20k income, what car should they use? 
Dec 16 2017, 08:23 AM
QUOTE(KLboy92 @ Dec 16 2017, 03:23 AM)
A 360k car is the highest limit
Rules*: never spend more than 25% of your salary on transport, never spend more than 1/2 your transport bill on purchase price, and never buy a car on instalment more than 3 years
Maths: 20k x 36 months x 1/2 = 360k
That should be enough for a decent BMW. Of course, the less you spend, the better your retirement, the more you have for famiy and reserve/emergency. There's absolutely nothing wrong with earning 20k and driving a Civic or CRV.
*rules are optional and based on your own budget balancing between necessity, future and immediate enjoyment. Some other rules could also be:
Never spend more than 10% annual salary on a car; 20k x 36 months x 10% = 72k car
Never spend more than 1 months salary on a car; 20k x 3 years = 60k car
Never take a loan for a car, pay for it within 1 years' salary; 20k x 12 months x 25% x 1/2 = 30k car
wasn't there a forummer that did a chart on car ownership and maintenance? Rules*: never spend more than 25% of your salary on transport, never spend more than 1/2 your transport bill on purchase price, and never buy a car on instalment more than 3 years
Maths: 20k x 36 months x 1/2 = 360k
That should be enough for a decent BMW. Of course, the less you spend, the better your retirement, the more you have for famiy and reserve/emergency. There's absolutely nothing wrong with earning 20k and driving a Civic or CRV.
*rules are optional and based on your own budget balancing between necessity, future and immediate enjoyment. Some other rules could also be:
Never spend more than 10% annual salary on a car; 20k x 36 months x 10% = 72k car
Never spend more than 1 months salary on a car; 20k x 3 years = 60k car
Never take a loan for a car, pay for it within 1 years' salary; 20k x 12 months x 25% x 1/2 = 30k car
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