What percentage of your take home income did you spend on your car?

I'm curious how much post tax money people spend on a car. I'm wrestling with the time investment required to upgrade mine.

If you want to provide extra info outside of the poll for discussion, what is your salary/car value/years owned?
For me it's 160k(+board)/$500(paid 1k)/10yrs.

Considering buying a 30k car but hard to justify 5 months savings on a luxury.

Poll Options Thu, 01/07/2021 - 00:00

  • 10
    I don't own a car.
  • 1
    Work provides my car.
  • 2
    I use my partner's car.
  • 7
    <1%
  • 2
    1-2%
  • 7
    2-5%
  • 9
    5-10%
  • 7
    10-15%
  • 4
    15-20%
  • 4
    20-25%
  • 5
    25-30%
  • 8
    30-40%
  • 1
    40-50?
  • 4
    50-60?
  • 0
    60-70?
  • 0
    70-80?
  • 1
    80-90?
  • 2
    90-100?
  • 26
    >100%???

Comments

  •  

    OP make poll pls

  •  

    1000%

  • +1 vote

    Curious what kind of car you drive thats worth $500 when its only 11 years old?

    • +2 votes

      Nah 10yrs is how long I've owned it.
      It's a 2003 magna wagon.

  • +5 votes

    If it is hard to justify, then you dont really need the car.

    •  

      Yeah that's where I default to which is why I'm driving a rusted out magna on a mining engineer wage. Need a slight upgrade for a side business (requires towing), so the decision is if go bare minimum again or finally get a treat

      • +3 votes

        Safety is a good argument in favour of an upgrade

  • +3 votes

    If I was making $160k I’d probably spend around $43-$45k on a car and another $5k on accessories, would aim to keep it 15 or so years.

    •  

      you'd at least want relatively modern car. spending $20k - $30k on a decent car would hardly hurt you. more of a mindset to me.

      • +5 votes

        Have you looked into cars lately? $20-$30k doesn’t really get you that much.

        •  

          op didnt have much to start with

        • +1 vote

          Depends on your standards but it totally does. I've found a 2017 xrtail, tan leather, sunroof T32 package all in great knick for 30k.
          There's plenty of outbacks and foresters in good condition around that price too.

      •  

        Can I ask what you mean by mindset? It's the part I'm struggling with mostly if I'm honest

        • +1 vote

          Well I guess it means opportunity cost. You could have 5 months savings or you could have a car. What else do you want to do with those savings? Is that savings opportunity worth more to you than the convenience/practicality/minor luxury of the better car?

          I am a good example of going the wrong way with this decision on a lesser scale. 2 years ago I bought a $4k Subaru instead of a $15-20k Territory. The Suby tows my dirt bike, has leather seats and AC. Very comfortable for the price but it's a rare week that I don't think that I should have got the Territory.

          •  

            @Mechz: The Territory would have needed $4k in repairs by now.

          •  

            @Mechz: nothing specifically I would spend the money on due travel restrictions. I'm starting a small business but already have the savings aside for it.
            The main thing for me is time, eg I don't plan to spend my life in mining so that 5 months of savings directly relates to 5 extra months of working for me

            • +1 vote

              @900dollaridoos: That's another opportunity cost, the opportunity of leaving mining to do something you might love better, the cost is the $$$.

  • +3 votes

    creature comforts aside i'd spend a bit more to get the latest safety tech, cars have come a long way and the latest tech can mean life or death for you and your family so i see no reason to scrimp on that. i wouldn't look at it as dropping 30k - if you plan to keep it for 10-15 years you're looking at maybe 1k per year on something that has reasonable resale value + less maintenance/repair cost for a $500 car

    •  

      All good points thanks, only point I would argue is the maintenance. Given it's a nice car I would at a minimum I would have to pay regular servicing and parts.
      My current bomb has never received an official service in the years I've owned it other than for a RWC to transfer interstate. Since buying it the only expenses have been replacing tires, a battery and a $50 fan resistor (installed myself), and the odd home oil change. Being a shit car I can treat it pretty poorly, eg I recently put a massive hole in the oil sump doing some dodgy offroad stuff, limped it to an auto store on spare oil, patched up with epoxy weld and it's still running haha.

