Please register to participate in our discussions with 2 million other members - it's free and quick! Some forums can only be seen by registered members. After you create your account, you'll be able to customize options and access all our 15,000 new posts/day with fewer ads.
wow, this guy is supposed to give savvy financial advice but what percentile of net worth do you have to be to have $1 million net worth? This would mean only a fraction of the population would buy new cars and the entire auto industry would bust.
So, what is your income criteria for car affordability? Don't buy a car more than 30% of your annual income is a good test in my view.
wow, this guy is supposed to give savvy financial advice but what percentile of net worth do you have to be to have $1 million net worth? This would mean only a fraction of the population would buy new cars and the entire auto industry would bust.
So, what is your income criteria for car affordability? Don't buy a car more than 30% of your annual income is a good test in my view.
While I don’t agree with everything DR says, lots of his stuff makes sense.
My criteria?
I won’t buy new anymore. I’ll go buy a CPO price cap at 25/27,000. Used? One owner 100/110,000 miles max 10 years or less age. Maintenance records. No paperwork issues. I’ll never waste 30% of my yearly income equivalent on a car.
I see plenty of applicants for rentals with nice new cars and big payments. And when doing the calcs their still or income is so jacked because of that nice high car payment I have to say I’m sorry you dont qualify.
Most people shouldn’t be buying the vehicles they currently drive.
I love the part where he says that people say to him that they're afraid of buying a used car. Then he says to them, what are you driving now? A used car. LOL.
If no one ever bought a new car, until a net worth of $1 million, then multiple industries would be laying off thousands and the economy would suffer.
His advice is for people with massive money problems. You don’t need a new car if you can’t even pay your bills.
For everyone else who is financially responsible and can afford a new car, they have every right to treat themselves or their spouse to an enjoyable vehicle as they only live once.
If you can’t enjoy the fruits of your labor until retirement, what’s the point? Tomorrow isn’t promised.
If no one ever bought a new car, until a net worth of $1 million, then multiple industries would be laying off thousands and the economy would suffer.
His advice is for people with massive money problems. You don’t need a new car if you can’t even pay your bills.
For everyone else who is financially responsible and can afford a new car, they have every right to treat themselves or their spouse to an enjoyable vehicle as they only live once.
If you can’t enjoy the fruits of your labor until retirement, what’s the point? Tomorrow isn’t promised.
He's saying that you take a huge loss on the purchase of a new car, and that only millionaires should buy new cars because they can afford to take the loss. I think his point is just that's it's a silly waste of money, because as soon as you sign on the dotted line, it's lost value as a "used car" anyway.
He then goes on to say that if you put the car payments into an IRA instead, you could become a millionaire. If only life was that simple. But, I do agree that buying new cars is a waste of money.
He's saying that you take a huge loss on the purchase of a new car, and that only millionaires should buy new cars because they can afford to take the loss. I think his point is just that's it's a silly waste of money, because as soon as you sign on the dotted line, it's lost value as a "used car" anyway.
Any car you drive will lose value, new or used. Ferrari 360 Modena or Honda Civic. (The cars that don’t lose value are rarely driven and rarely obtainable to the average American)
If everyone drove a car based on how much money they could save, trucks and SUVs would not exist. Everyone would drive a Toyota Prius. Wait, everyone would be taking a bus or riding a bicycle to work.
Quote:
Originally Posted by NoMoreSnowForMe
He then goes on to say that if you put the car payments into an IRA instead, you could become a millionaire. If only life was that simple. But, I do agree that buying new cars is a waste of money.
And you could also die tomorrow. Half the people on this site claim “they’re going to use social security to help fund their retirement” anyway.
But my point is that if your life depends on what you can contribute to an IRA, then you should be living in a tent and riding a bike or bus to work. So you can fully fund that IRA!
Life is a mix of spending for today versus saving for tomorrow. Blanket generalizations of “new cars are a waste of money” fail to account that any car is a waste of money, just ride a bike or take the bus if a car puts you in the poor house.
He makes sense but the net worth criteria is pretty dumb IMO.
I like my method of buying a car. I get paid every two weeks, and throughout the year, I get 26 paychecks-24 of them I use to pay for my monthly expenses. I save those two extra paychecks and stash them in my car savings account. In year 5, that's when I evaluate if I need to replace a car. Whatever money I accumulate in that savings account is my maximum I would use to spend on a car purchase, including tax. If I don't need a car in year 5, then I evaluate my vehicle situation, on a year-to-year basis, until it's time to buy a car.
Please register to post and access all features of our very popular forum. It is free and quick. Over $68,000 in prizes has already been given out to active posters on our forum. Additional giveaways are planned.
Detailed information about all U.S. cities, counties, and zip codes on our site: City-data.com.
Please register to participate in our discussions with 2 million other members - it's free and quick! Some forums can only be seen by registered members. After you create your account, you'll be able to customize options and access all our 15,000 new posts/day with fewer ads.
