Can I afford a brand new FD Civic? [MERGED]

**cokyi** · December 2nd, 2009 01:37 AM

Hi guys. I'm looking into buying a brand new car right now. I'm single and have no other bills to pay except for our house's monthly DSL payment.

I've been wondering what percent of my salary should I dedicate into a car's monthly amortization? And how much SHOULD I be making to afford let's say a brand new Honda Civic? In totality a Civic costs twice my annual salary, not taking into account a possible pay increase.

Can I afford one? Thanks guys.

**cokyi** · December 2nd, 2009 03:02 AM

Hi guys. I'm looking into buying a brand new car right now. I'm single and have no other bills to pay except for our house's monthly DSL payment.

I've been wondering what percent of my salary should I dedicate into a car's monthly amortization? And how much SHOULD I be making to afford let's say a brand new Honda Civic? In totality a Civic costs twice my annual salary, not taking into account a possible pay increase.

Can I afford one or is it practical for me to buy one given my salary? I'm actually choosing between a Civic 1.8v or a Jazz 1.3 A/T. Let me know your thoughts.

**abcerase** · December 2nd, 2009 07:08 AM

hi sir,

ideally (and based on banks), the monthly amortization should be around 30% (at most 40%) of your monthly amort. in order for you to still have headroom for future and unseen expenses.

I guess your annual salary is around 400k and would give you a monthly salary of around 30-34thou (not being slashed with witholding tax of at least 7thou)...

Given that into perspective, I think the question on affordability depends on the amount of d/p that you're going to pay: a civic 1.8v (a/t) * 20% d/p will have you pay at minimum 16.5thou per month for 5 years while a jazz 1.3 a/t * 20% d/p will have you pay around 14.5thou per month. In an IDEAL scenario, both cases are NOT advisable. if this would be put into consideration, IMHO, you need to shell out at least 35% - 40% d/p so that you can IDEALLY afford one.

This is only me since I am more of a traditional payer

Hope it helps.

**_Qwerty_** · December 2nd, 2009 10:02 AM

ipon ka nang pang downpayment.. then for a civic.. if you can pay 20T monthly for 3 years.. or 16T for 4 years.... then kaya na yan..

**cokyi** · December 2nd, 2009 10:24 AM

Originally Posted by abcerase

hi sir,

ideally (and based on banks), the monthly amortization should be around 30% (at most 40%) of your monthly amort. in order for you to still have headroom for future and unseen expenses.

I guess your annual salary is around 400k and would give you a monthly salary of around 30-34thou (not being slashed with witholding tax of at least 7thou)...

Given that into perspective, I think the question on affordability depends on the amount of d/p that you're going to pay: a civic 1.8v (a/t) * 20% d/p will have you pay at minimum 16.5thou per month for 5 years while a jazz 1.3 a/t * 20% d/p will have you pay around 14.5thou per month. In an IDEAL scenario, both cases are NOT advisable. if this would be put into consideration, IMHO, you need to shell out at least 35% - 40% d/p so that you can IDEALLY afford one.

This is only me since I am more of a traditional payer

Hope it helps.

Wow thanks a lot for the very insightful reply.

Yes, I plan to shell out 35-40% for DP. I'm just kinda worried shelling out half of my monthly salary (at most) for a car. I plan to keep it for 5 years, at the very least.

Safe to say that yes, I can very well pay for a civic's monthly amort. Question is, is it advisable? How about you guys? How much was your monthly income when you first bought your brand new car?

**Horsepower** · December 2nd, 2009 10:32 AM

If you don't mind driving these, you can buy a 2nd hand car now like a Nissan B14 or Civic '00s. It's a very good car. Very low resale value too so you can get it a bargain. Just beware of drowned units.

After getting that, you can start saving your amortization money for a brand new car.

That route saves you the headaches, stress and having to pay huge interests (as much as +300K). That 300K can be useful for something else.

**cokyi** · December 2nd, 2009 10:35 AM

Hmm.. technically, I CAN afford one. Maybe the question is it is advisable to pay half of my monthly salary on car amortization? How about you guys? How much were you making when you first bought a brand new car?

**_Qwerty_** · December 2nd, 2009 10:42 AM

the best way to go is save save save.. then buy your first car CASH.. di wala kang utang.. remember.. hindi lang yung acquisition cost ang babayaran mo.. may maintenance.. then gas, parking, etc... so include that in the computation as well.

**jjmd3_787** · December 2nd, 2009 10:44 AM

Yes you can. Basing on the info you gave, I assume you're earning more or less 40k/month. Right?

Being single etc..., all you have to do is save for the D/P and pay the rest within 3 years. Or if you're in a company and it offers car loan plans, mas maigi ng idaan mo dito kasi mas mura ang lalabas na interest as compared to the Bank.

Goodluck!

**pcuerpo** · December 2nd, 2009 11:07 AM

even if you're planning to keep the car for 5 years, are you willing to have a monthly obligation for those months/years to come? if you dont mind, then go ahead. but having a monthly 10k obligation is a bit big if you think about it. consider pa gas, i normally spend around 4k to 5k a month for gas alone (i drive a '09 Jazz 1.5 and at least 1 full tank a week).

if you can afford it, try at least the maximum would be for 2-3 years to pay but it would mean higher monthly costs.