Buying and Affordability?

[Shaolin]

Was out with some friends today and we got on the topic of buying cars.. a friend of mine drives an 02 Spec V, another friend drives a 79 Mini SER (He took the SER badge off my friend's Sentra and put it on the back of his Mini :rofl:).

Anyways, we've talked about this all the time, but for some reason it never ends.. my buddy with the SER pays 800 bucks a month (incl insurance) for his SER and has a baby boy.. his job pays about 11 an hour and I never understood how he pays for all of this.

So I was just thinkin for all of you out there.. what makes a car affordable to you? I would assume a specific % of your paycheck towards the finance/lease? I personally wouldn't consider my buddy's situation as "affordable", but he's getting by.

[88CRX]

car payments suck.... i think i'd rather spend those monthly payment on mods on my pos :dunno:

[cobber112879]

It's really where your priorities are. I don't drive anything fancy right now, but I can afford a nice house that I am having built right now. A couple years from now though I will sink the time and money into something I can really be proud of. It will take a while for me to get there though. I have friends who lived with their parents for a while after school and bought their "dream" cars. They just figured that would be the only time they could afford to spend that kind of money on a car. Nothing wrong with doing it that way either in my opinion. Hey, to each their own I say.:thumbsup:

[Altezza]

As a good rule of thumb, car payments (including associated expenses) SHOULD NEVER exceed 20% of your after-tax income. However, everyone has different priorities/situations and spending habits. Cars are amongst items that I will not do monthly payments on because I don't really believe in it. So the only costs I worry about are gas, insurance, and maintenance for my car.

[NickGT]

As much as I love my car. If it totally consumed my paycheque every week. I'd sell the thing on the spot. There is alot more to life than a car..

But in your buddy's case. It's not that bad. At least he doesn't have to deal with the unexpected repair bills of an older car. Everything is new and under warranty. He will probably have the car paid off before the kid really starts sucking the money out of him. (I'm assuming his son is really young). So things might be tight financially now. But at least there is some stability to it all. As long as he's working, he and his son will have food/shelter/clothing, and a reliable means of transportation (and some fun on top of it :thumbsup: ). Not everyone is gonna make millions, but you can still be happy with what you have.

[max_boost]

30% of my monthly earnings goes towards the car, I'm just taking advantage of living at home. If I moved out, I would be driving a $6,700 car, not a $67,000 car:rofl:

Depends where your priorities lie I guess, I have some customers who are millionaires but yet drive a Ford Taurus. They say, they rather spend their money on enjoying life i.e. good food, vacation, nice homes, but I said no cars??!?! Guess it isn't important to them........

I also wanted to say, I will never own a car, I lease them. Just like women, :Dthey are an expense, not an asset:tongue::rofl::poosie:

[Weapon_R]

It's true what max_boost and the rest have said. It's clear that your friends priorities are different.

If I were to live at home and make $11/hr, and being that I have no rent or any other real bills to worry about, I COULD buy myself my Lotus pending credit approval, but all my money would go to that. However, some people have a mortgage/food/bills etc and only have a few hundred left at the end of the month, and cannot do the same thing. Priorities man...

[Shaolin]

Originally posted by max_boost
30% of my monthly earnings goes towards the car, I'm just taking advantage of living at home. If I moved out, I would be driving a $6,700 car, not a $67,000 car:rofl:

Depends where your priorities lie I guess, I have some customers who are millionaires but yet drive a Ford Taurus. They say, they rather spend their money on enjoying life i.e. good food, vacation, nice homes, but I said no cars??!?! Guess it isn't important to them........

I also wanted to say, I will never own a car, I lease them. Just like women, :Dthey are an expense, not an asset:tongue::rofl::poosie:

dude, with the money I hear you roll in, you shouldn't have any worries :rofl: my family's definitely in the wrong business.. time to make our own chinese restaurant :bigpimp:

[max_boost]

Originally posted by Shaolin


dude, with the money I hear you roll in, you shouldn't have any worries :rofl: my family's definitely in the wrong business.. time to make our own chinese restaurant :bigpimp: Wait till you hear what sputnik has to say about his grandma.......j/k:rofl:

If 10+hours a day, 7 days a week is what you are after, then sure! In other words, double the income, but double the work hours and probably expect your life expectancy to go down a few years. Not to mention working in a stressed out greasy environment with no leisure time. :rofl: Oh yah, can't forget the legal liabilities as well! I have some customers who eat here 4 times a week, with the way they pile their dishes and the contents in those dishes, I hope I won't be seeing any up coming lawsuits like McDonald's! Somedays I just want to tell them, the diet coke they are ordering won't save them! haha

