we all know that best formula for cars is the car price should not exceed your annual salary . eg : 5k salary = 60k car


however are there any instances that you bought a car that is more than this formula? for example putting a higher DP to reduce the car price, etc ?

anyone can share experience, do you regret it? or you happy with your decision?

For me is a different formula, i buy a car that i have the ability to pay of instantly for whatever reason if needed i.e lost of income , ability to work, lost your job.

Alot of people take into account what they can afford now based on something that they "think" will be there in the future like your job/income.

Playing field has changed now... it's no longer who has the bigger car/balls on the road but who still has the ability to drive around and have ability to sustain a car amidst all the noise out there...

Yup, we cannot predict what will happen next in our life.

Better settle of debt fast and not accumulate new debts unnecessarily.

This post has been edited by GOPI56: Jan 29 2024, 08:40 AM

You still can pay your car loan when you loss your income.
not how much you earn per month, bad time happen.
but house loan is killing us.

This post has been edited by wong_86: Jan 29 2024, 08:44 AM

Some people are way out of comfort zone... and streatch it 18 months and beyond.

Cant blame them because salary is not keeping and catching up with increasing cost of things

So car price = 12 x monthly gross salary? Or x 24 or...?

yes, 7k salary buy alphard 9 years loan
why? family needs and they rejected all other affordable options
happy but there are lessons learned from this purchase.
if you can, get a trusted mechanic to inspect the car. for recond cars, there may be hidden issues which amateurs like most of us will not be able to detect
the odometer showed 4k only and still had "new" car smell lingering

problems detected after a few years:
rust under paint and the paint peel off and some parts faded. i never managed to solve this effectively, did 3 times full car spray over 10+ years
aircon compressor needs to be replaced, according to aircon shop, this happens only after 30k usage. at the time the car only ran for 15k maybe?
if i recall, i was given quite used/worn tyres and had to change all 4 within a year
kena con many times for overpriced service because dunno anything, air filter was never changed for almost 10 years... all the mechanics just did the normal blow off with pressured air

Use to think just get 9 years loan for a car...but nowadays 5 years cukup. If 20% of my salary can pay for the car for a 5 years loan + MAINTENANCE + REPAIR + INSURANCE + ROAD TAX then I'll go ahead.

Wadepak.. how u afford alphard?? I earn more than you didnt even consider alphard..cannot afford

1st time heard A/C compressor need replaced every 30k. Bro, he is rubbishing you.
What you need is an A/C shop which can service/flush your A/C system using machine nowadays. No need replace whole compressor, but service change the compressor PAG oil, which i think most Toyota is using ND8 (PAG46) compressor oil. (Except hybrid must use special compressor oil) If your driving a lot in city traffic jam, mostly need to service/flush yearly or around 10~15000km max. If not, every 2 years or 30~40000km service flush also sufficient.

This post has been edited by littlefire: Jan 29 2024, 09:41 AM

Buy cash outright, though now I think 5 year loan is best-provided you have the means to buy cash. If not, don't even think about buying it. 5 year loan at 2.7% vs investment, min 3% P.A. This is the best. If put cash down fully-loose out the method of obtaining more funds rather than diverted to depreciating asset (car).

Buy a car based on what you have in your savings. Maybe twice the amount of the car in your savings.
Can't depends on salary as everyone in the workforce are easily dispensable nowadays.

if 60k annual, better look for 6k~12k car with cash
I read Mr Stingy last time, and decided that I really couldn't afford anything new, see below


some ppl think I loan the car 5 years, mean I can 'afford' a car that's worth my 5 year salary combined
so, 60k * 5 = 240k so they go buy anything they think they can 'afford'... until it got stolen

example:
- imagine buy car worth 120k, 5 yr loan, monthly ~2k (not incl interest)
- tolak 1 year loan 24k = 96k balance
- 70% insurance payout after 1 year means 84k
- still owe bank 10k in cash for full settlement
- 1 year lose 34k to a stolen car

The car that’s under my name (for my mother, mainly) is paid for with cash. I just put aside a little bit every month for five or six years and combine that with the resale of the prior car (which is usually decent). Not a fancy car so not a huge financial strain, nor will LHDN seek to call me for coffee.

My daily driver is slightly more upscale but it’s leased (Kinto subscription) under my company. Less headache since one monthly payment covers everything from insurance to servicing to tyres. Also improves the company’s “creditworthiness” a bit I suppose.

