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      06-13-2012, 05:29 AM   #1
MEGA
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% of yearly income you'd spend on a car?

Hi Chaps.

I did some calcs today on rough costs of running the 335d including fuel, maintenance, the finance (which plus or minus a few percent would read for depreciation which I'd have taken into account instead of I was outright owner) etc etc.

It came out at quite a scary number!

I was wondering what you guys would set as a max cap on monthly car costs as a percentage of income?

See my numbers:

FUEL
=============================

315 mls / tank

5.25 miles / ltr

ave price 145.9



3.6 miles /

3000 mls travelled feb/mar/apr/may

Extrapolate 12/year this year

833 cost of fuel for 4 months

~3500 / year fuel costs for year
=============================

NECESSITIES
=============================

Insurance:

1500

(5k / year car costs)

Service:

400 / year

(5400)

tax:

200 / year

(5600)

tyres: 1 set / year

(6600)
=============================

FINANCE/DEPRECIATION:
=============================

monthlies:

523 / month

6276 / year

==============================
12,900 a year on car all in !!


This represents between 25-30% (it'd be rude to tell surely) of yearly income on a car!



Do you guys think this is too high?

I ***LOVE*** the car so am very unlikely to do anything about this number. But, I'm pushing to save pennies as and where I can (You'll note the lack of 200 different mods to this one unlike with my past car history .. ) so have been breaking down numbers all over my statements. This is easilly the largest %income expense as I live at home (Hence pushing to save pennies )


Hmm..

Dave
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      06-13-2012, 06:02 AM   #2
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you forgot about cleaning it - i bet some on here spend as much on wax etc as they do on tax
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      06-13-2012, 06:07 AM   #3
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Christ you're right I've got worth of cleaning stuff too
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      06-13-2012, 06:35 AM   #4
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Does sound a lot. Having said that you are (I think) still young(?) No offence meant if not. Mine's about 8% but I'm old at 44.
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      06-13-2012, 06:37 AM   #5
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      06-13-2012, 06:37 AM   #6
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Not including depreciation I worked it out to 28% for fuel, finance, insurance and other running costs. Such is life
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      06-13-2012, 07:12 AM   #7
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Is 30% of your gross or net income? People often forget tax, NI, student loans etc when thinking what they have to spend.

It would be better to think what the car would cost as proportion of disposable income. Net income minus recurring bills of mortgage, utilities, food etc. Might be a scarily high percentage come to think of it!!
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      06-13-2012, 07:20 AM   #8
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Quote:
Originally Posted by phil200tdi View Post
It would be better to think what the car would cost as proportion of disposable income. Net income minus recurring bills of mortgage, utilities, food etc. Might be a scarily high percentage come to think of it!!
Yes it would.
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      06-13-2012, 07:29 AM   #9
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Check your fuel costs, I can't quite understand how you get to the 833 for 4 months but that certainly does not multiply up to 3500 per year, more like 2500.

And do you really spend 1000 per year on tyres with relatively low mileage.

Your depreciation calcs will also tail off, you would need to look at that over a 3 or 4 year period and average it out.
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      06-13-2012, 07:35 AM   #10
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Remembering a few threads about your circumstances and income in the past, I wouldn't consider buying such an expensive car.

Mine will add up to nearly 10% of my salary and I feel that is enough.

I bought cars expensive relative to my income when I was younger and a lot of the older guys at work said I was mad.

Now nearly 15 years later it isn't what cars I owned discussed in the pub.

It was the guys that had more spare cash living like young ones and experiencing expensive holidays etc that still look back fondly of those days of their life.

A nice car is great but I wouldn't give up so much for it.

25% of your salary is just mental in my opinion.
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      06-13-2012, 07:38 AM   #11
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Insurance £1500, ouch. I've not looked into 335 i or d insurance costs but hope they wouldn't be that high.

Other than that, it seems a reasonable amount. With how deals on cars are set up to get you to trade in every 3 years or so, cars are like a mortgage.

...then again Kerr makes a good point.
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      06-13-2012, 07:49 AM   #12
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Quote:
Originally Posted by Kerr View Post
Remembering a few threads about your circumstances and income in the past, I wouldn't consider buying such an expensive car.

Mine will add up to nearly 10% of my salary and I feel that is enough.

I bought cars expensive relative to my income when I was younger and a lot of the older guys at work said I was mad.

Now nearly 15 years later it isn't what cars I owned discussed in the pub.

It was the guys that had more spare cash living like young ones and experiencing expensive holidays etc that still look back fondly of those days of their life.

A nice car is great but I wouldn't give up so much for it.

