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

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

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.

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