NYSpeeds Financial Advisors...

you shouldn’t be spending more than your gross annual pay on the price of a car. in other words, if you make 10/hr, or essentially $20,800/year, you should not be buying a $30k car.

i think a SAFE and CONSERVATIVE route to take is that it is ok to spend 1/3 of your gross pay on a car. so if you make 60k, then a 20k-25k car is reasonable. if you make 100k, then a 30-40k car is reasonable.

a better rule of thumb is that you should spend between 2x your gross pay on a house. ie, if you make 75k (total household income) then a 150k house is reasonable.

people spending beyond their means to satisfy material wants without regard to long term affordability and consequences is one of the main reasons we are in the current economic downward spiral.

bottom line = IF YOU MAKE 20k/year, you SHOULD NOT be purchaing a 30k car.