      One year of servicing the new car could easy cost more than this past decade of not servicing my current car haha

      • +1 vote

        kudos for doing all that yourself, it saves a lot of $. you can never know though when it will need major repair with a car that old, so it's a bit of a lottery at times. the newer japanese/korean cars with capped service are usually reasonable, at least you know you how much you'll be paying and can be as cheap as 180 per year (toyota)

        •  

          Haha thanks, I'll take the kudos but truth is it's been more laziness and general apathy with some fear of spending thrown in than hard work and savings.
          It's worth noting that RACQ almost certainly has a photo of me on their dartboard too!

          I've never looked at new cars before so hadn't heard of capped servicing, that sounds like an excellent idea.

        • +1 vote

          Major repair just means get another car. In some ways a good excuse for an upgrade.

          I too have owned a bomb. TBH it was so nice not caring about scratches and dents and ever washing it and everything else. I particularly liked parking it in tight spots next to expensive cars that crossed the line - I had no issue parking a few cm from their driver's door.

          •  

            @afoveht: Exactly! I drive in roo country with little stress and park wherever. It's going to be a shame to give that up.
            I wish the parking sentry mode of Tesla's was more common on cars to make shopping centre parks more dependable

  • +2 votes

    Have you seen the advice "Buy the cheapest car your ego can live with" ?

    With rego and fuel don't you pay a lot more than $500 a year on your car ? I don't drive a lot have never had a car loan and my car has now depreciated to the point where the depreciation is only a few hundred a year but I'm pretty sure I spend 2-3K a year on rego, fuel and servicing.

    I bought my car 12 years ago for 14K and it has a few more years in it. I still enjoy driving it.

    Cars tend to be about the most expensive luxury most people buy.

    It might be time for you to buy a new car though.

    •  

      Yes good advice thanks, I tend to agree re ego.
      When I was in uni the common motivation for buying cars was to show off to girls. I always figured you could impress someone way more with 10k worth of dinners holidays etc in a shitty car than commuting in a 10k car haha

      •  

        I always figured you could impress someone way more with 10k worth of dinners holidays etc in a shitty car than commuting in a 10k car haha

        You don't put your $10K dinners on display! You shit it out and you can't exactly reuse it haha

        •  

          Spoken like a true dude! You've never seen a girl's Instagram? ;)

      • +1 vote

        but hey.. at least you'll have a comfortable place to cry if your girl leaves you after the $10k dinner if you buy a nicer car ;D

        • +1 vote

          That is a good point. The car I'm looking at looks excellent for my crying sessions. You might have just sealed the deal for me!

  • +1 vote

    Considering buying a 30k car but hard to justify 5 months savings on a luxury.

    If you're driving around a $500 car right now, then I'd assume you look at a car as nothing more than a "tool" to go from A > B (and there's nothing wrong with that!).

    So is there a reason you're thinking about a $30K car now? Why not just stick with a low value car that'll do the job?

    •  

      I'll adress in two parts if you're interested:

      Firstly, looking at a new car as my current one is exponentially falling apart. New tires, engine work etc. will cost many times more than the value of the car itself. I also need something that can tow for a side business I'm working on, and would benefit greatly from off road ability for national park access as I spend most weekends exploring Queensland.

      As for such a large step up to 30k, the natural progression for my stinginess to meet the above requirements would be a sub $10k beat up 4wd. I struggle to justify that when the likelihood of engine issues and general discomfort will make it an expensive tow bar. 30k seems to be the sweat spot for upgrading to something I would be stoked to use and safe/comfortable enough to last well into the future. There's also probably some greedy cope in there disguised as rationality if I'm being honest 😅

      • +1 vote

        30k seems to be the sweat spot for upgrading to something I would be stoked to use and safe/comfortable enough to last well into the future.

        I think you've just answered your own question from your OP! :p
        Who knows - once you get used to this this upgraded car, you might want to get an even more expensive one. (I can't think of anyone I know who's ever willingly downgraded their vehicle - the next one is always an upgrade).

