Car owners: what was your purchase price vs. annual income?

[poetdereves]

Our vehicles were 8.9% of our total annual income, when we purchased back in 2020.

Income ~$235k
2020 Nissan Rogue $26,500 purchased at 0%.

We were not totally mustachian when we purchased a new car, but it is only the second car DW has ever owned. The first one was purchased brand new at 16 years old and driven for 14 years before handing it down to my parents as a gift because they were in need of reliable transportation to and from my dad's Parkinson's clinical trial meetings once weekly over 2 hours away from their home. We will end up driving the 2020 Rogue at least until we are fully FIRE in 8 years and probably even longer than that barring any accidents.

[GuitarStv]

18 years later we're still driving the same corolla and it's running great though, so I feel like we got our money's worth.

[GilesMM]

Now that I am retired I'm hoping to get my income low enough that a car purchase exceeds it significantly. Wish me luck.

[GuitarStv]

Now that I am retired I'm hoping to get my income low enough that a car purchase exceeds it significantly. Wish me luck.

My retired goal is to no longer own a car.  :P

[GilesMM]

Now that I am retired I'm hoping to get my income low enough that a car purchase exceeds it significantly. Wish me luck.

My retired goal is to no longer own a car.  :P

I would love to the do the same, but we are actually racking up a lot more miles now than I was my last few working years. I had a one mile commute to work and rode it on an electric scooter.  Now we live in a semi-rural area plus take regional driving trips every month or so. We did about 1500 miles last week on a short excursion to the next state.  I have another one end of next week.

[RetireOrDieTrying]

I make about $220k/yr. and my 1995 GMC was free from my brother.

I'm not sure how to calculate that ratio. :D

[Valley of Plenty]

I technically spent $0 on my current vehicle, since I got it by trading down a more expensive vehicle.

I had a 2013 Ford Escape with about 70k miles, still owed $4k on it. Then I found this blog and realized that a fairly new midsize SUV was a stupid vehicle for me to own as a single dude with no kids. As fortune would have it, my mother wanted to buy an Escape, so we made a trade: she paid off the rest of the loan on my Escape and traded me her paid off 2010 Suzuki Kizashi (with 80k miles). Got rid of my car payment and allowed me to drop my insurance down to liability only, for about 1/3 of what I was paying before.

Actually I did buy *another* Kizashi a year ago for $700 to use as a parts car (bad transmission but otherwise fine), so I guess if I use that purchase it would have been <1% of my annual income, so my answer stays the same! :D

[RWD]

[...] 2013 Ford Escape [...] midsize SUV [...]

Technically the Escape is a compact crossover SUV. The Ford Edge and Explorer are mid-size. The Explorer of the same year as your Escape was more than a foot and a half longer and more than 1000 pounds heavier. Plus it guzzles around 33% more fuel. Pretty stark difference.

Depending on which spec of Escape and which spec of Kizashi you might have not even seen a fuel economy improvement by switching. But sounds like it was still an improvement to your financial situation, so nice work.

[Cassie]

10% but it’s a Toyota Corolla that’s now 15 years old and has 68k miles. It’s my last car unless some moron totals it. I don’t know one person that’s had bad luck with this brand.

[ChpBstrd]

Paid 27% of gross salary at the time for a 3-year old Toyota with 43k miles in 2014. Still going strong. Biggest repair has been a $1k brake job after I failed to use low gears going down mountains too fast in the Ozarks. Has depreciated half its purchase price over the past 9 years.

[Must_ache]

Last year I bought a blue $26K Honda Civic EX new as a 50th birthday present to myself.  ignoring tax and registration. 
My income at the time would have been about $135K salary+bonus, closer to $160K with all the perks added in. 
So somewhere between 16.3%-19.3%

Before doing so, I had a 2017 Honda Civic that I bought new for about $19.5K and put about 45,000 miles on it.  With the runup in car prices I sold the car for a few hundred more than I paid for it (but to be fair $20K in 2022 was less purchasing power than $19.5K in 2017, it's not apples to apples)

[iris lily]

We just brought a brand new car as a daily driver. We traded in our 14 because it had something mechanically wrong that could not be diagnosed by a quick look over by the mechanic and also by my husband. I’m too old and too rich to drive unreliable cars. I would’ve been fix it hadn’t been diagnosed and only had a little over 100,000 miles.

We also have a small truck that’s 14 years old with about 60,000 miles. We will drive that until it falls apart. But those are just our daily drivers, we also have two fun cars neither, especially expensive.

