What percentage of your wage do put towards motoring?

rodenal · 26 Jun 2013 at 08:23

paradigm said:
Because no matter which way I'd have bought the car, I'd have been either saving up in the years previous, or spending as I go after purchase.

In theory for a car purchased within 12-24 months, this figure should be pretty similar either way unless you happened across a windfall of some type outside of your annual wage.

That's the way I look at it - no matter how long you have the car you will buy another at some point. Ideally to keep comparing apples with apples (against those that are financed/loaned) you'd spread the purchase cost over either the time you'd owned the car or the time you anticipated owning it...

....Unless the next car is either free or paid from outside of regular outgoings.

But tbh, it was too much of a pain in the rear for me to try and figure out, so I didn't bother, allowed for depreciation on both cars and just took the interest from the loan on the second car.

Uriel · 26 Jun 2013 at 09:06

For me, about 11% of gross salary if I include an estimate of depreciation on my 2010 Honda Insight ES. Roughly 7% if I don't. All other costs including cleaning, servicing, fuel, VED etc are included.

wingman · 26 Jun 2013 at 09:10

atpbx said:
No, we now run two cars, both of which are substantially more expensive to own and run than the one I was running at this time last year.

So even though we both earn more, we have more expensive motoring costs.

I had surmised that something like this had happened, my response was tongue in cheek, highlighted by the

.

Jez · 26 Jun 2013 at 09:17

[TW]Fox;24517047 said:
Unless purchasing the car is something you have to pay for each month/year, why would you?

The problem is that if you do not, it makes the figures non comparable. Someone who owns their cars will spend virtually nothing but there is an opportunity cost for the capital which is tried up in the vehicles. This should really be included for fair comparison.

Overlag · 26 Jun 2013 at 10:46

90% maybe

lemonkettaz · 26 Jun 2013 at 10:49

I drive 600 mile a weekend, 3 weekends a month. Plus car tax, fuel, insurance, cost of car, then random things like oil etc...

I havent worked out the % but it will be a very large % of my monthly budget.

If it goes up any more without my wage going up It will be a struggle.

Xez · 26 Jun 2013 at 12:11

With my loan repayment plus fuel I spend between 25 and 30% of my monthly income on my car. Every month I have spent about an additional £400 so far which isn't included though. Quite high judging by this thread but it's not something that I feel is too much or putting me in any financial strain.

Zeed · 26 Jun 2013 at 12:18

im on minimum wage. Insurance and tax is 10% of my annual income.

So i gues 20% of what i earn goes in my ITR that i dont even drive. I just love cars

AAAAA and forgot to mention its still on credit that takes extra 10% of my wages a month.

Make it 30% then...

[TW]Fox · 26 Jun 2013 at 12:25

Jez said:
The problem is that if you do not, it makes the figures non comparable. Someone who owns their cars will spend virtually nothing but there is an opportunity cost for the capital which is tried up in the vehicles. This should really be included for fair comparison.

What about those of us who have purchased cars so long ago we've depreciated them to zero on our personal balance sheet and consider there to be zero meaningful capital tied up in them

rodenal · 26 Jun 2013 at 12:32

[TW]Fox;24518350 said:
What about those of us who have purchased cars so long ago we've depreciated them to zero on our personal balance sheet and consider there to be zero meaningful capital tied up in them

You still paid for that car somehow and will pay for future cars through saving your current disposable income (assumedly). So there's still a purchase cost, albeit distributed through many years.

wingman · 26 Jun 2013 at 12:35

[TW]Fox;24518350 said:
What about those of us who have purchased cars so long ago we've depreciated them to zero on our personal balance sheet and consider there to be zero meaningful capital tied up in them

In that case, take the full purchase cost, then divide by the months of ownership and apply it to the %. Every extra month of ownership can be recalculated to suit if so desired.

Edit; beaten by rodenal, again.

Freefaller · 26 Jun 2013 at 12:39

At the moment pretty much 0! The car we use is old, the servicing costs hardly a thing, we put £50 or of fuel a month, and tax is next to nothing at ~£120 and then the MOT and insurance is tuppence. So combining our wages over a year for the cost of the car over a year less than 1%.

When I get a new toy for myself I'd probably end up with around 5%, that's what I've sort of budgeted for myself, excluding purchase cost.

lordrobs · 26 Jun 2013 at 12:39

wingman said:
In that case, take the full purchase cost, then divide by the months of ownership and apply it to the %. Every extra month of ownership can be recalculated to suit if so desired.

Edit; beaten by rodenal, again.

So for the purposes of this thread if you've only owned a car for a couple of months then the answer could well be in excess of 100% of your annual wage

wingman · 26 Jun 2013 at 12:46

One would assume that if the car was only owned a couple of months then it wouldn't have depreciated to £0.00 within that time and therefore the asset would hold equity. Said equity should be taken into consideration.

rodenal · 26 Jun 2013 at 12:47

Easy solution to that, distribute it out over how long you think you will own the car. Or estimate how much you put away per month from your wage towards the next car.

Irish_Tom · 26 Jun 2013 at 13:15

rodenal said:
Easy solution to that, distribute it out over how long you think you will own the car. Or estimate how much you put away per month from your wage towards the next car.

This thread has made me realised that I should start doing this.

Currently all my savings are going towards a house deposit but I might start slicing a bit off to go towards the next car.

Jez · 26 Jun 2013 at 13:37

[TW]Fox;24518350 said:
What about those of us who have purchased cars so long ago we've depreciated them to zero on our personal balance sheet and consider there to be zero meaningful capital tied up in them

Than you can put the cost (assume zero residual value) of puchase/the number of months owned and then be happy that you are still spending almost nothing

[TW]Fox · 26 Jun 2013 at 15:19

But I don't spend money on it's purchase any more. None of my wage goes towards it's cost. I spend 0% on the actual car, only it's upkeep.

In the same way as the graphics card I bought last year does not take up any of last months pay

MooMoo444 · 26 Jun 2013 at 15:25

Overlag said:
90% maybe

What on earth do you do that means 90% of your wages goes into your car(s)?

rodenal · 26 Jun 2013 at 16:41

[TW]Fox;24519456 said:
But I don't spend money on it's purchase any more. None of my wage goes towards it's cost. I spend 0% on the actual car, only it's upkeep.

In the same way as the graphics card I bought last year does not take up any of last months pay

That money came from somewhere, if it wasn't a gift or outside of income then its no different (in theory) to someone taking a loan for the same amount, you just paid that out at a different point in time.

You won't spend any of your current wage saving for the current car, but if you think you will ever buy another cash or put a healthy down payment on then effectively you are saving up month on month for motoring, albeit it could be a tiny amount.

Just like when you buy another graphics card, that money came from somewhere