Since they say don't have big head don't wear so big hat, so when buy car, how much salary is consider big enough head to buy 260k car assuming 10% downpayment?

If too small head and buy expensive car I think salesman also laugh you.

Please advice realistically cos I expect some ppl will say income 1 million and other troll post.. but this is serious kopitiam.

The car you can afford is your current salary x 12

if you are asking this question, you can't afford it.

So according to this, to afford a rm260k car, you need a salary of rm21,666.66 per month.

Yes... else will be like the ridsect woman honda city case...

My opinion is car cost should not exceed 6-12 months of our pay.

Get ready with 5 months of instalment and a can of Ridsect

which case are you referring to?

for a person going to buy 200K++ car
they dont pay 10% downpayment
they pay whole lot more.

25k /month is a good number to start provided ur debt ( cc debt or other loan not alot )

I always wonder when people mention about salary in the context of financial planning, are you referring to net income or gross income ? Gross income of 22k net could like RM17k?

I always refer to gross income. Not just tax and EPF, but insurance, loans, and other commitments should be also be taken into account, and carefully weighed by each individual on a case by case basis.

Realistically, there is no fixed ratio as to what is deemed to be affordable - affordability depends on each individuals however there is a general rule to refer and that is your car payment installment should not be more than 30% of your net income however the flaw of this general rule is that the individual is assumed to NOT save any part of his/her income at all.

Let's just go through briefly on numbers for a better perspective.

If you are talking about a RM260,000.00 car, a 90% loan @ 2.40% interest p.a. for a tenure of 7 years would generate a total repayment of slightly short of RM40,000.00 annually - that would be about RM3,200.00 monthly.

Mind though, this annual projected figure has yet to take into account the maintenance costs for wear and tear which if the car you are looking at has a RRP of RM260,000.00, it is best to set aside 3% - 5% monthly of the RRP for these. Taking the median of 4%, you'll need to set aside close to RM10,000.00 annually.

Ideally if you want to drive a RM260,000.00 car comfortably then you should at least generate RM133,000.00 annual income which translates to about RM11,000.00 monthly salary (this figure is net by the way).

So yeah, most Malaysians are generally living beyond their means and does not consider saving for rainy days. Such is the culture currently.

For me, max price of the car = a year's salary. My current car = 50% of my annual salary.

Btw TS, what makes you think people who drive a 260k car, bought it at that price? Rich people have... ways to stay rich instead of paying off a car they can barely afford.

yeap around there. don't forget tire also more expensive. road tax insurance also more expensive. some parts not covered by warranty also.

My opinion is don't spend more than 10% of your income on car installment. And the down payment should not be more than 10% of your net worth.

To buy a 260K car, your need 260K net worth or more, and monthly income of 35K or more (if you only pay 10% of down payment).

I pay 0 car installment and my clunky junk car residue value is not even 1% of my net worth. No motivation to buy a new car, take MTR and Grab is better. I prefer to spend the car installment on good vacations.

Your salary > 10% dp

12 months salary min because need to include maintenance and other expenses. Plan properly. Otherwise if u stuck, bank will repo the car.

Yes, that’s the formula.

what kind of joke is this? Can elaborate?