This post has been edited by dev/numb: Jan 29 2024, 02:05 PM

There is no golden ratio, only total capacity one can handle.

Regardless how much we earn
- egg cost the same
- roti canai cost the same
- petrol cost the same
- utility cost the same
once can go for premium service, but the baseline is the same for everyone to basically survive.

Ask someone with 1500 per month to buy 18k used car base on 12 months guideline will kill the person
Someone that make 100k per month can spend 50k installment on multiple cars, who are we to judge him/her? After deduct tax and installment, still can make a decent life.

You know what you can/can't afford.

This post has been edited by constant_weight: Jan 29 2024, 11:38 AM

Imo net monthly salary x12 is a better gauge of what car you can afford

Buy car price not more than your annual salary just a simple reference so you don't overcommit to the car.

If your annual salary is low but you have tons of saving that can cash out the car u bought although it is already over your annual salary, you can still buy it.

The key is how much u can afford a car without it taking a big chunk out of your income/savings.

If there is people with 3k salary went for 100k car, by all means if they do not have any commitment or future plan, doable but not a wise thing to do in life. But hey if you have a dream to own 100k car and willing to sacrifice your entire saving for it and face the consequences, why not?

Fair enough. There are many with such belief. Spend now, worry later.
No savings meant for post retirement era. Nothing for rainy days.

yes and no regrets. even if yes, also pointless.
gain some lose some

I am happy and grateful with the entire journey from then until today.



#MeToo 9 year loan. until 2027 to kaotim, but hopefully my plan and goals will work and can settle it a year or 2 earlier.

yeah i knew i couldn't afford my car but i still went with it anyways
at least i'm well aware of my action and the consequences, and some how i managed to pull through. numerous close calls and many hurdles over the 6+ years, but nonetheless still surviving

thanks . i'm contemplating to buy a car that a bit higher than my budget.

yesterday my north south journey bring my ol dad. felt so kesian. although the journey was smooth, but many traffic jam, old car no ACC/ICC , so tired liao.

Plus the weather is scorching hot, tinted oso no use, current car no back aircond vent . also its a hatchback so back passenger is not comfortable . with all the luggages / wheelchairs around.

sometimes i oso wonder if we being frugal so much is ok . oh well

Back to basics..... buy what you NEED, not what you WANT

And of course within your budget / affordability

Since its for your dad comfort, then there's some reason for you there to need a new ride, next its all depending on your affordability. If in anycase you decide to go beyond the budget, that's already entering the 'want' zone. You want a certain brand, certain features etc

This post has been edited by ZeneticX: Jan 29 2024, 03:21 PM

I agree with the majority of the answers here - sensible, down to earth answers.

Before I acquired my present financial independence/abundance, my first car was a Honda City VTEC in Singapore. It cost me $70,000 (with COE) - this was some 25 or 30 years ago.

The formula I used was indeed the {monthly salary post tax} x 12, and I stretched the loan out to a full 3 years. Wife and I were making, combined, around $7,000/month ($3,500/month each).

Now, my formula is very different. Although (by the Grace of God) we have been blessed financially, I still try to limit my purchases because a car is always a depreciating "asset". So, I now never buy a car that is worth more than 10% of my annual income.

If you look at the cars I've own in recent times: Porsche 911 GTS in Sydney AUD400,000, Porsche Cayenne in Sydney AUD 180,000 (these 2 cars were purchased in the same year, so I would lump the total cost together), Macan in Singapore (with COE) SGD400,000 & Merc W223 S450L in Singapore (with COE) $608,888 - you'll see that there's an upper limit that I've set.

Thus far, I've kept to this limit with strict discipline.

I did promise myself that I will break it for one occasion - and that's when I decide to retire & move over to Australia permanently and hang up my stethoscope for good. I have my eye set on my first Ferrari - the Purosangue, and that retails for AUD750,000 before options - so, with options and after taxes and On Road Costs, I'd be looking at nearly AUD1,000,000. This is more than 10% of my annual income, and after retirement, I'll be relying only on passive returns - that one car will wipe out almost all of my returns for a year.

But, what the hell right, YOLO.

I go by loaned amount, instead of outright car price.

My last car was traded-in at a value of 211k from carsome, and used that money, + ownself topup 50k to get a x5.