        •  

          Ah shit, now that's gonna be in my head! That is a very good point though.
          My only counted to it is that if I buy this nicer one, use it ten years, then buy a 8 year old car it will technically be 5 year downgrade at time of intial purchase for both but will feel like a 5 year upgrade as it will be a newer car.

          Not sure if that makes sense… Can't think how else to type it

          • +1 vote

            @900dollaridoos: My 2007 Mitsubishi 380 is the newest car I have owned, and my next car will probably be a 2012. This way I get the pleasure of upgraded tech etc just like people did a decade ago.

            For the record, after driving a brand new A3 my next car was 10yr old Verada. Much happier driving an old cheap car I don’t have to baby, wash, polish and be careful with. And saving $5k a year in depreciation doesn’t hurt.

            But I don’t have any ego tied up in cars, and only drive 10000km a year, so it isn’t important to me.

  • +3 votes

    I pay about $480 a month to lease my car from work, that includes insurance, rego, etc I just pay for my own petrol. It's about 7% of my take home pay.

    •  

      Nice one! I've recently changed companies so I'll have to ask them where they sit on novated lease etc.

      Can I ask what sort of vehicle/year you get for that money? And is it one of those ones that comes out pretax?

      • +1 vote

        It's brand new and you get a choice of cars, mine would cost about $40k if I bought it. It comes out of my post tax pay.

  • +2 votes

    Over time we e upgraded cars for various reasons. The most recent family car was the most expensive at around 1/3 annual combined income, but we had just sold an Investment property and had good cashflow.

    The second car has also been upgraded in value over the years due to increased available cash, but it is less than half the value of the main car and was upgraded for usage.

    FWIW twin can utes started getting much moret car like about 10-12 years ago. Although you are pebbly familiar with them if you’ve been driving work vehicles.

    •  

      Thanks mate, very interesting insight as I'm not at that phase yet (no house or family).
      Yeah utes were a very strong contender for me. I sleep in my car loads though and as cool as a swag on a ute is it's a bit tricky on highways when so many councils are cracking down on camping

      •  

        Thought I’d seen you mention utes somewhere. I do agree that a wagon is a better option for sleeping in and many situations. More secure than a ute too. Add roof racks and you can cart a lot of stuff that won’t fit inside.

        $30k is a decent budget for a used 4wd.

  • +3 votes

    Lol @ thinly veiled humblebrag post. Surely $30k isn’t enough to spend on a high yield investment vehicle to impress your work colleagues?

    • +3 votes

      There's been income polls in past, mine is far from uncommon or even one near the top, so it's not much of a brag.

      I think money is something that should be discussed openly, it's the false modesty and outrage at discussing finance that causes people to have narrow world views and conform to overspending. Surely an anonymous and literal bargain website is the appropriate forum for this??

    • -1 vote

      It's also strange you say I'm a bragger but then point out my budget wouldn't be worth bragging about… Pick one.

      You've worked in the mines too, you should know better than anyone these salaries are temporary.

      • +2 votes

        salaries are temporary.

        1. Put the funds towards a nursing degree
        2. Sit back and watch the dollaridoos roll in
      • +3 votes

        There's been income polls in past

        Yeah, and I'm sure that those are 98% correct. The average take home yearly pay on this site of its user base is north of $100,000+. No one would ever lie on a bargain forum.

        I think money is something that should be discussed openly

        Yes, I think it should be, but not in the context you are doing it. Comparing to your workmates to make a more level playing field, absolutely. On a bargain forum as a flex when it has little to no relevance to the question and then asking everyone to tell you theirs so you can compare, I'm not as convinced.

        I know a lot of people who get paid half of what you get, have more expensive cars but also don't feel the need to talk about their finances with random internet strangers.

        It's also strange you say I'm a bragger

        Correct. There was little to no point in your mentioning how much you earn (or asking people how much they earn) and that you cant justify "spending 5 months savings on a luxury" (my heart bleeds) when most people hardly earn that a year, let alone as savings… in 5 months. And for them, a car would be a necessity, not a luxury.

        then point out my budget wouldn't be worth bragging about

        "</s>" Would that have helped?

