The 20/4/10 Rule
A widely recommended guideline: put 20% down, finance for no more than 4 years, and keep total car expenses (loan + insurance + fuel + maintenance) under 10% of your gross income.
Hidden Costs to Budget For
Registration & transfer fees: $500-800. Stamp duty: 2.75% of purchase price in WA. Insurance: $1,000-3,000/year. Fuel: $2,000-4,000/year. Servicing: $500-1,500/year. Tyres: $400-1,200 every 30-50,000km.
Example Budget at Different Income Levels
$60,000 salary: Comfortable car budget of $15,000-22,000.
$80,000 salary: Budget of $20,000-30,000.
$100,000 salary: Budget of $25,000-40,000.
These ranges assume reasonable running costs and no other major debts.
The Depreciation Factor
New cars lose 20-30% of value in the first year alone. A 2-3 year old used car has already absorbed the steepest depreciation, offering dramatically better value. This is why quality used cars at NORTH Motor represent such strong value.