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

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

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.

that "12x" presumption takes a very comfortable and simplistic approach on the matter in the sense that it assumed:-
1. the entire purchase price of the car is to be settled within a period of 12 months as opposed to the 7 or 9 years tenure; and
2. all your generated income for the entire year goes into car loan repayment only (which isn't realistic).

therefore i find that the "12x" presumption is a very unreliable notion to determine whether an individual can afford to buy a certain car at a particular price point.

take for example an Axia at RRP of RM22,990.00 @ 2.40% interest for a tenure of 7 years. the monthly loan repayment should be at around RM320.00. the maximum amount spent on car loan repayment should not exceed 30% of your net monthly income therefore by theory, you should be able to buy an Axia if you are earning the minimum wage here in Malaysia - that's why Perodua priced the Axia at that price point.

this is of course assuming that you do NOT save any of your income and spent every thing which is highly not advisable - for good measure, always adopt the 50/20/30 rule and tweak it to suit your lifestyle.

RM260,000.00 for a car IS expensive because you'll need an average of RM11,000.00 (after tax) monthly income to afford it comfortably. Read up on the recent economy study of income distribution here in Malaysia, majority of Malaysians are still in the M40 region (meaning we are all getting by "just okay". there is only a handful that are in the T20 group.

i don't think you "got it!".

owning a RM260,000.00 car with a 90% loan will commit you to at least RM3,200.00 monthly repayment and if you have RM7,500.00 net monthly income, that is already about 42% of your entire active income - that kind of ratio is to be avoided at all costs.

after deducting your monthly car loan repayment, the disposal income you are left with is about RM4,300.00. bear in mind, this RM4,300.00 is not yet inclusive of your other necessity financial commitments (eg: housing loans, utilities, management fees, sinking funds, insurance etc).

assuming these vicissitudes of life takes up only 30% of the RM4,300.00 then you'll be left with about RM3,000.00 monthly and this will be your "life support fund", the funds you need to basically stay alive, that loosely translates to about less than a hundred daily.

what can you do with about a hundred a day with today's cost of living?

driving a premium luxury sedan and eating nasi kandar with only curry sauce and one piece chicken isn't the lifestyle premium car manufacturers envisioned their clientele to be comprised of.

a RM7,500.00 net monthly income will only put you within the RM140,000.00 - RM180,000.00 range - anymore, you'll be sacrificing other parts of your life.

it's very tempting wanting to own a premium luxury sedan but if you ended up sacrificing all the creature comforts that makes life comfortable, it's wrong.

only if you don't foresee that you may need that large chuck of money anytime soon - car loans are not flexi property loans so once you pay it off, it's off the grid and you will never be able to sell the car for a profit therefore in economic sense, it's never a good idea to buy your cars (which are depreciative assets) with cash.

having the sufficient amount of cash to pay off your car loan kept in the bank however is a different thing altogether.

in fact, nothing other than a basic car (save for some exceptions) is known as a commodity because they just make you lose money over time and eventually lose all of its residual value.

That works.

THats why I bought my house 3 yrs ago.

3 yrs later my increment since then is enough to cover the monthly mortgage

yes.

what you are asking now is basically the same question you were asking previously, just in different context. it's not another thought, it's the same train of thought.

in conclusion, you will never be able to buy a RM260,000.00 car with a meager monthly salary of RM7,500.00 because no finance company will loan you money.

If you ask in serious kopitiam, we will give u a fair answer. I find salary x12 is a good formula to follow.

Another one i like is, you drive the car, don't let the car drive you. As long as it can move you and don't give you trouble, don't spend your entire life enjoyment into it.

Maintenance is another cost. A lot of people don't know before buying a car and got even stressed out after knowing the cost of the parts, notably european cars. They are meant for people who are rich to change every 5 years.

When you are buying cars above 200k, you should already having around 100k of free flow cash (based on my observation from the owners). No point squeezing money to buy luxury car with limited salary.

Don't compare with those fresh grads buying vios or full spec myvi, there are a lot of parts you cant see. Maybe their parents are rich and did a lot of down payment. What you see is just they drive their fancy new car, you don't know if they can only afford bread everyday. I have a friend buy a myvi and can only afford mamak everyday, while another one buys bezza and the money flows freely. Can buy new laptop, can buy new pc, can go vacation, order as he wish in expensive restaurant and etc.

You can do anything you want if you treasure your car very much, but when u ask in serious kopitiam, we give u safe and fair answer.

I personally thinks 200k can buy half of the house already in some places, i like house more than car. car value depreciate very fast. at the end of the day, it moves me. no revolutionary technology like changing smartphone every 3 years. still gasoline engine.

yes but actually no.

practically speaking, there is a social status that you need to maintain when you are earning a certain amount of monthly salary because study shows that for the majority of people, their expenses increase linearly towards their earnings.

you will be inclined to go for a RM13.50 cup of coffee and no longer the RM1.50 when you are earning RM8,000.00 monthly - human behavior always predicts improvement of standard of living whenever possible.

therefore i wouldn't really agree that there will not be a change in lifestyle - if you can maintain your standard of lifestyle at RM5,000.00 when you are earning RM8,000.00 then there is definitely something that you have sacrificed (whether tangible, perceivable or not).

the law of physics cannot be denied.

this is how u calculate:

car: 260k
down payment: 10% @ RM 26k
financing: RM 234k
tenure: 9 yrs
interest rate: 3% (assume)
monthly: RM 2,750

so u only need a salary of RM3k u can surely buy a rm260k car 

dun listen to haters. listen to your inner want

surely your salary will incresae every year ma

by the time u finish pay, ur slary must have grow from rm3k to rm 8k liao

Frankly, you should be earning RM130k per year, MINIMUM. No ifs, no buts.