        You've worked in the mines too

        I have, and I know that working on mine sites is more about dick swinging than it is about anything else. Who has the biggest house, in the best suburb. Who has the most investment properties. Who drives the biggest ute/4wd. Who has the loudest Harley and the fastest speed boat, the list goes on. So, I wasn't really surprised when I saw that you had snuck in a reference to how much you get paid, considering it seems to be par for the course with mine workers.

        • -2 votes

          There's some serious cognitive dissonance here my guy, you seem more invested in being offended than logical. I'm genuinely losing count of the contradictions.

          No one would ever lie on a bargain forum.

          So why would I pick a mid range, remote aus salary? Once again this is an anonymous forum, if my objective was to gloat, I'd pick something more out of the ordinary.

          when it has little to no relevance to the question

          What could be more relevant when pursuing a bargain/investment than the money you're working with? If the topic was how much you'd spend on a house then a natural progression would be how much deposit you could muster.

          Comparing to your workmates to make a more level playing field

          This is your dumbest statement. You've already said miners waste money on dick measuring vehicles, why would I want to get their advice when my objective is reasonable spending? Of course I'm going to compare with people on a bargain site when I'm looking to save money 🤦‍♂️

          "</s>" Would that have helped?

          Don't pretend you were being sarcastic. Twice now you've said the average individual mining industry car is worth much more. Even by ozbargain standards a 30k car is not something anyone would gloat about.

          I'm disappointed I somehow got dragged into an internet argument on Ozbargain of all places, so I was curious about the type of person disgruntled enough to initiate it and had a squiz at your profile. I'd like to offer an olive branch:
          You seem to love buying lots of Lego, have a look at lepin, when I went through my big Lego Star wars phase I saved thousands by mostly sticking to lepin and their counterparts. The quality was almost indistinguishable from Lego.

          •  

            @900dollaridoos: For those that are wondering

            Cognitive dissonance meaning

            •  

              @MS Paint: Disagreeing with its use or just sharing your research?

              • +1 vote

                @900dollaridoos: I had no idea what it meant

                •  

                  @MS Paint: And old mate has no idea on how to use it other than as an ad hominem. Just heard it one day on AM talk-back radio and thought it sounded cool.

          • +1 vote

            @900dollaridoos:

            when it has little to no relevance to the question

            The first line of your post… great. Excellent question. (The poll is a little silly though… Wider groupings would have had the same clarity and have taken up less space.)

            The rest of the original post was nothing but "Hey, I'm on this much!!, Look at me… How much are you on? Let's compare our wangs" and could have been deleted and have had no change on the initial question you were asking. It served as nothing but a low key humble brag.

            This is your dumbest statement

            No, this is your dumbest point. Talking about how much you get with people within your own industry and work place is a great way of seeing if you are valued by the company or just being taken advantage of. Talking about how much you are getting paid with the "relevant" people is a great idea and why employers hate you doing it (They don't want you knowing that you are on $160k while Joe Smith is on $190k for the same job).

            Talking about how much you earn and how it's such a difficult decision to ponder if you should spend $30k on a car and then making mention that it's only 5 months of "savings" smacks of nothing more than pissing in your own pocket. As I said above, your post could have cut all that humble brag bullshit and still have maintained the same question.

            (I do like how you took another statement unrelated to this part and inserted it. Logical fallacy much??)

            Don't pretend you were being sarcastic.

            It's a reference to a meme… Maybe you are new here. 100% sarcasm. You have read over my entire profile history, you should know it was 100% sarcasm. But I guess sarcasm does go over some people's heads.

            I'd like to offer an olive branch:

            LOL. Yeah, I'm sure you would. Sorry, but after all of your passive aggressive derogatory comments, you will have to forgive me as I politely refuse to accept your offer. Cant wait for your next post.

