I learn quite a fair bit when I was having fun creating my cost of car ownership calculator.
The rule of thumb in my opinion is that your cost of ownership of your automobile as a percentage of disposable income should not be more than 30%.
If your disposable income is $2,500 that’s $750
If $3,500 that’s $1050
If $4,500 that’s $1350
So in the case of my friend’s example in this illustration, it is likely that if cost of car ownership is $1350 he should be earning well in excess of what I earn.
You can always do a calculation here to find out your cost of ownership.
Interestingly, here is an illustration of different expenses that is related to an automobile:
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