Warning

 

Close

Confirm Action

Are you sure you wish to do this?

Confirm Cancel
BCM
User Panel

Site Notices
Posted: 1/29/2011 11:42:45 AM EDT
Been looking at new / used trucks and cars.
Damn have things gotten expensive.
I recall days of youth when $10k could get you a dream car.
Now that is a downpayment on a run o' the mill new vehicle.

What percentage of your monthly take-home pay would you be willing to spend on a car payment?

5%?
10%?
More?
Less?

I've been wanting a new truck for a while...I've nevver owned a new car or truck in my life....always bought used. I want something nice...like a fully-loaded vehicle with all the bells and whistles...I've worked my ass off for 20 years...I want to treat myself to my first really nice daily driver....then I looked at price tags.....FU! Anywhere from $40k-50k or even more for a new top-of-the line 4x4 truck.

That isnt happening....I can pay off a nice chunk of my mortgage with that kind of money...cant imagine spending it on an automobile that will be worthless in 6-7 years.

Now looking at used trucks again...trying to find something with low mileage from 2009 or 2010.
Its not that I cant afford to buy a new vehicle....I simply cannot possibly justify spending that much money on a truck.

I'm thinking that I'm willing to go 5% max on my monthly net income.
More than that seems like a lot...or maybe Im just getting really frugal in my old age
Link Posted: 1/29/2011 12:02:04 PM EDT
[#1]
PAYMENT?
If you cant peel  off sufficient hundred dollar bills... than you cant afford it.
Link Posted: 1/29/2011 12:06:07 PM EDT
[#2]
Quoted:
PAYMENT?
If you cant peel  off sufficient hundred dollar bills... than you cant afford it.


Agreed...with the exception of my mortgage, I have the cash to back any purchase I have made (although I will use credit and not tie up my cash for some things)

Which brings me back to my overarching point...I simply cannot justify spending more than 5% of my income on an auto. (alternatively I could say that I simply cannot bear to part with a stack of 100's as big as would be required to get a new truck)
Link Posted: 1/29/2011 12:06:59 PM EDT
[#3]
I won't take out a loan on a car.




I also won't pay more than 10k, and will never buy a new car.




 
Link Posted: 1/29/2011 12:08:42 PM EDT
[#4]
Link Posted: 1/29/2011 12:10:14 PM EDT
[#5]
Link Posted: 1/29/2011 12:10:56 PM EDT
[#6]
I don't finance cars anymore  but I put aside about 25%  every month for the next one



in teh past I have done 20-30% as I drive 120 miles a day and want a a reliable nice vehicle I like as i spend 3 hours a day in yhe thing

Link Posted: 1/29/2011 12:11:15 PM EDT
[#7]
I'd only finance if I can get 0% APR and make money by stretching the accounts payable (invest in CD/money market at the same time).
Link Posted: 1/29/2011 12:11:16 PM EDT
[#8]
I marked 6-10%.



We bought a new truck cash.   The wife's 05 Honda is paid for.   All other vehicles, Motorhome, bike and buggy were cash.
Link Posted: 1/29/2011 12:12:31 PM EDT
[#9]
Quoted:
0.00% I haven't had a car loan in nearly 20 years.  


Do you really drive a 1972 Ford Pinto ?

Edit ......I really crack myself up !!!
Link Posted: 1/29/2011 12:12:36 PM EDT
[#10]
When you can get 0% interest, why NOT finance?
Link Posted: 1/29/2011 12:13:23 PM EDT
[#11]
I am on the last year of my car loan, and I am currently spending 11.5%/month on my car.



In retrospect I feel that buying this car was a bad decision made in a moment of weakness. In the future I will pay cash for my cars.



I drive my cars until the wheels fall off and my experience with used cars is that they require a lot of expensive repairs. In the future I plan on buying a certified pre-owned car in the hopes that it will spend very little time in the shop.
Link Posted: 1/29/2011 12:18:27 PM EDT
[#12]
I've bought three new vehicles so far, the most expensive was $13K.  I generally buy used around $6K ..don't plan on buying new again for a while.  I'm thinking of buying my next used vehicle from the southern states where the body is in better shape...
Link Posted: 1/29/2011 12:26:26 PM EDT
[#13]
I am starting to think that the best investment might just be buying some nice new floor mats for my current truck

I will not spend 10's of thousands on an auto...and I will not spend half as much on a vehicle that I don't really want.

