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What are your general guidelines on how much money to spend on a car? Do you tend to find the car you want, and make it work with your budget? Or do you prefer to figure out how much to spend, and then look for cars at that point?

These are some of the various spending guidelines I've heard:

- no more than 10% of your monthly net income should go towards a car loan

- if you can't pay for it in cash, you can't afford it

- total value of your cars should be no more than 50% of your annual household gross salary

- total monthly debt should be no more than 33% of your monthly gross income

Just curious what others here think.
 

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Bullet two is your best bet, but if you must follow a guideline...then the price of a BRAND new vehicle should not be more than 2/3 of your annual gross. I guess you can also say new/pre-owned, but you need to factor in the cost of maintenance (ie foreign european tend to cost more).

The last bullet...unsecured debt should be no more than 3x your monthly gross.

Not sure about bullet 1 & 3.

If you must finance, ensure your credit is in EXCELLENT standing in order to get the lowest rate. This will also assist with establishing long term credit.

PS. If you have no debt/financial obligations...spend as much as you can afford. :p

What are your general guidelines on how much money to spend on a car? Do you tend to find the car you want, and make it work with your budget? Or do you prefer to figure out how much to spend, and then look for cars at that point?

These are some of the various spending guidelines I've heard:

- no more than 10% of your monthly net income should go towards a car loan

- if you can't pay for it in cash, you can't afford it

- total value of your cars should be no more than 50% of your annual household gross salary

- total monthly debt should be no more than 33% of your monthly gross income

Just curious what others here think.
 
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