Auto loan as % of income

[Dadhawk]

Originally Posted by Sprinterboy

I Live in DC. It was painful enough to set up a bank account with Bank of America.

I've spoken to a few dealerships and they do have some compashion which is nice and may be able to help out with some sort of finance option as its not totally uncommon in this area.
Whats a good rate over here? Ive seen adds for 1.9%. Thats crazy low for a new car!

I'm still on the understanding that I'll have to work up a credit score for pretty much everything. so Credit card is the only way to go for me for now.
The bank was nice enough to give me a sizeable limit to start with. (after many calls from my embassy stating my employment/salary etc)

I just want to get behind the wheel and get to some track days. I miss my AE86!

BoA! UGGGGH, run away, run away! I've never had a good experience with them, but of course YMMV. I only do credit unions these days, you might want to check one out, assuming you can get an account (they do have some member restrictions, but I think those have for the most part disappeared now). The advantage to a credit union is the are "nonprofit" and you are technically an "owner".

Lots of car loans available under 3% and a few under 2% so it wouldn't surprise me you are seeing one that low.

[civicdrivr]

Originally Posted by Dadhawk

BoA! UGGGGH, run away, run away! I've never had a good experience with them, but of course YMMV. I only do credit unions these days, you might want to check one out, assuming you can get an account (they do have some member restrictions, but I think those have for the most part disappeared now). The advantage to a credit union is the are "nonprofit" and you are technically an "owner".

Lots of car loans available under 3% and a few under 2% so it wouldn't surprise me you are seeing one that low.

Stay far far away from BOA. I have a credit union and love it.

[Hix]

Heh, BofA screwed me over on a credit card. I had 10k taken out on it at one time and TRIED to pay it off but that didn't work. I would put like payments of 1-2k each time and they would only apply 100 or so to principle and the rest to interest. I called to complain and they said interest is paid before the loan principle. Finally got most of it taken care of now but I think taking out a quick 10k ended up being around 20+ grand out of my pocket. STAY AWAY FROM BofA.

That being said any credit cards will almost always be stuck on your record. This means furniture purchases and jewelry will always impact your credit score since they are premium cards. Best to not get a credit card at all and just let those purchases be your credit card statements. If you require one or want to keep some kind of balance to raise your score get a gas card and pay all but 100 bucks off each month.

[finch1750]

Originally Posted by ayau

also consider this:

unless you have a lot of disposable income, it's probably not the wisest decision to dump 30k in a brand new car considering that you're only paying ~2k of total interest (depends on your interest rate) over 5 YEARS.

i really doubt most americans have 100k just sitting in their accounts. even if they did, you're throwing away 30% of that money on something that has depreciated the minute you drive away from the dealer. also, wtf are you doing just letting 100k sit in a virtually no yield savings account?

what happens if you lose your job or your spouse loses hsi/her job? if you don't want to pay so much interest, then pay more than the monthly requirement. there's no penalty for paying off your loan early.

my point is this: with today's low interest rates, it's really a no-brainer to finance the loan instead of paying it all off in cash.

This is a great point. Being able to pay off extra each month as well as put a little bit more away just in case is exactly what I'm doing.

Originally Posted by alyon

I am kind on the same route. I am able to justify this luxury expense due to my rather conservative spending on everything else.

In comparison to other 25k cars the FRS is actually a cheap car to own. little boxer NA motor, simple interior, cheap tires/brakes, fairly good gas mileage, and lowish expected depreciation. Insurance isn't even bad... yet.

I think that not everything needs to be looked at as an investment. Maybe some things we buy just because we want to enjoy life. Getting to the OP, there is no set number. My car takes up around 17% of my income each month, but I also own my home and have no school loans. It's all about disposable income. My bills account for around the same leaving me around 60% of my income to do what I want with, where 20-30% goes into savings. Debt isn't a bad thing. The world runs on debt. And whoever said saving is the way to go like in the old days is wrong. Spending money is how you get out of a recession, overextending yourself is dumb. That's how all this started in the first place. To go farther, despite how much we hate them banks need money. Them having money will get more money into the economy.

So do the math. Car expenses versus disposable income. Can you cover yourself if something breaks? How secure is your job? Can you afford it if you lose your job?

If you get through those, who cares if it depreciates, just enjoy the damn car!