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

[cokyi]

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]

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]

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.

[cokyi]

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]

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.

[pcuerpo]

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.

[_Qwerty_]

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]

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_]

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.

[DonCamote]

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?

Quick math says you can based on data you provided.

Will it be advisable to spend half of your salary in car? It depends on your need (or is it want If having a car adds to your cash flow but if not then it is going to be a debt for you and you are losing money by financing a property that goes down in value.

Personally I would not spend 50% of income, I feel this is a lot more comfortable at 25% or less.

I definitely agree with Qwerty on the save strategy. Delay the purchase, put your 20k a month in a savings and let it grow,in 3 and a half years time you have enough to buy a brand new car. By that time, there will be a brand new Civic model for you. If you purchase this model now, you will still be paying for it when the 2006 model body. A lot of changes can still happen between now and your purchase but when that time comes, walk proudly to your car dealer and haggle because you are paying hard cash

[cokyi]

Thanks guys, this is really of big help. Yes I think I can delay the purchase a bit more and save up. I need the car basically for the daily commute to work, and to sort of get off my mom's back since I've been borrowing her car everytime I need one. Nakakahiya na din. Another option for me is to get a jazz (this one eats up a relatively smaller chunk of my salary) and pay for about 3-4 years. By the time I finish paying for it I can sell it and get a new one as well. Who knows I might be eligible for a company car by then?

But yeah I think I'd hold off getting one for another year or so.

[actor21]

tol pwede yan kaso dapat may extra ka for the PMS, Insurance (yearly ito) saka sa GAS siempre...

[Gecko Guy]

Thanks guys, this is really of big help. Yes I think I can delay the purchase a bit more and save up. I need the car basically for the daily commute to work, and to sort of get off my mom's back since I've been borrowing her car everytime I need one. Nakakahiya na din. Another option for me is to get a jazz (this one eats up a relatively smaller chunk of my salary) and pay for about 3-4 years. By the time I finish paying for it I can sell it and get a new one as well. Who knows I might be eligible for a company car by then?

But yeah I think I'd hold off getting one for another year or so.

Good thinking if you will save first before buying a new car! Magastos ang may kotse (lalo pa at FD!) dami kasi nag-gagandahan mods out there!
Better save now and buy the car that you really want.

[Zuplado69]

Quick math says you can based on data you provided.

Will it be advisable to spend half of your salary in car? It depends on your need (or is it want If having a car adds to your cash flow but if not then it is going to be a debt for you and you are losing money by financing a property that goes down in value.

Personally I would not spend 50% of income, I feel this is a lot more comfortable at 25% or less.

I definitely agree with Qwerty on the save strategy. Delay the purchase, put your 20k a month in a savings and let it grow,in 3 and a half years time you have enough to buy a brand new car. By that time, there will be a brand new Civic model for you. If you purchase this model now, you will still be paying for it when the 2006 model body. A lot of changes can still happen between now and your purchase but when that time comes, walk proudly to your car dealer and haggle because you are paying hard cash

Agree but the problem is if you wait for that long you will also pay for the expense of newer model meaning, mas mahal na siya. Like for example mas mahal ang brand new 2010 model na civic sa brand new 2006 model, so meaning halos pareho lang din.

Its like magpapatayo ka ng bahay mo. Mas mahal na ang materyales na gagamitin mo sa mga susunod na taon kaysa ngayong taon.

[gastromd]

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?

i think i've read somewhere in the other thread that you're monthly car amort should not exceed 20% of your monthly income... pero iba na when it comes to the bank, if you declare na you are earning at least 30K a month, they will approve your loan in a flash...hehe. (i might be mistaken though...)

[ronallandottk]

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?

I understand the allure of the Honda brand, and would certainly like one myself. My gross annual income is approximately the price of a Civic (no, not the top of the line one) but I have a kid in high school, a couple of credit cards, insurance, a few utility bills, some salary loan deductions, and the urge to buy a new part for my PC every now and then. Unfortunately (or fortunately, depending on your point of view ), I'm also single (long story), so there's no spouse bringing additional income in.

I ended up buying a Hyundai, with approximately 20-25% of my monthly income ending up as car payments. I went cheap, because you also have to pay for gas and insurance, and unlike my old car, at least I can save on maintenance costs.

If you can wait for a little while so you can afford the car of your dreams, then do so. And try not to buy more than you can afford, it's very stressful living in debt. Since my office is near a bank, I always look with mild amusement at the repossessed luxury SUVs parked nearby or being towed by a trailer. Apparently someone wasn't thinking straight when he or she took out a loan for an expensive SUV.

In my case, I had no choice, since my main ride is badly in need of an overhaul, I needed a car to drive the kid to school and get to work, and the second hand marked is a bit risky nowadays because of the number of flooded and sickly pre-owned cars.

Whatever you buy, make sure it's something you like and enjoy. It need not be the top of the line model or even a top brand, as long as you're happy with it. And you should be happy with it, since it may take you years to pay it off.

Whatever you decide good luck.

[abcerase]

Hi sir, my suggestion is that don't let your finances "bleed" . Better save up for the rainy days Yes, you're a single guy with just paying your DSL but life is unpredictable. If you can settle for a Jazz, I suggest you go for it..so that when you have your annual appraisal, it'll increase your financial headroom.

[jjmd3_787]

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!

[olm093]

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.

It's been mentioned that you're making around P30k a month, but note that you would have to net that of taxes & other deductions, your take home pay will be somewhere around P23k. Which tells us all, you can't afford it yet.

I know because my salary is just a bit higher than yours and i'm planning to get a car under my company's benefit program. the company will shoulder my 30% dp, offers me a better int. rate and a standard term of 5yrs, and i'm still thinking twice about spending my P9k/mo. on the amortization (for a car that costs a max of P660k gross) - considering all the other expenses that come with owning a car - insurance, parking, gas, maint.

I can afford it but isipin mo na lang, mahirap ang masagad financially. Mas maganda eh may room pa din tayo for our savings even when paying amort. for our car. One day we'll get our car! C'mon!