hi guys. I've tried researching for car affordability articles.

a US-centric article says 20/3/8 rule - meaning 20% downpayment, 3 years to pay off, and monthly payment 8% of gross income

if "convert" to Malaysian salary and prices, a person earning RM10K can "only" afford a RM34,648 car.

it's generally a good advice, but skewed because of different standard of living and car prices/salary ratio. it makes sense for americans, because a US$34,648 car is considered pretty good

does anyone have advice on a "rule" for malaysian earner buying malaysian car ?

not a rule per say, but try to set a budget of 6 - 12 months of your pay (where in that scale is really up to your comfort). ie if earn 10K, then 60K rm to 120K rm for your car.

then as you start to get wealthier, set a budget of like 3 to 5% of your networth.

no right or wrong... just got which allow you better chance to accumulate faster wealth as car is really an expense for most people.

thanks. the 6-12x guide is good one

save until got enough...pay cash for a myvi...

or alza for family car...

I quite like the 1 year salary rule. Easy to remember.

I adopted this rule since the first car i bought after working, aeons ago.

My version though, is my own variant. The main thing is that the 1 year is a target , not to exceed but to push as low as possible.

So far this simple rule has made me quite prudent in buying cars and I havent had a stress feeling of paying for a car for a long time. I know people who get financial stress during insurance renewal time or when facing big repairs.

For my first car, my salary I include my annual bonus.

Second car just salary 12 months exclude bonus.

Then later 12 months net salary.

Even later, less than 12 months.

Now if I buy a car, it will probably be not more than 6 months of my net salary.

This post has been edited by Cubalagi: Feb 5 2024, 09:22 PM

if Poor,
5 years loan installment


if RIch
9 Years installment.

You check first see got banks want to do 3y car loan or not. If yes compare the interest to let's say 5y loan. Mine 4y also they dun want.

very similar thought process as mine back when I was working...

Just to share. After retirement, I modified the soft rule to 3 to 5% of networth, as passive income replaces active income. 4% is a good standard for passive income from networth.
But in reality, I don't think it will come near 2% also if i am to buy a new car today.

I havent really thougnt about buying car during retirement.

But not more than 4% sounds reasonable.

I do expect at least a 1 time car replacement to be needed during retirement time.

Buying a new car that doesnt cost more than one’s 1 year annual gross salary sounds plausible. At a max 5-year HP loan.

i would separate my funds into 4 buckets... not % nerworth

comfy living + medical + contingency + discretionary

discretionary will be for your holidays, cars, toys, etc... this way i can blow it all on a macan and world tour, etc...

your limit to 4% means your kids can start their retirement right after you gg... hahaha

i had a 2-yr loan...

US is different because their cars are really cheap, for example you can get a BMW for around 40k, so for someone earning 100k a year that's 3 months salary.

I see in general for MY people use 12x salary as the max limit as what you can and should not spend more on for a car.

Another way is to consider the 50/30/20 rule, 50% of your money toward needs, 30% toward wants, and 20% toward savings.

So if you consider your car part of the 50%, how much would you have after the other needs are met is what you can afford to spend on the car.

this should be terbalik la..... if rich then cash oledi. only poor take 9 years loan.

5 years for poor to prevent over debt, over spent


9 years for rich because math.


when u rich, if.

u know

get your head checked.

debt = leverage (moneymaker)

debt = deficit (moneyslave)


u guys have alot to learn

kaki kong kaki song.

how about you buy whatever car you think you can afford.

if cannot pay off/survive, its a you problem

if can pay off/survive comfortably, you win


either way youre gonna learn a lil bit more about yourself

he's not wrong assuming the money that's freed up can be invested in something that guaranteed to have annual profit that covers the interest charged by bank

but thing is, what investment can be guaranteed to cover the interest?

coming back to the question, bcos dollar-to-dollar, our spending power for essentials (groceries, medical bills) is weaker than americans, you can argue that we should spend lesser on cars (dollar-to-dollar) than americans due to our weak currency

This post has been edited by Medufsaid: Feb 6 2024, 10:56 AM

memang pun, our purchasing power is really weak!

yet you see so many new cars on the road.
and it is record year over and over again.... hahaha

Because, the rich are really rich
corruption and GLC projects


and the middle class, trying to be "rich"
hence ambik loan beyond their means


and lower class has to buy a car to commute
hence loan kat ah long!

Majority of Msian lives on hutang aje

But then when really looking at more cars on the road, its population growth as well.
One can have 10 cars, but could only drive one at a time, kan!

Fuyoh. Which bank was this?

Well if you're working and already invested 20% of your take home pay, buy whatever you can afford after deducting your payment for your needs.
Before I retired, I use bonus to buy car.. if no bonus no car for me. After I retired the car moves twice a week and I'm thinking why not grab.

that is good advice. i shall do some kira-kira

I still need to limit my spending to the conservative side as I am not old enough, and exited the race a bit early vs most people.

As I age above 60s, some of the rules would have to change. like gradually increase the spending limit to 8%, with increments of like 0.25 to 0.5% each year.

The buckets method is also in my mind, especially to carve out for inheritance.