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Message
Car Finance Maximum
Posted on 3/23/15 at 8:52 pm
Posted on 3/23/15 at 8:52 pm
I saw a post last week regarding some ridiculous guidelines for car buying.
Needed to make $150,000 per year just to buy a $20,000 car.
My question to the MB is did I buy too much car? I guess car value is irrelevant and loan is more important factor. Car value is 100% of salary. However, monthly payment is 13% of my gross monthly income.
13% doesn't seem TOO high to me. Yes I invest in personal trading account and i contribute to 401k and roth.
What's your thoughts oh great MBers?
Needed to make $150,000 per year just to buy a $20,000 car.
My question to the MB is did I buy too much car? I guess car value is irrelevant and loan is more important factor. Car value is 100% of salary. However, monthly payment is 13% of my gross monthly income.
13% doesn't seem TOO high to me. Yes I invest in personal trading account and i contribute to 401k and roth.
What's your thoughts oh great MBers?
This post was edited on 3/23/15 at 9:00 pm
15
Posted on 3/23/15 at 8:58 pm to SomethingLikeA
It sure seems like too much car to me. Every person has a different opinion on thes things though.
Posted on 3/23/15 at 8:58 pm to SomethingLikeA
Sounds high to me. shite either you bought a ballin arse car or don't make a whole lot.
When I buy a new truck I'm shooting for 30-40% total/yearly gross
When I buy a new truck I'm shooting for 30-40% total/yearly gross
This post was edited on 3/23/15 at 9:34 pm
Posted on 3/23/15 at 9:03 pm to SomethingLikeA
I can't put an exact number on it, but knowing that I have to work a whole year just to pay for a depreciating asset like a car would make me sick to my stomach (assuming you're not a college student working part time).
Posted on 3/23/15 at 9:14 pm to SomethingLikeA
quote:
Car value is 100% of salary.
That's way too much car hoss.
quote:
monthly payment is 13% of my gross monthly income.
That's also way too much car.
Posted on 3/23/15 at 9:18 pm to SomethingLikeA
My first new car was probably 60% of my salary at the time, but even that was probably too high
Posted on 3/23/15 at 9:26 pm to Croacka
It should be 30-40 percent of salary. My first car was 25 percent of yearly salary which is where I like it to be.
Posted on 3/23/15 at 9:28 pm to SomethingLikeA
How long is your loan for?
Posted on 3/23/15 at 9:30 pm to tigerbacon
30-40? Now that seems really high
If that's true. Im doing really well at only 13%.
If that's true. Im doing really well at only 13%.
Posted on 3/23/15 at 9:34 pm to SomethingLikeA
I think he meant 30-40 of annual, not in terms of monthly payments
100 is too high, unless you still live under someone else's roof or something
100 is too high, unless you still live under someone else's roof or something
Posted on 3/23/15 at 9:38 pm to SomethingLikeA
something in your math doesn't add up
You must be paying more than 13% in monthly gross
You must be paying more than 13% in monthly gross
Posted on 3/23/15 at 9:51 pm to Croacka
Let's assume one of you ballers makes 100k.
8333/month gross
Car note is 1083/mo.
Insurance is covered outside of the 8333. 1083 is total obligation.
8333/month gross
Car note is 1083/mo.
Insurance is covered outside of the 8333. 1083 is total obligation.
Posted on 3/23/15 at 9:55 pm to Croacka
He may have put a decent amount down.
I think 50% of gross salary is decent, I'm currently at 28% and my monthly note is 5% of gross monthly income.
I think 50% of gross salary is decent, I'm currently at 28% and my monthly note is 5% of gross monthly income.
Posted on 3/23/15 at 10:02 pm to SomethingLikeA
If you make 100k and buy a 100k car, you'd have to put down 45k to get a monthly payment that's only 13% of your monthly gross (financing at 54 months). That sounds like a terrible decision.
Posted on 3/23/15 at 11:06 pm to SomethingLikeA
Yeah, but at 1083 a month for 54 months is a 60k car. Not anywhere near 100% of your salary if you make 100k a year.
Posted on 3/23/15 at 11:15 pm to ZacAttack
My guidelines for maximums are 59% of annual income for a car and 3x annual income for a house.
Those aren't targets, they are caps.
100% is insanity.
Those aren't targets, they are caps.
100% is insanity.
Posted on 3/24/15 at 7:35 am to SomethingLikeA
That seems a little high. Although, when I bought my truck my note came out to 5% of my monthly income and I made 3 payments per month to pay it off in 2 years. So, I was paying 15% and it wasn't too painful. Mostly because I knew I was way ahead on payments if something came up and I didn't pay on it for a couple months.
Posted on 3/24/15 at 8:16 am to SomethingLikeA
The more expensive the car, the more expensive the repairs.
Buying anything more than standard cars/truck/suv (Sonata/Camry etc) is stupid unless you have zero money concerns. If you get some thrill/joy out of it, then it is reasonable to pull from your entertainment/joy part of your budget.
You make your budget then fit your car to your budget. Budget should not expand. If you are willing to sacrifice non essential spending in other categories, go get it tiger
Buying anything more than standard cars/truck/suv (Sonata/Camry etc) is stupid unless you have zero money concerns. If you get some thrill/joy out of it, then it is reasonable to pull from your entertainment/joy part of your budget.
You make your budget then fit your car to your budget. Budget should not expand. If you are willing to sacrifice non essential spending in other categories, go get it tiger
Posted on 3/24/15 at 8:41 am to GenesChin
This is simply MY opinion on the matter, but...
What exactly do you need a car that costs more than 500/month for? Regardless of income. And honestly, I think 500 is high. At our house we have a nice used (42K miles at purchase) SUV and a nice used crew cab truck (11K miles at purchase) and the notes combined on those are less than 700.
Do people really pay that much for car notes that depreciate like crazy?
ETA: I take that back, a little. 35,000 at 3% for 6 years is around $530, which isn't unreasonable...but I think you need to make a lot more than what the typical person driving these types of vehicles actually makes....
What exactly do you need a car that costs more than 500/month for? Regardless of income. And honestly, I think 500 is high. At our house we have a nice used (42K miles at purchase) SUV and a nice used crew cab truck (11K miles at purchase) and the notes combined on those are less than 700.
Do people really pay that much for car notes that depreciate like crazy?
ETA: I take that back, a little. 35,000 at 3% for 6 years is around $530, which isn't unreasonable...but I think you need to make a lot more than what the typical person driving these types of vehicles actually makes....
This post was edited on 3/24/15 at 8:54 am
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