Maybe just better to not have a payment and drive something older.
Would be nice to have a fun vehicle to drive, but I'm not ridiculously wealthy, which what it appears one must be to get a top of the line car or truck these days.
Link Posted: 1/29/2011 12:28:05 PM EDT
[#14]
I am looking at buying a new or newer car within the next few months.  This will be the first time that I have ever bought a car on time and not with cash, however I am still pricing based on my cash reserves.  I am very hesitant about payments, being as the only payments I have ever made were to the Snap-On man.  My financial advisor is actually recommending that I borrow money for this,  not because I can't cover the price of a car, but because in this case the credit history is a greater benefit to the loss in money.  And with a better credit rating I will be able to get a better interest rate later when I go to buy a house.
Link Posted: 1/29/2011 12:30:43 PM EDT
[#15]
LOL, paid $50 for my first car: a '67 RS Camaro, in 1976.

Wish I still had it, among MANY others.
Link Posted: 1/29/2011 12:31:18 PM EDT
[#16]
Quoted:
I am looking at buying a new or newer car within the next few months.  This will be the first time that I have ever bought a car on time and not with cash, however I am still pricing based on my cash reserves.  I am very hesitant about payments, being as the only payments I have ever made were to the Snap-On man.  My financial advisor is actually recommending that I borrow money for this,  not because I can't cover the price of a car, but because in this case the credit history is a greater benefit to the loss in money.  And with a better credit rating I will be able to get a better interest rate later when I go to buy a house.


And with that...welcome to the site
Link Posted: 1/29/2011 12:31:55 PM EDT
[#17]
I have nothing against financing a car; it really depends on the perceived value of the vehicle.

At this very minute, I am prepared to spend about 25k on a Duramax powered truck with as low miles as I can find.   With my current income at about 40k (gross), that's more than 50% of my take home pay. I wouldn't dream of spending that on anything other than that particular truck. Regardless, I will not pull the trigger until I have at least 10-15% down, and can comfortably finance 3yrs.

Shit is much too expensive anymore to buy without credit, unless you're a high-roller, or like living in a Spartan environment.

For what it's worth, I have great credit and more-than-manageable debt, so I haven't been steamrolled by the "credit" train.
Link Posted: 1/29/2011 12:32:47 PM EDT
[#18]
Quoted:
LOL, paid $50 for my first car: a '67 RS Camaro, in 1976.

Wish I still had it, among MANY others.


In the 80's it would have cost me $3500 to get a nicely kept 69SS....and to this day I will never know why I didnt save harder I would love to get that car now...but its going to cost a bit more I think. (still cheaper than a new truck though)
Link Posted: 1/29/2011 12:35:06 PM EDT
[#19]
I never think about a purchase decision in terms of what percentage of my income a loan payment takes up, might make sense on a house if you're stretching to buy your first, but I think it's a bad way of thinking about financial matters.

I think 3 months take home pay is a good ballpark for how much car makes sense (purchase price), or 1% of net worth if you're in the investor class...it really depends on your circumstances.

That said, I drive fairly inexpensive vehicles, I look for 5 year old high-demand cars, none of my current ones cost anywhere near those benchmarks.
Link Posted: 1/29/2011 12:38:48 PM EDT
[#20]
15K used is my max.
Link Posted: 1/29/2011 12:39:29 PM EDT
[#21]
Quoted:
I never think about a purchase decision in terms of what percentage of my income a loan payment takes up, might make sense on a house if you're stretching to buy your first, but I think it's a bad way of thinking about financial matters.

I think 3 months take home pay is a good ballpark for how much car makes sense (purchase price), or 1% of net worth if you're in the investor class...it really depends on your circumstances.

That said, I drive fairly inexpensive vehicles, I look for 5 year old high-demand cars, none of my current ones cost anywhere near those benchmarks.


This is an interesting approach as well...3 months income.
Hmmm....honestly...still a lot of money.
2 months would suit me, but wouldnt get me much auto
Link Posted: 1/29/2011 12:40:37 PM EDT
[#22]
I would not be able to afford more than $1000 right now.  A very favourable loan (unlikely to be gotten) would probably put me at $5,000 max for a car.  I only paid a couple hundred for my current car although it did need a couple thousand in work.
Link Posted: 1/29/2011 12:41:32 PM EDT
[#23]
Pay full cash up front.  I also do buy new because I am able to pull off sweet deals because I have connections.  I also do a good job on resale because I full detail them and do all the maintenance routinely.

I just paid $37,000 for a new F150 Ecoboost
Link Posted: 1/29/2011 12:44:15 PM EDT
[#24]
1.  I'd never take out a loan for a car.

2.  Used cars have become so expensive because Herr Obama has a few million used cars destroyed.
Link Posted: 1/29/2011 12:44:58 PM EDT
[#25]
I couldn't tell you. If you have good credit, don't go for anything other then 0%. Just about everyone offers it. Use their money.
Link Posted: 1/29/2011 12:48:55 PM EDT
[#26]



Quoted:


When you can get 0% interest, why NOT finance?


