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Hello. I just need some advice to NOT buy a new car. I dont need a new car, I want one. Plus it feels good when you drive a new car. Im 31 by the way and married with a daughter. And a dog.
here is my cash story now with no care note:
total mortage/month: 1480 bucks, 6%
savings: I have enough for 6 months emergency fund
401K: 5% matched
Ability to save: After paying my bills (mortage, student loan, church dues, cell phone, car insurance, extra stuff and eating out) per month, I have $1800 to save.
My credit report has no negative accounts, nothing. I have no credit cards. The only loan Im paying now is one student loan and mortage. So, thats ok.
My wife has a 03 Infinti G35 with 127k miles we bought cash 9 months ago when our truck got wrecked. Great car and runs nice. If we want to go out, we drive that car. Our if I want to look cool on a Sat, I take that car and just drop my wife off to work. Our other car is a 1995 Toyota Corrola with 168K miles and its pretty beat up. A/C works but makes lots of rattling noise, pretty dirty and a some dents. But it works fine. I use to drive back and foward to work. I work like 15 minutes from my house. But the car is ugly and havent had a new car in like 7 years and kinda think I deserve one.
The car i want is about 30-31K bucks. 08 Infiniti. Very nice. That Toyota Corrola has a few issues I just been ignoring like back shocks replacements and exhaust muffler. So my new car note will be about $515 a month and my insurance will go about $90 bucks. So I will have a new debt of about $615 to pay for 5 years. Hopefully i get good inrest rate.
I guess this will leave me with about $1100 to save per month.
What do you think? Should I buy the new car and enjoy it? Or just drive the car I have while saving. I work in Oil and Gas as an engineer and just returned from lay off for 4 months as well. Probally need to wait til projects and jobs are back stable as well. But interest rates are good.
Let me know what you think. Im tempted to just get it. Or should I just keep on saving or perhaps investing.
Thanks in advance.
Well, it is hard to argue against using money you have on something you can afford. But the two main arguments are that you probably don't want to ever be upside down on the car, which would require you to put more of a downpayment or a shorter loan period. I think this would be my main hesitation about buying a car.
The second is that even if you amortize it over the life of owning the car, you still have the issue that if you buy a car that is 1 year older you avoid paying the depreciation costs of that 1 year and instead pay a much lower depreciation cost of say 5 years later, (if you own a car for 5 years on average), since you paid depreciation over the time you own it, you also pay lower insurance costs. If you feel the reliability of your current car is an issue certainly consider buying a different car, but perhaps something that would more comfortably fit your budget right now, like an '05 instead of an 08 Infinity, or a Nissan instead (same manufacturer).
I would say an all or nothing approach to saving is not good. Personally I would save up until I have at least 30% of the purchase price of the car I want, and then finance the rest over 3 years or so depending on the interest rate. But I tend to feel good about saving up for something to buy and then buying it, I know some other people hate the waiting. Some others hate to see so much money going out.
Well, it is hard to argue against using money you have on something you can afford. But the two main arguments are that you probably don't want to ever be upside down on the car, which would require you to put more of a downpayment or a shorter loan period. I think this would be my main hesitation about buying a car.
The second is that even if you amortize it over the life of owning the car, you still have the issue that if you buy a car that is 1 year older you avoid paying the depreciation costs of that 1 year and instead pay a much lower depreciation cost of say 5 years later, (if you own a car for 5 years on average), since you paid depreciation over the time you own it, you also pay lower insurance costs. If you feel the reliability of your current car is an issue certainly consider buying a different car, but perhaps something that would more comfortably fit your budget right now, like an '05 instead of an 08 Infinity, or a Nissan instead (same manufacturer).
I would say an all or nothing approach to saving is not good. Personally I would save up until I have at least 30% of the purchase price of the car I want, and then finance the rest over 3 years or so depending on the interest rate. But I tend to feel good about saving up for something to buy and then buying it, I know some other people hate the waiting. Some others hate to see so much money going out.
Thanks for that advice. Considering I only have $8k in my savings, i will choose to wait. I just dont feel comfortable adding another bill (about $600 including car insurance) with my mortage and student loan. The car is not giving me issues, I only drive it to work (which is about 16 minutes from the house). We have a 2003 Infinti G35 with 127k miles and doesnt give us any trouble at all. Once my savings get up somemore, I will reconsider.
