each month to get your expendable income, then budget 50% of this for the car, insurance and running costs.

Mine is bought through my business, so in essence doesnt really cost me anything as such, so I could have gone out and bought pretty much any brand new car, but I dont have that much time to drive, dont need to commute miles, so taking out a loan for a new car seemed a bit daft when I could buy a decent used car for cash and have it all paid off straight away.

davegtt

Done it before when I had nowt better to pay for, probably spent fortunes on cars but not now, got a car worth something thats paid for and unless I come into large amounts of money cant see me getting anything more expensive that that, that way I can afford to buy pretty much what ever within that budget and spend the monthly money using it on running costs rather than monthly payments on a car thats going down in value quicker that you can pay off.....

As a joint house hold income I probably spend 22% on the morgage, 22% on household bills/CC etc and about 50% on RUNNING (not paying the loan off so can stop payments the second I sell the car or take it off the road) my cars and social activities

Bakerman

Move house first and then see how much you have left.
We spend 40% of net income on the mortgage and nothing on cars (co. cars and motorbikes rule) and I think you will be suprised just how much you will spend just after you move in. There will be always be nice new cars.