Because 0% often means paying MSRP, or forgoing cashback offerings, and a lesser ability to haggle with the dealer?



There are those who are "financially sophisticated" and prefer a near $800 truck payment ($45K at 5 years 0% is $750 a month - a loaded F150 Harley Davidson will run $50K loaded) and keeping that $45K either "invested" or liquid, instead of maybe getting cash back and are simply playing the interest rate arbitrage game. Usually ignoring inherent risk vs reward (your car payment is certain, the gains on your investments are not)



But then there are those who don't have the cash, and just kid themselves they are being "financially sophisticated", when the truth is they couldn't cut a check for $45K at a weeks notice to buy the vehicle that they financed, even if they wanted to.



 
Link Posted: 1/29/2011 12:50:02 PM EDT
[#27]



Quoted:


I am looking at buying a new or newer car within the next few months.  This will be the first time that I have ever bought a car on time and not with cash, however I am still pricing based on my cash reserves.  I am very hesitant about payments, being as the only payments I have ever made were to the Snap-On man.  My financial advisor is actually recommending that I borrow money for this,  not because I can't cover the price of a car, but because in this case the credit history is a greater benefit to the loss in money.  And with a better credit rating I will be able to get a better interest rate later when I go to buy a house.


You need a new "financial adviser". He's an idiot with that kind of advice. Do you even know what your current credit score is?



 
Link Posted: 1/29/2011 12:53:28 PM EDT
[#28]
I bought my previous vehicles on the manufacturer's financing because it was 0%.   My last two new cars did not have that option, so I paid them with real money.
Link Posted: 1/29/2011 12:54:48 PM EDT
[#29]
I prefer not to finance.  I will never buy another new vehicle again, unless I win to lottery or something.



I drive sub $2K Japanese pickup trucks until they are ready for the scrap yard, then I buy another.  I prefer Mazda, Nissan or Isuzu extended cab models.  2WD is fine, but if I can get a bargain on a 4WD I'll take it.  Toyota would be great, but they hold their resale value so well that by the time they're under $2K they're not worth owning.  I can get a Mazda for $1500 that I can drive for years with virtually no trouble.  I commute about 3 miles to work with literally zero traffic and the farthest I ever drive these beaters is about 100 miles one way.



I try to keep the wife in a nicer vehicle than me.  She's presently driving a 95 Isuzu Trooper that just turned 95K on the odometer.  I think we paid a little under $7K for that vehicle in 2002 or 2003 - it had 25K miles on it when we got it.  We both love it.  I hope it lasts to 300K.



If I had to finance, I'd still be looking at used vehicles in the $10-12K price range and financing as little as possible for a short as possible.
Link Posted: 1/29/2011 12:57:54 PM EDT
[#30]
car loans are for suckas.......

Link Posted: 1/29/2011 1:00:19 PM EDT
[#31]
I would not finance one... I try to keep my bills as low as possible.

New cars are pointless.
Link Posted: 1/29/2011 1:04:38 PM EDT
[#32]
Simple, I'll do what is financially intelligent.

If at the end of the day, I take out a 3.9% loan and can use those funds elsewhere for a much greater return with my cash, I will finance.

Link Posted: 1/29/2011 1:04:55 PM EDT
[#33]
Quoted:
LOL, paid $50 for my first car: a '67 RS Camaro, in 1976.

Wish I still had it, among MANY others.


You got a deal and a RS at that...my first was a '67 hardtop Camaro I threw $300 for it
Link Posted: 1/29/2011 1:06:12 PM EDT
[#34]
I financed. Made sense since I can get a lower rate on my car then my mortgage, plus if we financed with Ford we got extra warranty and a garunteed payback if we total the car within 5 years. I save more money by putting it towards mortgage principle then by paying off the car outright by a few orders of magnitude. Since we basically live out of our cars and drive them for 10 years or more, I don't mind paying <30K for a nice new one.
Link Posted: 1/29/2011 1:06:41 PM EDT
[#35]
Whatever it costs to get the car I want.
Link Posted: 1/29/2011 1:09:29 PM EDT
[#36]
I have never bought a new car, my present vehicle was bought in July of 2008 with 22k miles on it for 14,500...its been paid off since December...roughly 2 and a half years to pay off...car payments are something most people just assume they will ALWAYS have and you will if you insist on always driving the latest thing to impress people with. I plan on drving this thing until it dies.
Link Posted: 1/29/2011 1:10:41 PM EDT
[#37]
Quoted:

Quoted:
When you can get 0% interest, why NOT finance?