Thanks for that advice. Considering I only have $8k in my savings, i will choose to wait. I just dont feel comfortable adding another bill (about $600 including car insurance) with my mortage and student loan. The car is not giving me issues, I only drive it to work (which is about 16 minutes from the house). We have a 2003 Infinti G35 with 127k miles and doesnt give us any trouble at all. Once my savings get up somemore, I will reconsider.
Thanks
Whoa...$8k in your savings means you don't have enough emergency fund...load up on that first. 8 months worth of bills.
Personally I think 5 years is too long to have a payment.
I also think it's cooler to be debt free than driving a shiny new car.
How about this:
1) Calculate your monthly expenses (including mortgage/groceries/utilities/kids stuff/school expenses, etc) and multiply it by 12.
2) Save that amount for your emergency fund
3) Then Save around 10K for a downpayment for your car
4) Get a car loan for around 3 years. See if you can get a 0% interest or 2%.
Personally, if you can, I'd save up and buy the car on cash, but most people don't want to do that for whatever reason.
Personally I think 5 years is too long to have a payment.
I also think it's cooler to be debt free than driving a shiny new car.
How about this:
1) Calculate your monthly expenses (including mortgage/groceries/utilities/kids stuff/school expenses, etc) and multiply it by 12.
2) Save that amount for your emergency fund
3) Then Save around 10K for a downpayment for your car
4) Get a car loan for around 3 years. See if you can get a 0% interest or 2%.
Personally, if you can, I'd save up and buy the car on cash, but most people don't want to do that for whatever reason.
That makes sense. I will work on emergency fund first.
I have a better idea...roll with a used Hyundai Genesis Coupe/Infiniti killer, you could probably hit the sub $20k price point on these. Very, VERY nice car that intentionally was created to tap into Infiniti's market at a much lower price. Hyundai has been on a roll lately:
Location: We_tside PNW (Columbia Gorge) / CO / SA TX / Thailand
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Quote:
Originally Posted by Steve Bagu
...
Decades ago I bought a new Demo car ...buy NEW again?...NEVER.
I bought a new car ONCE (when I was 18...) NEW again?...NEVER.
Quote:
Originally Posted by LittleDolphin
I think it's cool to WANT something, seek advice, then decide not to get it because you don't NEED it. That's what cool's all about....In fact, I think you just grew a huge amount in the coolness factor.
Lots of ways to be cool w/o going in debt.
There are many neat rides that are head turners &
I now drive a StealthRabbit
It cost me $35, gets 50 mpg on free fryer grease, Definitely turns some heads, and is . It has 'racing class' suspension and lots of CHEAP goodies (Check your neighbors' brier patch for a cheap Rabbit. ).
I have several spares, some with over 500,000 miles. Just painted one of my VW Pickups ($80, DIY). It is really classy now! Lots of people ask where to get one. I am adding a turbo and a few 'tricks' to make it a bit faster ($200). Bumper sticker = 50 mpg since 1976, Where have you been? (not popular with owners of $40,000 Prius')
Quote:
Originally Posted by darrell2525
Thanks. If I open a ROTH IRA account. Can I do my own stock picking or will a mutual find invest for me?
This is called a 'self directed' ROTH IRA, you can set up with a discount broker or with a good mutual fund family (Vanguard / Fidelity). ($5-$7 / trade, I use Scottrade, ThinkorSwim, Vanguard, Fidelity, and Ameritrade). Good FREE edu here Bogleheads :: Index I set my kids up with self directed ROTH's when they were age 12, and they often out perform me, + it was not considered available funding source for college, even tho it technically is. (helped with low interest / Scholarships).
Other things to consider... If I would have put the cost of my new car (1970) into Cash flowing investment property, I would be getting ~ $3,000 / month net INCOME today. (based on my returns from similar investments)
That, my friend, is enough to LIVE on Hum... no need to work for 'the-man'. Just retire pre age 40 and go to Tahiti and collect the checks. (once you have done this 3-4 times).
Now, That would be COOL
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& 
).
Hum... no need to work for 'the-man'. Just retire pre age 40 and go to Tahiti and collect the checks. (once you have done this 3-4 times).