25% of your salary is just mental in my opinion.
Agreed.
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      06-13-2012, 08:07 AM   #13
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Like others have said I paid a much larger percentage of my salary when i was younger, probably closer to 25% but don't know exactly as it was a long time ago. I left home at 17 but rented/shared cheap accommodation and went lots of great holidays on top of enjoying fast(ish) cars. I based my decisions on where I saw my financial situation going in the not too distant future and made a point of never getting into debt that couldn't be settled should I encounter an ICE.

I think lots of young guys get into a car thinking they can afford it at the moment although it's pretty much all they can afford. Most don't think about the fact that unless their wage increases considerably they are going to be stuck living with their mum until they are in their 30s. There was a "my new S3" thread nearly every week on the Audi forum and nearly all of them were from early 20 somethings living with ma'n pa. Not looking ahead to far is all part of being young, it takes the wisdom of experience to realise it's a silly approach.

Until recently I paid about 10% but now I pay buggerall% which is absolutely fantastic. Older people pay less as they invariably make more and have more things leaching the wages out of their pockets such as wife, kids, home etc.
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      06-13-2012, 08:12 AM   #14
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Hence my point about age at the start. I would have been about 50% or even more in my late teens / early 20's but try and keep it below 10% now.
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      06-13-2012, 09:42 AM   #15
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The only benefit I have in my favour and to counter the above "you are mad" type discussions: Is that I:

1. Am still putting away over 1k a month towards a home
2. Have 2-3 decent holidays a year
3. Go out for meals twice a week at least

But:

4. Yes. Live at home.

Last thing to note is when the car is sold: I will have a lump sum with any luck. The plan is to keep it minimum 3 years which will mean I claw back some money there as I'll owe less than the car is worth. That will skew the depreciation figures per month slightly back in my favour. Especially if I manage to keep it 5 years and thus owe nothing but have a car worth circa 10k still. But we all know I'm unlikely to do this given my previous history.

In terms of monthly income after tax, pension, healthcare life cover tax all the rest of it - 1100/mo as an extreme upper limit for running the car would represent something more like 45% of what is disposable income after bills. As said I can still put 1k away if I'm frugal in a month. Last month got the car remapped and went to rome; and still managed to break even [although I'd paid for flights / accom already]/



Interesting to hear everyone's views so far though! I knew it'd kick off a decent debate.

Oh and tyres are accurate I get 8-10k miles out of a set of tyres. Those who question that either drive a lower powered car or drive their high powered car incorrectly!!

Insurance at 1500 is a pinch. I paid 3200 for third party cover on a 1.1 litre car just 6 years ago ..
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      06-13-2012, 09:46 AM   #16
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Seems like you need a girlfriend with shedloads of cash, Mega.

If cars are your passion - and from the pics of your 320 I know they are - then it isn't too much. The only question is if you should cut back for a few years and buy a house, be boring etc etc.
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      06-13-2012, 10:16 AM   #17
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I'm trying to follow the maths here.

I'm sure you said before your earned 40k a year. That would mean you would bank about 29k from that.

After you have paid your car and running costs that leaves 16k.

Saving 12k a year would leave 4k a year to pay for everything else.

I posted a thread a while ago that the BBC put out about families living a good lifestyle on a combined 40k a year.

I asked the question how they manage as I couldn't work out how 40k could cover a big mortgage, 2 cars, children, social activities and nice holidays.

Maybe some people are just a lot better with cash than me but I don't have the lifestyle of people earning far less than me.
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      06-13-2012, 10:28 AM   #18
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http://www.bbc.co.uk/news/magazine-15197860

Here is the link here.

I've no idea how they came up with the average spending amounts as a lot seem to be underplayed to me.

How can the average mortgage and council payment be so low?
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      06-13-2012, 10:34 AM   #19
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Can you get 2 - 3 decent holidays for 4k? Where at, Butlins? I'm not sure you can get one decent holiday for 4k these days.
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      06-13-2012, 11:15 AM   #20
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Xenon, 2k per head for a holiday must get you to some pretty fancy places? I don't think i've even spent a grand on a holiday in europe. Granted its not 3 weeks in Australia but define decent?
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      06-13-2012, 11:21 AM   #21
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Quote:
Originally Posted by LexS View Post
Xenon, 2k per head for a holiday must get you to some pretty fancy places? I don't think i've even spent a grand on a holiday in europe. Granted its not 3 weeks in Australia but define decent?
For a holiday, yes.
The point was 4k for 2-3 holidays per annum.
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      06-13-2012, 11:29 AM   #22
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Fair enough but 4k should be more than enough, shouldn't it? I went away 3 times for a week a piece last year for 2300 total.
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