What's a reasonable car budget?
I just joined this club. My name is OLI and i drive a 2007 328i and Toyota 2008 Highlander V6.
Until 2006 I lived in Europe and had some idea of what a car can cost compared to ones income. I moved to California in 2007 where the cars are much cheaper and the income is much higher. At first glance this is paradise! Applying the same logic I could easily buy the car of my dreams which is the E9x M3 the first and last V8. But I am also married to the woman I love but has a different view about car budgets.
While in Europe I thought the sticker price could not exceed 1/3 of my yearly income. I then drove the car for 5 years. ex. $60,000 yearly income $20,000 car, drive it 5 years, this is then the only vehicle I own (no other cars or trucks, no bikes, scooters, quads, jetski's, boats, Rv's, nothing like that at all) One car that's it. I would rather say that $20K car on a $60K budget is rather high (some might disagree!) keep in mind that in my previous home country a toyota RAV4, 4-banger easily tops $50K, so $20K does not get very far.
Now I would like to apply the rule of 1/5 th to my budget.
Is that excessive? I am interested in your thoughts? Thanks