I'm not sure "5% of net worth" is any better than other arbitrary rules of thumb like percentage of paycheck. HHI is ~ 550k Purchase didn’t sting at all and honestly I kinda of wish I spent more and went with the m340xi oh well next car. Net worth is about 2 million so I’m less than 2.5%. Traded the old Honda for 12k so out the door cost after taxes is about 36k. I think sedan buyers have much more leverage than suv in this market. Sticker was 51.5k but got it for 45k after discount and incentive. I just bought a brand new 2021 bmw 330xi pretty much fully loaded. Net worth was in the low 500k range with HHI ~250k This purchase didn’t sting at all. I purchased a car for my wife in 2017 (a brand new touring trim honda) out the door cost was a little less than 5% of net worth at that time after trading in her old Honda. I was well over 5% of net worth Income was about 125k But it turned into a very reliable car it retained value well. I actually regretted this purchase as I felt it was a bit too pricy. After taxes and trade I paid 24 out the door. It stung quite a bit and the loan bothered me. I bought a brand new car for 22k in 2006 after graduation with a net worth of 500 bucks. It also lets you get some nice cars once your NW is in the millions If you can stay at or under that you are good. I am posting because I believe I have found the perfect rule: 5% of net worth. I know this has bugged me too over the years. Lot of threads about this with people nervous with how much to spend on a car.
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