Loan 5 year, driving brand new x5, but actually paying cheaper than my friends new honda civic on longer loan tenure.

RV to me is absolutely important because thats how i upgrade car without paying too much, i don’t make half a mil a year, so i plan accordingly to maximise what little i have.

After 5yrs loan finish, i conlanfirm this x5 value will still hold to around 200k+ still.

nobody using ur formula tbh

That may be the case, but it’s actually very sound advice. For those who can adhere to it, they may reap the benefits of greater savings in the long run.

i did what ur last sentence mentioned. so far the car is paying its own installment, and get extra profits for me.
a good work horse

BMW are known to have among the worst RV and most owners will be selling off or trading in their bmw way before end of 5 years warranty period.

That said, there is seriously something wrong with your math. New x5 year 2023 cost around 491k without the extended warranty & service package which most owners will include that will bump up the price to 528k. That means your 5 years loan will be at least 230k(after taking in 211k + 50k) without the extended warranty & service package.

Monthly installment will be around 4.2k for a new x5 year 2023 with 5 years loan tenure with 261k dp and sorry to say a honda civic at 167k with max 9 year loan tenure is definitely still much cheaper compared to what you are paying for a new x5 .

This post has been edited by kirakun: Jan 29 2024, 11:17 PM

#MeToo

The X5 was a sweet ride for the 2 years I owned one (F15 xDrive35i). Took it to Port Dickson, Melaka, KL, JB multiple times with the BMW club in Singapore. Ahh.. good memories and a good choice bro.

the current car I am driving (it is old already now of course), it was around 6 months of salary back then.
and it had served me well even until now.

This post has been edited by Wedchar2912: Jan 29 2024, 11:47 PM

The correct way is the add the maintenance, insurance, RT, fuel and tires into the price of the car divided by the number of years u plan to keep it. From there, the monthly installment will be higher than quoted by the dealer.

The maintenance costs is available from the dealer. Usually up to 5 years. Tires change every 18 months.

Once u have all the numbers, it would easier to allocate a certain amount monthly which covers everything for the X number of years u plan to keep the car.

IINM. The way car loan is calculated means that you end up paying 2.7% x 2 = 5.4%.

So your investment need to guarantee 5.4% return just to break even.

Wow amazing how a stranger here can correct me, on my OWN finances and calculations of my OWN purchase, which I already have for months already. I’m not even going to read into too much of your speculations.

These are all FIRST HAND experiences yet some stranger can tell what I’ve personally gone though is wrong lol - yeap you’re definitely right.

BMW rv worst? You either are not malaysian and don’t know current market trens or you’re not close to owning a bmw (no offence)… i traded in my old bmw and got 200k, which by % wise, no jap car even comes close, unless it’s a market anomaly car like honda civic.

Then need to find investment that is higher in percentage.

This is my formula

Celery 1.5k = axia rahmah
Celery 3k = axia rahmah
Celery 10k = axia rahmah
Celery 30k = axia rahmah

This is the way.
Our junk roads don’t deserve any better.

Appreciate your reply that tried to be funny and edgy but no trolling please. This is not /kopitiam.

This post has been edited by MegaCanonF: Jan 30 2024, 11:29 AM

not trying to argue here, but may I know what's the price of the X5 you bought? 2nd hand? recon?
I mean I genuinely don't understand the 250k and 491k price discrepancy, I don't follow BMW prices, as I doubt I can ever afford 1

what happen to ur jazz?

Same here but easier said than done. For fresh graduates or young working professionals, you have no choice but to take a loan unless the rich parents pay the downpayment and the children just service the monthly loan payments. For the more fortunate, the parents make the full payment for the vehicle so the children does not need to fork out anything.

For people who have worked for a number of years especially the higher-income earners, one can choose to either take the shortest loan available or make full payment without taking any loans. It depends on how a person manages his/her financial as sometimes it can be feasible to take the minimal loan or duration, say RM20k loan for 2 years etc. as the money parked in FD or other investment schemes may have not reached full maturity, and the returns from the FD can be higher than the interest that's paid through the car loan.

This post has been edited by SportyHandling: Jan 30 2024, 12:23 PM

Frankly speaking, if truly own effort earn 10K, 30K and above monthly, should have enough brains to sort out personal finances and buy whatever vehicle wanted.