            A little nugget of wisdom I was once told while working on a mine site;

            "Those of us that can, do, those that cant… well, they become engineers." - Crusty old underground mining veteran.

            •  

              @pegaxs:

              Joe Smith is on $190k for the same job

              I just had a chat with Joe. He's actually saving $200k pa so probably really on nearly $300k

  • +2 votes

    I buy cars that do what I want, and are as nice as possible, without being so nice that I don't use them as intended. This means I buy used, and I buy bargains. I don't hesitate to throw tools/fishing gear/rubbish etc in the back of my car, and don't fret when I park it at the shops. What's the point of a vehicle if all you do is worry about it 24/7, it's a tool at the end of the day.

    Some sort of diesel 4wd wagon would probably suit you, can get a bullbar for roos, can fold the seats down and sleep in the back, and are generally decently comfy suspension wise for distance driving.

    •  

      Thankyou mate, great advice.
      Can I ask what vehicle/year your current car is?

      •  

        2012 Touareg. Does everything I want, will upset many on ozbargain because apparently it will break all the time. Probably won't suit you as you can't get a bullbar or anything like that for it off the shelf.

        I would look at the Isuzu mux. Rock solid engine and chassis. Not sure how much they go for these days.

        •  

          Oh man touregs look great, I thought they were the one when I was researching at first.

          I think the rock solid mux engine is only the new one they've done from the ground up? The commute isuzu's we had at left a really bad taste in my mouth, probly the only cars I've truly hated, and I'm not someone that typically cares or has allegiances to cars.

          • +1 vote

            @900dollaridoos: They are great really. No frontal protection may be a deal breaker though.

            No, the previous 4jj1 was an excellent engine, extremely reliable. I haven't dealt with the newest one.

  • +1 vote

    Approx 45K car that is salary sacrificed. Based on my calculations post tax cost is approx $740 per month (Does not include the balloon payment at the end of the 4yr lease period). All running cost covered by the lease. Its upto the employee to decide how much they are willing to sacrifice and select a car based on that. Have to buy a new car every four years.

  • +2 votes

    It’s a lousy time to be buying a 4wd, as COVID holidays are dramatically pushing up prices on secondhand vehicles, and limiting any deals on new.
    In normal times, I’d say buy an old diesel Ute with reasonable kms, but these are crazily overpriced.
    So maybe look at the cheaper new models? I think you can get a 4wd Triton under $40k, and if you keep it 10years or longer it probably looks like an ok financial decision.

  • +1 vote

    I spend more on my PCs

  • +1 vote

    Much earlier in my career, I got a Mazda 3 Astina for 37k. At the time it was ~7 months of take home. I paid in cash because it was a lot cheaper then than financing.

    If I assume 6% interest loan over 5 years with no balloon, it's about $700/month, which was about 13% of my take home at the time. Though normally I borrow from an offset so I would be paying significantly less interest over time.

    As for these days, I'm still desperately trying to find an excuse to buy something nice (read: high-yield). But I catch the train and I literally only just crossed the 40k km mark on the above Mazda. My spreadsheet tells me my 'nice' car would be about 20% of my take home (with 66% depreciation resale, interest, maintenance, running costs etc.) over five years.

  • +1 vote

    Bought my wrx in 2018 for $41k when I was on 100k salary, not the smartest thing to do even though was bought outright as didnt have much savings left. Now on 180k still debate whether spending $41k on a car was justified although I keep looking on carsales at prices of the m2comp

  • +1 vote

    I've spent a little over 15% of my average yearly salary on a 4x4 ute 5.5 years ago. At the time it was 7 years old.

    If I were to upgrade it I think today it would cost double that percentage. As the car still works fine for us and is completely fitted for our needs upgrading becomes a pretty hard decision and I'm undecided on whether to upgrade to another ute or a wagon that would suit growing kids better (but much less practical). I'll probably end up upgrading in a year or two and might spend considerable money on the hope that that car serves us for a really long time.

    Electric cars coming into the market are also making a long term car purchase a hard decision as I suspect in 10 years there will be almost no market for small cars running (directly) on fossil fuels. For bigger cars and 4x4 I think it will be a while before they are replaced with full electric but who knows, technologiy adoption tend to become exponential when it reaches a certain point.