+1

TS should listen to us old timers...

Those newly registered dupes are just trying to cramp his style by pouring cold water.......

Ofcourse 2 opinions la.

Buy or No buy ....

Anyway... YOLO man... I also just bought a 260k car for my mother...

as someone already pointed out the monthly payment for a 9 year loan is 2.7k, if your average monthly salary is 10k, it *should* be OK. But this is bare minimum, because at RM10k salary, your take home pay is around RM8k only. After you pay your car, you will need to pay for maintenance and ownership costs. You're lucky if you're left with RM5k, which is not much if you have a property or a family to feed. Even if you don't, you'll be looking at lifestyle expenses, eg mobile service, internet service, insurance, rent, etc.

Don't forget, the car is going to cost you a lot more the longer you own it. You will feel A LOT more comfortable buying a car around the RM130k range with a 5 year loan. That's what it is, isn't it? What are you more comfortable with? Are you comfortable staking 9 years of your life on a car? If yes, then go ahead, if not, then downscale.

all posts made my other members here do really sound like people who have done it, tried it, and looked back and very definitely will question them self after 5 years/time to change new car: "was it worth it? was that past 5 years of "enjoyment" worth the amount of money spent? ie.for sure you will lose a higher grand total for these cars"

i won't add anymore calculations as i really feel it's pointless and only yourself can decide, but i can tell you - i am still in touch with my childhood friend who conveniently is a luxury car sales advisor, and a very successful 1 at it (from guesstimate, confirm above 15k net monthly excluding quarterly sales bonus)

pretty sure he wouldn't like this being shared publicly as this really is against the company's privacy agreements:
he works at a very famous AD which, and he shared before, in the past 1 year a shockingly huge amount of his centre's clientele are people who earns LESSER than 10k nett aims at cars in 200-300k range, while those who buys 350-450k car are people who earns 20k~ nett.

While it's true that almost all customers who buys 500k~ range cars(s-class,740, actual peformance cars etc) are businessman either for tax purposes/fleet cars/management cars OR are people who is obviously rich and can afford such car like how a fresh grad can afford an ex5 motor.

take it as how you like, but the general perception he shared is, people who buys sub 300k car (c-class/3series) are people who can barely afford it, but still die die want to sacrifice their lifestyle just to get that car.

my personal advice? Don't buy the entree level of luxury brands, if you really want to enjoy what luxury cars have to offer - wait until you truly can afford it, aim for the middle-ground (commonly in 350-380k range is a good start), and when you are starting to look at cars in 350k price range, you should already be in a matured enough mindset to make your own call of "can i afford it?"
**ps- yes people who earns lesser then 10k nett DID get their loans from what he told me, it's not impossible, but at least be very close to the 10k mark la of course, not 5k nett.

Coming from a car seller, selling RM 260k over cars are quite common.

And probably half of the buyers of those RM 260k cars dont earn 20k a month as other forumers said. Most of them earn 8-10k but there are some of those that earn up to 20k.

What im saying is, almost all of my customers, and people, dont follow the 12x salary rule.
Im not saying its not a good rule of thumb, but thats just how society is.

I bought a 238K car with 10% downpayment 6 years ago when my salary was RM8K. Still driving it and still can afford a baby and travel overseas (i.e. Japan) every year. Of coz my salary increase over the 6 years period also.

Some times, u need to take the risk and go for it. Then it will be your motivation to work harder....else u need to sell the car and no face.

True Story...

Purely personal opinion:

I would not buy a RM260K car unless I was pulling in RM300K per year.

And even if I was pulling in RM300K per year, I would buy a Camry, and throw all the "excess" money into stocks or property or land or small business or something like that.

A car is not only a depreciating asset, it is going to bleed you cash in the future. If I am going to lose cash, I'd rather lose it on something that also has a good chance of actually appreciating and may even allow me to pay cash for the RM260K car in the future.

But that's just my thought lar. I am still driving freaking 15 year old Proton whenever I am back in Malaysia, so maybe I shouldn't be talking here. Of course, my one claim to fame or my /k credential would be that I paid RM1.2 million cash for a luxury apartment and have another RM200K set aside for reno and furniture once it is built up. No loans, the bank does not earn 4% interest off of me.

Maybe I will buy a nice car in a year or two.... or maybe not. I find that once I have reached a position where I can afford a really nice car (you know, the cars all youngsters, like we all were once, used to stare gobsmacked at and talk about like it was their second greatest fantasy come true....), I actually lose all urge to buy it. Like when I reach the stage I can afford a 5 series or an E-class, I no longer care about buying one. Or when I reached the income level where I can afford to borrow money to buy a Panamera, suddenly, owning a Porsche has completely lost its luster.

Unless cars are your one and only life hobby, the only thing that would give meaning to your life other than family and work, don't go and blow unnecessary money on a machine that will wring you further dry through its lifetime.

tell this to Bobby Ang and he's willing to take you to Europe and back just to argue that a car has the same utility as a house

Yes, and so is the insurance, tyres, petrol consumptiom

But lets not complicate things further

With just rm3k salary, u too can buy rm260k car