Its the 1.5K,3K folks stupid enough to pay 3% x 9 years = 27% interest UPFRONT that needs to be reminded of any guidelines.

I know this is meant to be a joke / troll post but seriously if you earn more than 10k and have a family please get a better car instead of confining your love ones to a tin milo

Joke troll aside, I've seen many mansions, stacked bungalows etc (properties that are in million (s) of RM), have a Kancil/Kelisa/Axia or even saga Iswara those sorta cars, parked in under compound lol

Some may be hard to spot as their porch /yard are too huge capable of fitting over 5 cars

Figures speak louder than words. Continue on trolling on yada yada my finance vs your finance. Not that I care of how u work out your finance but as this is a public forum, again your math is seriously wrong. There u go.

Ah on a side note, a 5 years old BMW x5’s rv for reference for those who don’t know how to google but rather talk through their nose lol.

https://www.mudah.my/malaysia/cars-for-sale...2018&q=bmw%20x5

Most likely for the maids / workers. Or just as a simple ride for running errants. I know some who owns really expensive rides and they dont take them everywhere they go, just for some occasions

But again kancil/kelisa/axia/saga may either be for their house maids or workers or belong to them maids/workers? Or for their own kids that just started their own driving life.

Personally do know some parents who came from poor and built their fortune within the lifetime have this kind of mindset that their kids on their very 1st step to drive should start with typical car.

With a few reqs met, i got in in the low 400s. If it’s almost 500k most would just jump ship to porsche already.

Most recent x5 owners i know also won’t be paying the published msrp.

Lol so your so called “googled” figure suddenly made you an expert, hell you probably haven’t even spoken to any conti SA to understand the finer details.

Only people that never owned multiple bmw thinks whatever the googled sticker price is final price, u think buy honda meh.

Again - amusing how you can tell me what I’ve already owned. Drop your insecurities, it’s disgracefully obvious.

Edit: also, just to fuck with you, because your gross lack of understanding on 2nd hand car price, and trends is showing - you’re literally just google & paste. Understand carmake/fl/models plays an extremely important role.

Look at 2020 x5 now, actual selling price is above 250k, this is from dealers mouth, not some mudah/carlist clickbait lowered so ppl can ask, but end selling price is closer to 280~. SO if by your logic, all these 2020 x5’s will suddently drop 100k in value in the next 10months? Lol.. logic la dei if want to google only


This post has been edited by TheOnly: Jan 30 2024, 02:01 PM

Company / fleet discount?

Again still no figures, just talks and more talks and the sound of empty can. Now we are moving to the level of degrading others eh? Unfortunately I ain’t gonna stoop that low so good day lol.

You degraded yourself, only yourself to blame.

Figures? Go re-read my post and actually be out there to talk to actual human instead of googling and jumping to conclusions by ads la.

I'm enjoying the conversation here. Popcorn time.
Everyone is trying real hard to prove/justify how rich they are.

I have a friend who has a BMW (3-series I think) and a RX-7, but daily drives a Savvy

Sorry bud, not everyone la just some and when come to figures kantoi lo. Nevertheless popcorn time is just over haha.


This post has been edited by kirakun: Jan 30 2024, 02:25 PM

Carry on..it’s really nice to read how well to do are some, as you may say

Best answer for me.

Thanks.

I'll think i'll stick to my frugal ways. Oh well. Goodbye my dream car. As good as it is i don't think im able to stomach another 9 year loan for the time being

What dream car u planning to get?

Thanks to you too I got to know about the Nissan Almera Turbo Kuro edition. Otherwise I won't even bother to look at the regular version of the Almera.

Everyone has their own ways of doing things so it's fine. But my advice is try not to go for long loans if possible. I think only the person himself will be aware of his own financial capabilites. Things such as the savings, current job stability, commitments etc. To me, cars are the last on the must-have or dream list since it's a liability and depreciating asset. Get a basic car to move from point A to B within your means. If you have extra money then get something better or the dream car you are eyeing all this while. To me it's not important. Even though you get your dream car today, it will turn to "Besi buruk" one day just to exaggerate as the value plummets by the time you want to sell it you have registered a loss. Better to generate more income and keep it for rainy days especially in this uncertain climate.

I think that’s a wise choice bro.

There’ll always be another opportunity

This post has been edited by hksgmy: Jan 30 2024, 10:28 PM

big family...
it was really a tough time but after finished paying off then enjoyed the car, drove it SG and TH

yalor, sure kena con because really dunno anything
only know that recon cars sure got hidden issues...

