Feb 6 2024, 09:37 AM
QUOTE(zzzxtreme @ Feb 5 2024, 06:38 PM)
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 ?
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.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 ?
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.
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