The 1 year salary rule is a good rule of thumb. Young people starting out can exceed that a bit, maybe 14-15 months but as u grow older n salary increase u should aim for lower, ideally much lower.

Im in my late 40s n I hv practice this rule in my life and I continue to improve. I'm glad to say that I hv never feel pain or stress to pay for monthly car installment n car insurance. My last car purchase was a second hand car which costs 4 months my gross salary then.

So to answer the Q,, personally, when my salary is more than 50k a month I may buy a 260k car. I know most ppl will buy with much less salary than that, whatever they can get finance approval.

This post has been edited by Cubalagi: May 28 2019, 02:46 AM

Based on ppl I know and the cars I see on the road, only a small minority of people follow this. Many live life by their monthly paychecks.

But ppl who follow, chances are they will be quite financially isecure. That feeling of financial security is a great feeling, better than any new car.

Buy something like a new pair of office shoes then.. Far less financially damaging than a car. Also gets u to work. 😂

This post has been edited by Cubalagi: May 30 2019, 02:20 AM

With 20k it's close but still not advisable.

My rough calculation..

At that salary ur tax rate is probably around 20%. Deduct Epf 11%.so nett left is about 14k.

The car with monthly payments, patrol, toll n insurance, that's more than 4k. (I'm assuming 10% dp n 7 year loan). Left with about 10k.

What about housing, electricity, water, internet? 20k salary cannot live in rumah murah. So maybe another 4k. Left with about 6k. That 6k is for normal spending, medical insurance and save for holiday. If family also childcare, n maid. Enough? Maybe, but what about additional savings for rainy day n retirement?

So go for much cheaper car.. Maybe 160k range. Enough for Gaya purpose. U get 1k+ extra, maybe can save.

This post has been edited by Cubalagi: May 31 2019, 01:49 AM

Alternatively, like me, buy the 260k car a few years down the road, second hand. Let the first buyer take the bulk of depreciation costs and I'm still within my 12 months limit. N still enough Gaya, coz Malaysians tend to be more impressed with the badge, not necessarily must be the latest n newest.



This post has been edited by Cubalagi: May 31 2019, 03:47 PM

Don't follow most ppl. Follow the small minority of ppl who have achieved financial security in life.

Since I started work years ago, I follow the "not more than 12 months salary" rule in buying cars. Its not the most scientific financial planing rule, but it's simple to remember. And I think it's good, I do get to upgrade cars. Only it''s at a slower pace than some of my friends tho. The impact is that car expenses have never been a headache for me.

When first starting career you can be a bit flexible, n exceed a bit. But as you get older and salary grows, then need to target lower and lower. My current car was bought at less than 6 months gross salary then.

P/S I'm unker in mid 40s.

This post has been edited by Cubalagi: Sep 8 2019, 12:54 PM