Because 0% often means paying MSRP, or forgoing cashback offerings, and a lesser ability to haggle with the dealer?



I have never once paid MSRP on a new car.  Cashback offerings are usually a rip-off anyway.

Link Posted: 1/29/2011 1:11:11 PM EDT
[#38]
I read somewhere the rule of thumb is 20 / 4 / 10.

At least a 20% down payment.

Finance for no more than 4 years (48 months).

Monthly payments should not exceed 10% of your monthly income.

IMO these are good rules if you can't afford a cash transaction.  Getting upside down in auto loans is a mistake a lot of people make (but car dealers love...)

4073
Link Posted: 1/29/2011 1:13:17 PM EDT
[#39]
The most I've ever spent on an automobile purchase was $6000.
Most of them were a lot less.
Link Posted: 1/30/2011 11:31:48 AM EDT
[#40]



Quoted:




New cars are pointless.




I disagree.  The perceived need or want of safety and performance improvements is not pointless.  I update every 7-11 years whether I need a new vehicle or not.  



Hell, a couple of months ago the dealership gave me a $13K trade in value on my 2004 Tundra Double cab that I rolled in 2007.  How's that for re-sale value?    



 
Link Posted: 1/30/2011 11:48:40 AM EDT
[#41]
I said I'd never buy a new car... but when a 2-year old, out-of-warranty new model is within $3000 of a used one, and that difference can be made up with 0% financing vs. 6% financing, it doesn't make sense to buy used.

I also had enough cash to pay for the vehicle outright, but only paid about half down, because the value of having that money available for other things is worth it to me.
Link Posted: 1/30/2011 12:13:54 PM EDT
[#42]
I have a car fund that I put $400 a month in.  This covers vehicle maintenance and purchase of a new used car when the old one craps out.  I will rarely spend more than 5-7k on a car.  Cars are not investments.
Link Posted: 1/30/2011 12:15:46 PM EDT
[#43]
Paid cash for both the vehicles I have now. Financed my first bought vehicle, wrecked it, glad I'm out of the payments.
Link Posted: 1/30/2011 12:45:59 PM EDT
[#44]
Quoted:
When you can get 0% interest, why NOT finance?


This.

I helped my daughter buy her first car. We could have paid cash but Toyota had a Zero interest program going so we invested it for three years (back when you could get interest!) and scheduled it to pay the monthly payments. With the interest we got she was able to add options to her vehicle she would not have been able to afford.
Link Posted: 1/30/2011 12:50:03 PM EDT
[#45]
always buy used let some other sucker pay out the nose for the pleasure of the first few miles.



look around find last years model that you like.
Link Posted: 1/30/2011 12:53:15 PM EDT
[#46]
i bought my first car for 3500$ and drove it for more than a decade.
maintenance on it was dirt cheap as all the parts were "surplus" IE a early 90's GMC yukon, so parts were no longer in demand and the ones on hand were sold cheap.
my new car cost me 1000$ (2005 VW jetta with 40K miles) the engine is siezed and i am replacing it with one that has 10K miles.
if i do the labor it will cost me 800 in materials(engine and other ods and ends parts) if i pay someone to do it, labor will be 1200-1500$
so my new car will cost me 1800$-3300$
i will drive this one into the ground as well.

i was eying up a BMW 335 diesel, but it just does not make sense to drop that kind of cash into a car that some shithead can run into, dent, ding, vandalize in a second. and then my car is instantly worth a lot less on resale as well as quality of ride, etc due to irreparable damage.
Link Posted: 1/30/2011 12:55:11 PM EDT
[#47]
Cars have been our weakness but I think we're past that now. Once we pay these off, it will be cash only. We probably have close to 20% going towards 2 payments right now. If we're smart, we will have the higher payment paid off this year then we can work on the other one.
Link Posted: 1/30/2011 1:06:59 PM EDT
[#48]
Been driving for 25+ years and have never bought a new car. The most I've ever paid was about 20k for a 2 year old truck that retailed new mid to high 30's. I just don't see the appeal of a brand new vehicle when I can buy one thats 1-2 years old and save as much as 30-40%.
Close Join Our Mail List to Stay Up To Date! Win a FREE Membership!

Sign up for the ARFCOM weekly newsletter and be entered to win a free ARFCOM membership. One new winner* is announced every week!

You will receive an email every Friday morning featuring the latest chatter from the hottest topics, breaking news surrounding legislation, as well as exclusive deals only available to ARFCOM email subscribers.


By signing up you agree to our User Agreement. *Must have a registered ARFCOM account to win.
Top Top