Buying A Car

[JohnnyHumongous]

I couldn't think of what better forum to put this question in than this one...

To buy a $45K car, what kind of income and/or net worth should one have?

[Sniper]

Assuming your financing the purchase, the decision should not be based on your net worth, but rather on your income vs expenses. Does it fit within your budget.

[gvibes]

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I couldn't think of what better forum to put this question in than this one...

To buy a $45K car, what kind of income and/or net worth should one have?

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Not to be an ass, but cars are huge wastes of money. For instance, assuming you were paying cash, were 25, were retiring at 65, and a long term post-inflation return of 6% (reasonable), and you bought a 25k car instead of a 45k car and invested the difference, in 40 years you'd have an extra 200k (in today's dollars) to play with.

However, to answer your original question, all you need is an extra 750 or so a month, plus whatever the increased cost of insurance and maintenance (like premium gasoline) would be. 1k is probably a good, rough, slightly pessimistic estimate (that's 1k more a month than what you pay, assuming you own your current a vehicle).

[HDPM]

I have made many mistakes on cars and have spent too much on them FWIW. But now I own my car and don't anticipate financing again. So I would say enough money to write a 45K check without negatively affecting your financial future. Unless you are buying a vehicle you need in a business, nobody needs a 45K vehicle. You want it and may enjoy it, but you don't need it. So IMO you must never finance such a vehicle. I get financing a 20000 vehicle when you need a decent car and can't afford to buy it, but to finance a 45K car is nuts IMO.

[ScottTheFish]

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I have made many mistakes on cars and have spent too much on them FWIW. But now I own my car and don't anticipate financing again. So I would say enough money to write a 45K check without negatively affecting your financial future. Unless you are buying a vehicle you need in a business, nobody needs a 45K vehicle. You want it and may enjoy it, but you don't need it. So IMO you must never finance such a vehicle. I get financing a 20000 vehicle when you need a decent car and can't afford to buy it, but to finance a 45K car is nuts IMO.

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Well said. A 45K car is a luxury. Nothing wrong with luxury items if you can afford them. IMO affording it is being able to write a check for it without affecting your financial well-being (i.e. taking it out of retirement savings or something)

[ZBTHorton]

Paying cash for cars makes no sense unless your planning on owning it for a LONG time.

Would you buy a house right now for 100K that was worth 90K the day after you bought it? No.

If you barely drive, lease. Get gap insurance.
If you drive quite a a bit and want a new car every 3-4 years, finance.
If you plan on owning your car forever, pay cash.

[HDPM]

Paying cash for cars is the best way. Owing money for a car is financial cancer. If that means you have to drive it for a while, fine. And you know what? I am much happier with a paid off car than one with a mortgage on it. You are less likely to trade it on a new one because you know exactly how much it will hurt you and cost you. So you will drive it longer probably. Like I said, I have made many mistakes on cars. And the worst mistakes all seemed to involve leasing or financing. The conventional wisdom is wrong IMO. Own your car.

[ZBTHorton]

I sell cars for a living...so I guess my thought process is kinda skewed.

But I still believe the way I believe. The only way I would buy a car with cash(like 15K+) would be if I was RICH. True your going to pay extra in financing...but the resale market is so bad right now...your losing soooo much by driving it off the lot.

[HDPM]

[ QUOTE ]
I sell cars for a living...so I guess my thought process is kinda skewed.

But I still believe the way I believe. The only way I would buy a car with cash(like 15K+) would be if I was RICH. True your going to pay extra in financing...but the resale market is so bad right now...your losing soooo much by driving it off the lot.

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Yep, being a car salesman skews your perspective. [img]/images/graemlins/laugh.gif[/img]


You make your money off of people buying more than they can afford and financing it, then doing it again even when they are upside down. The dealers and finance companies do great. For the most part I would guess you sell mostly to people who don't own anything outright and have no real money to speak of.

[ZBTHorton]

I work for Carmax(no haggle pricing, no financing company, flat commission), I couldn't care less how people buy their cars.

I still fully realize that different options make sense for different people.