Spanish Economist Advises Capping Car Costs at 8% of Salary

The 8% Rule: Advice That Leaves Half of Spain Without a Car

Andrés González Serrano, an economist with nearly 360,000 Instagram trinc, posted car-buying rules on LinkedIn that have been met with cold reception. The most striking one: do not spend more than 8% of your annual salary on all vehicle-related costs, including installments, fuel, and insurance. With the Spanish average salary at €27,000, the monthly budget comes to €180. At the median, €23,000, it is €153. And at the most frequent income level, €14,500, it is less than €100. The expert himself gives the example of someone earning €50,000 a year: €330 a month. The reaction was immediate: they live in a parallel dimension.

The 20/36/8 Rule and the Problem of Spanish Wages

González completes his formula with the so-called 20/36/8 rule: pay 20% down, finance for less than 36 months, and do not exceed that 8% of salary in total costs. On paper, a buyer with the average salary could aim for a car costing €13,500. With the median, €11,500. With the most frequent, just over €7,000. The problem is that, according to calculations circulating among buyers, the market offers nothing new below €16,000. The conclusion drawn by some participants: most people could only afford an electric scooter.

The economist adds two more rules. First: a car is not an investment, because it depreciates by 46% in three years. Second, his favorite: only buy a car you can pay for in cash. And if possible, it should not exceed 50% of gross annual salary. With Spanish income data, this sets the ceiling at €13,500 for an average employee. Let’s go to the market, others ironize: there is nothing for less than that figure.

The Car as a Labor Cost Disguised as Freedom

There is an interpretation that goes beyond household budgets. One participant argues that the car functions as a wage cost passed on to the worker: industrial estates are built where public transport does not reach, and commuting time does not count towards working hours. Those without a car cannot access employment; those who have one pay out of pocket for infrastructure the company does not cover. The 8% rule ignores this structural trap.

On the opposite end, a buyer calculates the real cost of their used vehicle: €9,000 purchase price, €1,000 maintenance and insurance, €1,400 fuel for 20,000 kilometers, plus €1,800 annual depreciation. Total: €4,200 per year, about €0.21 per kilometer. The complete breakdown, item by item, yields a figure that holds up. Doubling the car's price ruins the calculation.

The Financing Trap: Paying for What You Cannot Afford

González’s diagnosis is blunt: many people believe that if they can get financing, they can afford the purchase. Reality: you are paying for a car you cannot afford. This observation connects with a repeated scene: someone who drives a twenty-year-old small car ends up lending money to a colleague who bought a new SUV but cannot afford fuel at the end of the month.

Some consider renting as an alternative, benefiting from economies of scale in workshops, insurance, and tires. One participant claims that high-end premium vehicles are already seen for €1,000 a month all-inclusive, and predicts prices will drop to €800. The risk pointed out by others: normalizing a high monthly fee and turning it into a gateway to cars that will never be owned by the driver.

What Cars Millionaires Buy (and What Everyone Else Buys)

The most uncomfortable data point in the analysis is also the most revealing: the most common car among millionaires is four years old, fully paid off, and costs less than many current salaries. The economist’s lesson: first buy assets, then worry about luxuries. The gap between that behavior and that of an employee financing a new car is not one of income, but of financial judgment, according to the expert’s approach.

The ensuing discussion points to a change of era. During the housing bubble, undeclared cash bought cars whose owners today cannot maintain, according to one participant’s experience. Those who kept a modest vehicle for years now have a comfortable position. The prediction, with reservations: if the labor market does not raise wages, the 8% rule will remain a theoretical exercise and the Spanish car fleet will inevitably age.