To get things back on topic, I don't think you can apply a certain percentage because those who are millionaires may spend what? 1% on their car expense? and still drive a brand new Benz :D

[finboy]

i'd say i spend around 80-90% of my income on my car, but i don't drink, smoke, do drugs, etc. so when i do go out i really don't have much else to spend money one.

i'm still trying to figure out how to balance a car and a girlfriend, they both need so much money. :D

[Altezza]

Originally posted by max_boost

I also wanted to say, I will never own a car, I lease them. Just like women, :Dthey are an expense, not an asset:tongue::rofl::poosie:

While I agree that is the case for women, haha, cars ARE an asset if you own them. Anything you have of value is an asset. What you probably meant to say is that cars should not be considered an investment - which is very true. Haha, cars are considered toys to me. I don't feel right playing with someone else's toys or toys I don't own myself. :rofl:


Originally posted by max_boost

To get things back on topic, I don't think you can apply a certain percentage because those who are millionaires may spend what? 1% on their car expense? and still drive a brand new Benz :D

20% max of after-tax income is the general rule of thumb for people in general - talk to any financial advisor and they'll tell you similar. Of course it wouldn't apply to millionaires on an exact basis. I have close family friends who are billionaires. They own and drive a mid-90s Honda Accord. That's a drop in the bucket for them and literally worth < 0.00001% of their empire. 20% monthly payments would be insane to spend on cars for them although that would be something to see :bigpimp:.

[Xtrema]

Not much to add to what's said above.

For a car that's worth around $30K, you are looking at a cost of $0.55/KM. (gas, insurance, maintence and depreciation/lease cost)

You look at your driving habit and mileage and you can figure out if you can afford a $30K car or not.

[max_boost]

Originally posted by Altezza


While I agree that is the case for women, haha, cars ARE an asset if you own them. Anything you have of value is an asset. What you probably meant to say is that cars should not be considered an investment - which is very true. Haha, cars are considered toys to me. I don't feel right playing with someone else's toys or toys I don't own myself. :rofl:
Assets shouldn't depreciate in value so it is more of an expense. I respect your way of thinking since you are justifying your decision to pull out $50K to buy a car hehe I don't know too many people who can do that since we all drive cars that the bank owns, except you lol:rofl: Knowing me, $50K would be a downpayment on a Black SL500

[Shaolin]

I bought my car brand new with Cash 4 years ago and I felt like it was the worst decision i've ever made.. without having to pay monthly payments or interest is great, but i feel ripped off now that I feel like i have an obligation to drive it till it dies to get my money's worth.

[Altezza]

Originally posted by max_boost
Assets shouldn't depreciate in value so it is more of an expense. I respect your way of thinking since you are justifying your decision to pull out $50K to buy a car hehe I don't know too many people who can do that since we all drive cars that the bank owns, except you lol:rofl: Knowing me, $50K would be a downpayment on a Black SL500

LOL, fact is, not all assets appreciate in value and not all assets==good investments. No need for me to justify anything, haha, it's all personal preference. The car is a lifer...buying just prevents me from swapping cars all day long like you!

[hjr]

Originally posted by max_boost
Assets shouldn't depreciate in value so it is more of an expense. I respect your way of thinking since you are justifying your decision to pull out $50K to buy a car hehe I don't know too many people who can do that since we all drive cars that the bank owns, except you lol:rofl: Knowing me, $50K would be a downpayment on a Black SL500 a depreciating asset is still an asset (and the depreciation may be tax-deductable too!) But it makes sence for many people to lease.

[stockEK]

Originally posted by NickGT
But in your buddy's case. It's not that bad. At least he doesn't have to deal with the unexpected repair bills of an older car. Everything is new and under warranty.

Theres always non-warrantied things like tires. clutches, brakes ect. Also, what if it gets in an accident, and there are deductables, loss of use costs ect..

Just because you can make the payments doesnt mean you can afford it.

Around spring break-up, there are always a ton of fully laoded trucks with low Kms on the lot. And a few months before that, there were a ton of shit-nosed kids driving them...

[max_boost]

Originally posted by hjr
a depreciating asset is still an asset (and the depreciation may be tax-deductable too!) But it makes sence for many people to lease. Oh I know, I was just bugging Altezza:)