NEW YORK (CNN/Money) - What is the maximum percentage of your salary that should go towards owning a car? If you make $60,000 a year, for example, should you limit yourself to a $12,000 car?

-- William Phillips, New York, New York

This is one of those questions for which there's really no correct answer that applies to everyone. That said, there probably is a limit to how much of our income each of us should be willing to devote to a car, assuming we have finite resources and other financial goals to achieve, like, say putting our kids through school and retiring in comfort.

Determining that limit, however, is a somewhat subjective matter that may vary from person to person.

One way to consider this issue is to look at what other people do. In a story that my colleague Jeanne Sahadi wrote for our site last year, "Are You Spending Too Much On Your Car?", she noted that the average consumer pays an estimated 11 percent of his or her gross monthly income on a car payment, which would translate to a monthly payment of about $550 (11 percent of $5,000 per month).

She also noted that at least one financial planner felt that percentage was too high, and that it ought to be closer to 8 percent, which in the case of a $60,000 annual income translates to a monthly payment of $400.

Those payments can translate into quite different car prices, however, depending on the level of interest rates and the term of the loan. (For simplicity's sake, I'll ignore the question of a down payment.)

For example, if you take out a 60-month auto loan (close to the typical term for Americans these days) at 6 percent (roughly the current average for a new-car loan listed at Bankrate.com, a $400 payment (8 percent of your $60,000 income) is enough to finance just under $21,000. Take out a 36-month loan and pay the average rate of 5.7 percent, and you're able to finance about $13,000.

If you buy when rates are higher, you get less car for the same loan term. If rates were to rise to 9 percent, then a $400 payment and a 36-month loan would finance a car with a sales price of about $12,500.

So we're talking quite a range, depending on rates and the term of the loan. You can get more car by extending the term of the loan, of course. But you want to end up in the position of having the car give out and have a resale value lower than the remaining balance on the loan.

Keep in mind too that there's more to the cost of a car than just the loan payments. You've got to pay for gas, maintenance and repairs and depreciation, the loss in value as the car ages. A gas guzzler that breaks down a lot and has poor resale value will cost you more over time than a sturdier more fuel-efficient car that maintains its value better.

You can get an idea of a car's total cost by checking out sites such as Edmunds.com and Intellichoice.

So where does this leave us on the issue of how much you ought to spend on your car? As I said earlier, this is a personal decision. If having a flashy car or an expensive model that screams "I'm successful!" is truly important to you, then I suppose there's nothing wrong with devoting an outsize portion of your income to a car. Whatever makes you happy.

Just be aware that some of the money you're pouring into your wheels could be going to your 401(k) plan or your kid's 529 plan or saving for a house down payment, etc. That's a tradeoff you'll have to make for yourself.

As for me, I'm of the "a car is transportation" school. I drive a seven-year-old minivan that has about 70,000 miles on it. And I plan to drive it into the ground, and then buy something equally as prosaic (even though my 11-year-old son begs me to consider a "cool" car).

My feeling is that I'd rather shovel more money into retirement investments than get more flash and horsepower.

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But then again, who knows. If my investments grow large enough and I begin to feel more financially secure, maybe what's left of the 16-year-old motorhead in me will gain the upper hand, and I will splurge for my dream car.

I can see myself now, tooling down the highway in a hot-pink '59 Caddy convertible, the wind in my hair (or what's left of it), the radio blaring Beatles tunes...

Walter Updegrave is a senior editor at MONEY Magazine and is the author of "We're Not in Kansas Anymore: Strategies for Retiring Rich in a Totally Changed World."