    In your case I think I actually have a good suggestion for what you could look at: Mitsubishi challenger. A friend of a friend just bought one and I think it ticks all your boxes while remaining relatively cheap. It's a wagon that's built on a ute (triton) chassis. It's 4x4. And it has relatively not gone up in price due to COVID. The guy removed the back seats and added drawers in a way he can sleep in the back. He does pretty hard core 4x4 with it despite it being only 2.5 litre turbo diesel. In fact I met him on a pretty hard to access beach on the south west coast. And he was absolutely stoked with it.

    Anyway, good luck!

    •  

      Hey mate, thanks heaps for this. Really good advice, could be a winner!

  •  

    30k car but hard to justify 5 months savings

    You save $72k a year?

    •  

      Hesitant to elaborate after old mate above got his knickers in a knot but yeah, currently. I live in camp during the work week with all expenses covered so my only costs are whatever I spend on weekends.
      I typically explore on werkends and either camp, hostel or sleep in my car so my biggest expense is weekend food and petrol.

      Caveat is there's a good chance this deal won't last forever and even if it did I doubt I'd want to be here longer than 10yrs.

  • +1 vote

    When I was earning $90k gross (about $73k net at the time) I took out a Novated Lease on a $30k family shopping trolley. That saved me a bit of tax in various ways. I paid the $10k balloon out 4 years later and still have it. It's worth about $2k. I don't think that's terrible value.

    •  

      Pretty sure the novated lease tax loop has been closed.

      •  

        It wasn't a loophole. It was a set of rules.

        The rules have changed slightly but based on the same income and usage as 2008 I'd save about the same amount of tax. $2500pa.

  • -2 votes

    There seems to be a lot of people on Ozbargain who earn well over $100k a year buying cars for $5,000.

    With that income, you're actually wasting your money buying someone else's used up rustbucket. You'd get much better value buying a brand new Toyota.

    •  

      Cars don’t rust like they used to. You pay $5k because it still has life left in it. Sure, it’s a bit of a gamble, but pick the right vehicle and will have a few years of resonantly reliable motoring and if you want to upgrade your depreciation will be only a few $k.

      With the remaining $25k compared to buying new I could make a positive investment. And then you can take into account depreciation of a new vehicle and be significantly in front.

      I bought a 10yo vehicle about 4y ago. It’s cost me about $2k in repairs. If I sold it today that’s still less than the difference in depreciation compared to a new equivalent vehicle. New vehicle depreciation would probably be $10-15k. Mine has lost maybe $5k.

      • -1 vote

        Positive investment isn't a guaranteed option. Investing is always a risk, so something shouldn't have to rely on your investment paying off to be a good idea.

        Keep in mind that everytime you buy a car, you need to pay the transfer tax, bank transfer fees, and even re-registrer it if it isn't already. That's just money thrown away if you're buying a car every couple of years.

        • +1 vote

          Rego isn’t money ‘thrown away’. You have to pay it if you own a car. Do you think you don’t need to pay rego on a new car?

          Transfer fees aren’t a lot on an old car, certainly less than the depreciation of a new car. Bank transfer fees? Maybe $12 for a bank cheque, but lately I’ve only done instant transfers and that doesn’t cost anything.

          •  

            @Euphemistic: Don't feed the troll

          •  

            @Euphemistic: Depreciation is not money out of your pocket, this is a broken attitude to have on cars. Not everything needs to be calculated in terms of resale value.

            A car is an essential tool that most people can't live without. It's no different to food, water, or heating. Do you calculate the the depreciation on the meal you ate last night?

            Typical depreciation also doesn't take into account the actual use and benefit you got out of the car. Sure, a car will be worth $10k less in a few years, but that's hardly comparable to the benefit you got from those few years. If you didn't have it, you'd probably have lost close to $10k in time and travelling costs anyway.

            Reselling cars is a convenient way to make some of your money back on an unused asset, but it shouldn't be treated like an investment.