Yep, my dad instilled in me the same logic. Don't buy anything you can't pay cash for. Excepting only primary residence...

0.9% financing (for well qualified buyers) makes the decision to finance easy, but it's nice to have the security of knowing you have the cash to back it up if the SHTF.

I hope I have the self control to actually give this a shot once I'm done with this car.

I couldn't agree more.

I've posted this before, but here is something to think about (also Dave Ramsey)

[ame="http://www.youtube.com/watch?v=BKyV8CTHeJ0"]httP://[/ame]<a href="http://www.youtube.com/watch?v=BKyV8CTHeJ0">www.youtube.com/watch?v=BKyV8CTHeJ0[/QUOTE]

Like the overall message of the video. A couple things I don't like about the video tho.

-I paid 5k for my beater. Within the first year, I put at the very least about 3 grand more in it (without regular maint. and gas). I'd be lucky to get that 5k back at the end of the first year. Much less the 3 grand put in to keep it on the road.

-12% return? In this economy? Please tell me more so I can get in on that! Nevermind the fact that he ignores market fluctuations, Uncle Sam and the mutual fund fees. Again if anyone is getting that in a mutual fund getting that after taxes and fees, let me know please.

I put down nothing and my payment is right at $380 and this was during the hype. You could easily get one for less now. Definitely doable for someone with your income as long as your credit is good.

You may consider the used market too. They are down to under $20k for a FRS and a little higher for the BRZ.

it might be for you two, but it's extremely, horribly difficult for me.. and it was heavily stressed in my high school, as well as by my parents.. that doesn't change the fact that i can't spend 15 minutes going over financial stuff without pulling out my hair..

I'm not trying to discourage you becoming a new twin owner, but if you have to ask, you probably can't afford it.

Sent from my Nexus 5 using Tapatalk

You may have gotten the wrong "beater" particularly for $5,000. I bought a 2004 Honda Accord with a little over 100,000 miles on it 4 years ago for my college aged son. It hasn't been in the shop for anything other than maintenance since. I paid exactly $5,000 for it. I know I could have sold it for the $5K after one year, not sure what it is worth now.


I can't defend the numbers, although the market has averaged that over longer periods of time. You can't look at the market on an annual basis. There have been years its done double that and years its gone backwards. Pick your number though, and you can make it work, it just takes more time.


Like I said in my post above, worse case, you pay yourself a car payment for 4 years, you should be able to buy a car.

Yea if I had to do it all over again, I would've found a Civic.

Right now, I've been paying myself a car note. Can wait to graduate so I can speed the process up.

That's really what it's about. Self control. You don't have to jump back into payments as soon as you finish off paying off your current loan.

I bought a used 94 Tbird in 1995, paid off in 1999. 'Payed' myself $325 a month and had a pretty good down payment for my Acura in 2002. I haven't had a car payment in over 10 years!

... but I am itching for something new.

Yeah, we can argue about the details, but the base concept is fundamentally sound.

Don't do back to back loans. Take some time in between and pay yourself.

Even if you do eventually jump back into another loan, you'll still be ahead since you can lower your monthly payments (and term) if you put down more up front.

:thumbup:

This has been the first "can I afford it thread" where I actually think the OP can.

My only question is if your payment is about $400 will you have cash left over or will your savings cease to grow as you pay this car off? If it's the latter then you'd be living paycheck to paycheck, a terrible terrible idea which is inadvisable.

The numbers don't make sense in a gut way, $40k a year, paying rent, bills, and student debt usually does not leave a lot of wiggle room for luxuries. I generally agree with dadhawk, if you can't afford to pay cash for it you can't afford it, I don't delve into the interest rates and investment returns and such but the idea is easily understandable. You make it sound like your a bit better off than intuition would lead us to believe (i.e. ridiculously low cost of living or you really enjoy ramen).

I financed my car, and I'm terribly glad I did. I payed it off in about a year. I knew going in that I could finance and pay it off in about a year OR I could have waited a year and payed cash. If I had waited I wouldn't have gotten the credit score bump from financing a large item, I would have been driving something else for a year, and I probably would have ended up with a mumbojumbo touch screen I hated. Sure it cost me an extra couple hundred dollars to the bank but that's the way the world works, it's hard to pay cash for everything.

Again it really boils down to this: will this car sap your budget such that your savings is no longer growing and you're living paycheck to paycheck? Are you prepared for the unexpected? If you can confidently answer these questions positively then all that remains is the self control required to keep yourself from digging a hole to bury yourself into.

Take a quick look at the classified section on these forums, notice how many are selling due to "changing life circumstances", they probably wouldn't have been able to confidently answer the two questions I posed above.

What seems to be the problem?

Take a deep breath, put on some chill music (or go to a silent room if you prefer), sit down, and figure out your necessary monthly expenses. Necessities are rent/mortgage payment, repayments of any debt you have (hopefully none), any kind of insurance you have, groceries, phone bill, gas, etc. Budget for these things that would be hard to live without first. If these things cost more money than what you make, then you are living beyond your means and need to cut back somewhere (move to a cheaper apartment, get rid of your data plan, etc; just because you want it doesn't mean you can afford it).

If you have money left over, make sure you are saving money (most experts recommend you have a 6-8 month emergency fund to cover your living expenses (in a liquid account, like savings); once you have that, you can save money for other things like house down payments, car down payments, or contribute to a Roth IRA or whatever kind of low-risk investments you may be interested in). After that, whatever you've got left is spending money. Spending money should probably be separated into a few categories, like restaurants, entertainment, clothes, and misc (everything else). Don't gyp on your saving just because you want to have money to spend, but you should probably at least leave yourself a little something just so you don't go crazy.

A lot of people use Mint.com for this kind of thing, but I recommend the envelope system (keep the money (except for your savings) either in actual envelopes in a safe place, or in a bank account with a spreadsheet detailing exactly what that money is for.

This is the most important part of a budget: once you have spent the money you have set aside for each part of your budget, you CANNOT spend any more. That's it, you're done. Spent all of your spending money but want a new pair of shoes? Too bad, you have to wait. Friends invited you out for dinner but you've already spent your budgeted allowance? You're staying home. And always treat credit cards like a one month loan. Never charge anything you don't have the money to pay for IMMEDIATELY. And if you're smart, you will use credit cards to reap the benefits of cash back rewards, added warranties, and other various consumer protections, AND you'll pay the card off EVERY MONTH, as soon as you get the bill.

I can do the math.

Assuming OP is paid a W2, ~$42000 a year translates into $31500 or $2625 per month.

Less rent food gas and ... a car?

Everyone's circumstances are different. Just remember that a car adds not just the payment, but insurance/registration/expenses associated with it.

If you don't have a total of $800 (double of what the car payment will be) to put towards the car, you're borderline "can't afford the car"

Just my two cents from prior experience. Much like owning a house, it's not just the upfront cost of the purchase you have to worry about when you buy a car.

-alex

This is actually fairly close. I really don't spend much on gas. I think I put about 40 in a month. Utilities fluctuate pretty heavily. I have propane heat in this house and it can get expensive during the winter.

Thanks for all the help guys. I sort of had a feeling it was out my price range, but now I know for sure. In the end, by the time I can afford it, maybe the car will come stock with a little more power (not that I am too concerned about that anyways). I really do not want to lease.

BUT, I do need a car, something I can rely on for longer trips. I really want something that is at least fun to drive in addition to being reliable.