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my philosophy in car buying... buy the cheapest, most reliable, safest vehicle you can afford to pay FULL CASH for. For some people that will be a 10 year old Toyota Corolla, for others it will be a brand new Mercedes or Lexus. Financing cars should only be a last resort if you absolutely have no other options and need transport to get to work.
Of course most people in the US will think I am crazy but that is what is wrong with most people in the United States, they are broke, to their debt in eyeballs and buying expensive assets they cannot afford that are rapidly depreciating in value.
I wholeheartedly agree with you.
I had been sharing a car with my S/O for the past couple years (prior to that I always walked to work), until I started a new position last August that has me driving around all day. Suddenly I needed a car to myself. I ended up going with a new Honda Fit. I put as much money down as I could afford (not a lot), and then did a 5 year loan at $269/mo... 1.9% interest. After all my research, this seemed to be the best bet for me. I will drive this car as long as I possibly can, since I bought it new, to average out that immediate "drive it off the lot" depreciation :-)
There is nothing wrong with financing. There's nothing wrong with paying cash. Different people prefer to do it different ways and neither is better than the other, just different.
However, if you're financing, be smart about it. If you can't get a good interest rate (under 3%), or you have to go out linger than 60 months to afford the payment, then buy a cheaper car.
But $1,000 a month is only a $50,000 car, so if someone says their payment is $1,000 a month, it's not like they driving a 911 Turbo for that.
In another thread, I could not help but notice someone bought a new truck with a monthly payment of over $1250 per month. It is a shorter term loan, which drives the price up. Still I cannot imagine taking on such a large, single auto payment in my household... and I buy new cars more frequently than anyone money conscious should.
Is this becoming more common to see people paying a grand a month on new car loans?
I dunno. I won't do a payment over $300 or longer than 4 years. If I can't get the car and stay within those 2 parameters, then I don't buy it.
Location: San Ramon, Seattle, Anchorage, Reykjavik
2,254 posts, read 2,738,942 times
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Quote:
Originally Posted by LeagleEagleDFW
Everyone has their own comfort level. But it's still a relative number. But if you're bringing in around $9,000 a month after taxes and you don't have a spare $1,000 to play with, you've done something seriously wrong somewhere.
Or you don't plan to send your kids to college or your retirement plan includes a significant chunk financed by social security.
Or you don't plan to send your kids to college or your retirement plan includes a significant chunk financed by social security.
Or you're just financially responsible and enjoy cars. This isn't rocket science - bringing in $9,000 a month after taxes is a good bit of money. You can save for retirement, plan for your child's future, and still have plenty left over to have fun with.
Buying a car was extremely difficult for me. My wife and I had $12k for down payment and were expecting to pay $2000 per month (both cars). I was checking for Land Rover LR4 and my wife was checking for Range Rover Evoque. We loved the vehicles and were exteremly fascinated with them. We were sure that these are the cars we want to buy and keep forever, Everything went well and we agreed on a price. Total of $150k car loan for 2 cars (with extra warranty and etc). Something went wrong with my employer that day and we could not close the deal. Dealer asked for verification of employment (It was my new company and I was there less than 2 weeks) I was little bit upset but ready to get the letter and close it on Monday. When we went home we realized that we are crazy because we were ready to pay $150k for 2 cars!!! We even did not own a home during that time. I do not know what happened to us but we were very close to make a stupid mistake. We canceled the deal and did not buy that vehicles. We both ended up with other brand new vehicles and total cost was only $27k for 2 vehicles. During the same time we got approved for mortgage and bought our first apartment for $175k. Right now we own a home instead of 2 fancy cars
Location: San Ramon, Seattle, Anchorage, Reykjavik
2,254 posts, read 2,738,942 times
Reputation: 3203
Quote:
Originally Posted by LeagleEagleDFW
Or you're just financially responsible and enjoy cars. This isn't rocket science - bringing in $9,000 a month after taxes is a good bit of money. You can save for retirement, plan for your child's future, and still have plenty left over to have fun with.
I do 3x that much but wouldn't spend that kind of money on a car. But to each his own.
I prefer to have my money working for me and my family, not some bank or finance company, so I avoid car payments at all costs. We are single income with 2 kids, making $125k gross per year. We are not wanting for anything, but not living a life of luxury either.
Affordability to me isn't "can I make the payment?". It's how much cash can I throw away for a depreciating asset and not affect my family and their future in a negative way.
That said, if someone wants to pay $1000 a month toward car payments who am I to judge? I just know if I made that much money, I would rather save and pay cash.
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It is a shorter term loan, which drives the price up. Still I cannot imagine taking on such a large, single auto payment in my household... and I buy new cars more frequently than anyone money conscious should.
