What is the value of your car relative to the value of your home?

In My Humble Opinion
1

Priorities, priorities, priorities. An old established mantra for financial responsibility.

But, hey it’s a free country, and everyone is free to live their life as they please. I know several people that seem to have this ratio out of whack. I don’t know what the magic number is, but I would suspect if your car is worth more than 20% of your home value, then your priorities aren’t consistent with financial responsibility.

I know someone that drives a loaded 2015 Tahoe worth about $65k. They live in a mediocre 3BR 2BA house worth about $130k. Married with 2 kids. When your vehicle is about 50% of your home value, something’s not right.

The car I drive is worth about 6% of the value of my home.

2

Car is 1.66% of the value of the house. Probably the highest I got was 20% in the 80s when I had a house that wasn’t worth that much and a brand new car.

3

For renters here, the easiest comparison would be to monthly rent. In which case my car is currently worth about 4-5 months’ rent. Off the top of my head, the highest it’s ever been is when I had two cars worth about 20 months’ rent (before I sold the newer car and moved to a more expensive apartment).

4

I don’t think you can use ratio very effectively here. I know a guy who lives in a pretty reasonable house he paid like $40K for and drives a 5-year old Corolla. That’s hardly extravagant, but the car is probably worth more than 20% of his home value.

The problem with your system is that real estate prices vary so much by location but car prices are relatively stable.

5

I’m not sure how your ratio is indicative of financial priorities or a lack thereof. If you live in a $750,000 house and drive a $150,000 car and they’re both paid for, you’re borderline irresponsible?

6

Technically, my car is 66% of what I paid for my house, but I bought the house 35 years ago and it’s appreciated, while the car has depreciated. I’m estimated around 13% now.

7

…and the cost of a loaded 2015 Tahoe may be $65k, but that’s not what it’s worth.

8

About 4.3%.

9

Primary residence, worth 6x as much as car. Secondary residence, 20x as much. Similar sizes, but one in a 4K village and the other in a 4M city.

10

Right now, the ratio is ‘good’. Home is worth ~$350,000. Three older cars worth not much. We drive 'em for at least 10-15 years.

We are both about due for new cars though. So it’s going to really change the numbers.

11

Maybe not. A house that costs 750K in San Francisco may only cost 150k in the Midwest.
The Tahoe will cost much closer to the same in both places.

ETA: and the cheaper housing may be what allows the purchase of the expensive vehicle.
And how are you defining mediocre?

12

Mine is around 10%.

13

I drive a real beater, a '97 Kia Sportage, very useful for DIY pickup, chores, volunteer tree pruning, etc. Relatively low mileage, interior is not bad, but the body is pretty rough. Using kbb.com I might be able to get $2K for it.

I live in San Francisco, so even my little 3BR 2BA house would probably bring $750K or more. If I have my decimals right, that is 0.0026%.

14

I bought a brand new car around 3 years ago, but I rent, so where does that put me?

15

:slight_smile:

Your ratio is about 0.0026, which makes your percentage about 0.26%.

16

Without Equity? :wink: :stuck_out_tongue:

Yeah, given that homes tend to appreciate and cars depreciate, the ratios will change over time.

I have a car that I bought for $30,000 new (Chevy Equinox) and bought my house (3Br/2Bath) for $105,000 in 1997. Today, the car is five years old and has had a couple of minor accidents, so I might get $10,000 for it, but the house (according to the taxman) is worth $147,000. So quite a change in ratios.

17

According to Zillow and Kelly Blue Book estimates, our car is worth about 0.11% of the value of the house we rent.

So far, I think I’m winning?

18

The house should be worth about 13x what car is, so 7.7%.

19

I bought my house and car in the same month in 2008. The car, new, was $26,000. It now has about 150,000 miles on it and is probably worth around $4,000. The house I purchased for $562,000 and according to Zillow, is now worth about $640,000.

So at the time of purchase my car was worth about 4.6% of my home; now it’s about .6%.

20

Ballparking it, mine appears to be 4.7%. Would have been around 8% when I bought the vehicle.

On the road to where I used to work, there was house owned by a family of truck drivers. Basic manufactured house, and pretty old to boot. One of the family members had a late-model Maserati that he would park in the front yard. I’m guessing the percentage was 50% or more on that one.