I know its silly but its the current hrv turbo. Its the perfect car for me .

However need to wait another 4-5 years before can comfortably afford it. But by then, maybe the model is no more hahaha

Just like how civic ketam is unobtainable anymore thru official means ( yes 2nd hand can but dont want be waterfish)

Honestly, unker never needed any formula when i last purchased my 2010 Vios. My last car paid off and traded in with new car. Continue to another 9 years of installment, this was when unker was young that time and has no family yet. Now fast forward car installment done and never had the thought to upgrade unless or until we are blessed with a child.

IUnkerO all those formula is just guide lines for current generation to look good and know very little about their own finance, but to unker when you need it you will have to get it. Be it recon or 2nd hand, priority takes precedence and anything else is a "want" for unker. Also unker view car as a tools and not more than that.

So to answer TS questions, unker willing to use this "formula" for my next purchase of family car "6mths x salary" max and wont be putting extra 1cent as down payment and take perhaps 5-7 years of loan.

Except that it is really not a joke or troll. It really is my formula. I never inflate my lifestyle. Thats how i build multimillion dollar portfolio for FIRE.

2 kids later, I'm still driving my 2011 city though

what is your current ride and family setup?

Mine?

Macan SUV & Merc W223 S450L sedan in Singapore

Cayenne 9YA & 911 Carrera 992 GTS in Sydney

Married, no kids but plenty of nieces and nephews that fight to sit in the 911.

Nay, TS.
I may not remember the details but i know you are on a different scale than most. Lol.

Oh, ok. No worries then

Jazz 2014 n 3 adult , 1 elderly.

Thinking of letting go of the car before more wear and tear after 10 year mark

3 adult? Your kid grown? I think I saw you said wheelchair as well? Can always opt for alza for your needs.

Bro, I think I also remembered you writing about how harsh the ride can feel for your elderly folks when balik kampung time... forgive me if I recalled incorrectly.

Might not be a bad idea to get an upgrade if you intend to do much long distance drive, should the opportunity and finances present themselves favourably.

All the best!

yes , not kid but elderly. we have no kids yet .

yup you are right . yeah that is why i'm racking my brain thinking about it.

2014 jazz. Did you replace your absorbers already? Sure la bigger car more comfortable but you could at least make it better, closer to new

There is an answer to your question.

It's known as a budget which keeps track of your financial activities.

Then you can answer the question whether you need to be frugal or not.

But it takes discipline, because there are no quick answers. Just because there is an annual salary formula doesn't means it's going to work for you..

This post has been edited by howszat: Feb 2 2024, 11:43 PM

Not yet. Do you have experience replacing it?

Ayam thinking bout it, but sked spent too much for this car ady

I replaced mine twice. 2011 city. Once on 6th year using other brand. Last year, year 12 changed to original showa brand. About 1.7-1.8k. They say comfort better change ori.

When I buy this car I know for sure I will be using it for at least 10 years. Now the plan is to drive it at least 3-4 more years. I have something else going in my life.

My current salary, many people would have upgraded at least twice by now. But I get comfortable not paying car loan for so many years now. It’s also one of the reason why I persist to maintain the car well, including it’s paint. A lot of ppl just spew out standard answer, saying old car not reliable. Of course they just change engine oil and think all will go well. There is such thing call preventive maintenance. They forgot to fact that a new car still need to go SC twice a year. I use a fraction of that money to upkeep the old car instead.

So worth it or not depends on you. But sometimes we want what the heart wants. So depends on you.

For me, I’ll drive it for few more years and then buy a 2nd hand Toyota and that will be my last car. If I can still drive at old age, I’ll buy another local cheap new car like axia or persona and that would be it.

I think you're on to a winning formula. I don't have the same mentality of my cars here in Singapore (because of the COE, ARF, PARF, OMV and the rest of the contents of the can of alphabet soup that the Singaporean government throws into the mix) as I usually drive it for a max of 5 years or so, then sell it off before I lose all the additional value added money - BUT, for my cars in Sydney, I intend to drive them till the wheels fall off. I've signed on factory warranty extensions for both the Porsches, and I've gotten them PPF'ed - so they'll look and feel new for as long as possible.

The feeling of being debt free > all.