[ATtiny85]

Bought a new one last year, right at 10% of household income. Interesting to scroll back in the memory bank and estimate what all our vehicles' ratios have been. It's a short list, we have had more homes than vehicles. My very first right out of college was around 35% (2LT pay in the early 90s, three year old vehicle), but the others have ranged from about 6% to 15%.

[rantk81]

Recently bought a new vehicle for the first time ever in my life.  The out-the-door cost for it, including the taxes and registration fees and such, was about 36K.  My income from my job (base salary, avg bonuses, stock grants) has been about 200K/yr.  So 18% of income I guess?   If I only considered base salary, that percent would be higher.  If I considered income from other sources than my primary job, it would be a lower percent.  I was going to pay cash for it, but I couldn't pass up the offer of having a sub-3% interest rate on the loan for it.   I might have to do some math to compare how much extra money I'm wasting by having a loan-stipulated-low-deductible on the insurance, vs. the interest rate arbitrate gain when comparing the loan rate to the rate on short term t-bills.  It's probably not a big difference either way.

[Turtle]

There's definitely a case to be made for buying something a little more expensive if you know it's going to last you a longer time.

My car (2012 Focus, purchased in 2013 with 35k miles) was about 25% of my gross income at the time, but it's still going strong. Ever since I started driving, my cars had always been beaters that needed excessive amounts of DIY work. I wanted something reasonable that I didn't have to do much work to because at the time we were living in an apartment complex with a strict no-working-on-your-car rule.

Our more recent purchase was a 2014 Odyssey last April for about 20% of my current gross income. Our third child was on the way at the time and we frequently travel out of state to see family. We wanted a minivan that would last us 10 years and when we purchased it , it only had 75k miles. I expect this van to go to 225k or more.

This is also key.  My 2012 Scion was purchased new for about 25% of my then income (but would have been maybe 10-12% of combined.)  I'm still driving it today and I expect to have it for another 10 years, unless I sell it to one of my children.

[bmjohnson35]

My truck was gifted to me 3 yrs ago, but I did have to put around $2500 into it to get it squared away and how I wanted it.  It has 250k miles on it now, but still runs like it will never quit. I would prefer to have a 4 dr pickup, but will probably wait another year or two.  If and/or when I upgrade, I will likely buy another used truck, but one that has 4 doors and 6 ft bed.

[bryan995]

Does this assume one is paying cash?

We financed both cars. At 0.9% and 1.2%. Did not make sense to pay cash.

2021 46k - $9000 credit
2022 51k - $7500 credit

Both are EV, both were 5-7% of HHI at time of purchase.

[obstinate]

$21k Toyota Corolla. >$400k family annual income. Although I do think as the boys get older we may replace it with a hybrid crossover at some point, since this vehicle does not have enough cargo space to make it easy to take trips to the beach and other similar things that require bringing equipment, and I'm not sure about the concept of permanently mounting a cargo container on top.

[rmorris50]

We bought a 2023 Jeep Grand Cherokee a week ago. Cost was 15% of annual income, and 2% of our household NW.

We financed half the purchase price. Dealer was like this is your monthly payment if you put down 1k, 2k, or 3k. I was like can you please show us numbers showing us putting down half. He was all wide-eyed lol.

We didn’t pay all cash because of how our assets are structured and I didn’t want to drain too much liquid cash and have to sell or rearrange other assets.


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[GilesMM]

I succumbed to temptation yesterday and bought a ragtop roadster for summer driving as we live in a lovely hilly area.


According to our 2022 1040, the car cost a bit over 0.5% of income.  So, spouse didn't freak too much.

[weebs]

I succumbed to temptation yesterday and bought a ragtop roadster for summer driving as we live in a lovely hilly area.


According to our 2022 1040, the car cost a bit over 0.5% of income.  So, spouse didn't freak too much.

Nice.  As the current owner of a 2005 Honda S2000, I salute you.  Drop the top and carry on.

[roomtempmayo]

We recently joined the Old Beater Volvo Club with 1.75% of our annual income.

[Abe]

Traded in old car, got new one for 3% of our income (this was 2 years ago, used car we sold for 90% of initial value). Same thing for second car (which was used, only 15k miles on it). Both are EVs.

[clarkfan1979]

My last car purchase was a 2007 Pontiac Vibe with 153K miles for $2750 in January 2020. This was right around 5% of my W2 income, not including benefits. If you include benefits and rental income, it's probably around 2-3%. After 3 years of ownership, I think I only took it to the repair shop once. No DIY repairs at this time. New brakes in 2021 and new tires in 2023.

