3 ms·

First I've heard of the suggestion that the cost of a car should be 50% of annual pay. To me that's insane, but then again I view my car as an appliance[0]. [0

• xboxnolifes 7y ago
  > ...should not cost more than half of your annual income.
• brianwawok 7y ago
  US median household income is 63k. So for a two income house, that would mean two cars costing a total of 31.5k max. A 2020 yaris starts at 15,650. With fees, should be around that mark. The problem is, the median US household does not buy a Yaris. They spend more like double that. So 30-40k PER car, two cars per household.
  • perl4ever 7y ago
    For a coherent analysis, you should use the median income of two earner households. Two people where one makes $75K and the other makes $50K equals a household of $125K. And it seems obviously extravagant to me for a middle class family to have two new cars. One maybe, but two? But even so, by the formula, the family can afford two $30K cars.
    • syshum 7y ago
      in 2005, the last actual data I could find that lists 2 income households, the median income was $75,293, assuming that income kept pace with inflation that would be $98,562 today not 125K, Such a family would not want to spend more than 49K total on their cars. so that is 1 car for 49K or 2 for 24K and that IMO should be the extreme absolute limit
• SilasX 7y ago
  I think it's intended as an extreme upper bound, not the optimal value.