When I bought the car in January 2020, the general consensus was why I didn't buy a nicer car. Then COVID-19 hit in March 2020 and those same people were freaking out on how they were going to pay their bills.

[rmorris50]

For as much as my car gets driven (work mostly from home) it is prob much more cost effective for me to sell my car and to just Lyft when my spouse isn’t home with his car.

How many households could go down a car and just use Lyft instead when necessary?

Just proves I’m not truly Mustachian :-)


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[fireready]

My wife's car is a 2001 VW Jetta that we recently bought for $3500 after we sold our 2005 Volvo XC90 (that we bought used for $6K) to our daughter for college. No free cars here.  She worked to pay off the car (at a discounted price) so she understands the value of money. She wouldn't have it any other way. 
So it is about 2% of our income.  My daily driver is my bicycle that I pulled the frame out of a dumpster 20 years ago and put on used components to ride.  So $0 there.

[dandarc]

For as much as my car gets driven (work mostly from home) it is prob much more cost effective for me to sell my car and to just Lyft when my spouse isn’t home with his car.

How many households could go down a car and just use Lyft instead when necessary?

Just proves I’m not truly Mustachian :-)


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We did this in Sacramento, California for 18 months - I was 1 mile from my office so I could walk there, or it was very convenient for my wife to drop me off there. And I don't think I had even one month where I spent over $100 on the occaisional Lyft - usually not even close to that.

But upon moving back to Tallahassee, FL, Lyft not very convenient and we found ourselves constantly going in opposite directions to places too far away for walking. If I was badass, one car + eBike would work well, but instead we bought a Nissan Leaf as our 2nd car because I'm not very badass.

[roomtempmayo]

How many households could go down a car and just use Lyft instead when necessary?

We did for a couple years prepandemic (2017-2020) when Lyfts were cheap/subsidized by venture capital.  We could get a 15-20 minute ride for $7-12, and have someone reliably there to pick us up in <10 minutes.  Owning a second car didn't make sense for two or three rides a week at those sorts of prices and with that sort of service.

Post-pandemic it stopped working well.  Rides doubled or tripled in price, and getting picked up for a shorter trip became very unreliable with drivers routinely dropping all but the best fares once they could see them.  More than the price increase, it was the unreliability that killed rideshare for us and motivated us to buy a second car.

[Car Jack]

Well, I retire next Friday, so I don't know how to define income.  I suppose it could be AGI according to the IRS.  My list is a page back and we sold the Fusion but my son bought a new Subaru STi and also has been customizing his S2000 big time.  I tell him not to tell me any prices but expect he's out of pocket another $50k!

[kanga1622]

For as much as my car gets driven (work mostly from home) it is prob much more cost effective for me to sell my car and to just Lyft when my spouse isn’t home with his car.

How many households could go down a car and just use Lyft instead when necessary?

We've been a one car household for almost 20 years. Will add a second vehicle when we have kids that are ready to start driving in a couple years. We have structured our life so that our work hours are mostly the same, we live within walking distance from either office (you can see my office from our living room window), we have access to work vehicles when traveling specifically for office needs, and the kids' school bus stop is 2 blocks from our home.

There have been a few times when having 1 car stopped us from doing what we wanted on a particular day but an electric scooter or bike can get us wherever we need to be in town if one person needs to be in a different location than the rest of the family. Just takes a little planning.

But, since we do have only 1 car we spend a decent amount when we buy. Our last car was right around $20,000 and had just under 15k miles. At the time it was somewhere around 35-40% of our yearly income. With the car prices these days it wouldn't surprise me if we were in that same ballpark when we buy something for us and pass our current vehicle down as the kid's driving car.

[iluvzbeach]

We were a one-car HH from 2015 - 2022; however, we are just two people without kids and I WFH during that entire time while DH was FIREd for most of it.  It worked out great for us, but I realize our situation probably made it much easier than people with kids or couples who both work at offices not in the home.  We decided to go back to two cars in 2022 as I was preparing to fully FIRE and knew I'd want more access to a car to go places, visit parents, etc.  Plus, we can afford it.  Has it been totally necessary?  No, not at all.  Do I like having my own car that I keep as clean as I like?  Yes, very much so.  I am a minimalist and keep my car clean and free of clutter.  DH, not so much.

Sorry, totally off topic for the subject of this thread, but thought I'd add my two cents based on some other recent comments.