This forum is talking me out of buying

[Lou Hamilton]

I’m with you on this one...I’m very surprised by some takes on here. So someone that has an $800k salary is bringing home, after taxes, about $40k per month. @carymccarr is suggesting that person shouldn’t buy a $200k car.

Assuming that person is taking a regular old car loan at 3.11% (which is almost certainly not the case...they’re likely instead paying cash, leasing, etc), that’s a $3,600 payment, or 9% of their monthly income. That is high, but not absurd. Certainly not if they have a low house payment, no house payment, etc.

If you limit yourself to buying a car valued at 5% of your taxable income, you’d have to be making $1.6mil in taxable income a year to be able to “afford” a platinum Expi. I don’t know too many folks making that kind of money a year (and I work with several) driving a Ford.

Of course all your other expenses come into play, but that just seems wildly conservative. To each their own, of course and certainly someone using the 5% guide as @carymccarr suggests should be commended for their restraint.

Again, I’m not arguing here, I’m just fascinated at the take. And it is certainly not the approach taken by most given the average salary in the US is $56k and the average car sales price is $36k. (Granted, someone making $56k should absolutely NOT be buying a $36k car, but the numbers are informative.)

Good points. A solid debt to income ratio could allow for someone to afford a $200K car on even less than $800K. Other than my new car payment, we have another 0% loan on my wife car which will be paid off this year. We keep a rolling credit card balance for our credit scores. That's it. No mortgage. No other car payment or loans.

I make good money, but nothing even remotely close to $800K. Most of what we have as monthly bills are "wants" -- NetFlix, Disney+, etc.

A fiscally smart person, could probably easily pay for a $200K car with even a $400K or less salary. Heck, start a YouTube channel and let it pay for your toys. There are enough of them out there doing just that. I only hope they are also banking some money because that will not sustain long-term (IMO). I know we mentioned him before, but AutoVlog seems to be the most honest and has shared some of his YouTube income. They can make good money, i.e., more than me, but just recording and posting videos. That being said, it is not that easy. I watched an interview with a video gamer YouTube person who said that each 10 minute video takes about 14 hours to make -- record content, review content, re-resord content, review content, edit, upload.

BTW, this thread has really gone off the rails. LOL!!!

Congrats on the new ride, Dice Roll. Hope you get the error codes worked out.

 

[carymccarr]

I’ll tell you guys, 800k is so far into 1%er territory it’s hard for most to understand how much money that is. Those are exactly the people that can pick up a 200k car and it’s not an issue. Two back of the envelope formulas you can use are House is 2.5 times your gross and car is half gross. So 200k car is not a sweat for 800k.

Wholeheartedly disagree. But I’m conservative when it comes to $$$ and particularly debt.

 

[Artie]

Wholeheartedly disagree. But I’m conservative when it comes to $$$.

I agree with you. Just because you can afford it doesn’t justify the purchase. Saying otherwise is a good example of why people with money keep and grow their money and retire early versus living paycheck to pay check. FIRE all the way.

 

[Artie]

BTW, this thread has really gone off the rails. LOL!!!

You must be new around here lol this happens with any thread that makes the 8 page mark.

 

[carymccarr]

You must be new around here lol this happens with any thread that makes the 8 page mark.

Right and it is also completely dependent on other debt/expenses. Mortgage free? Loan free? College tuitions are funded? Retirement funded?

Make $800k? Go for it and buy a $200k car.

 

[JExpedition07]

Right and it is also completely dependent on other debt/expenses. Mortgage free? Loan free? College tuitions are funded? Retirement funded?

Make $800k? Go for it and buy a $200k car.

I haven’t read through this whole thread but another thing that throws it off is in the finance department and how they lengthen terms. A depreciating auto should not be financed beyond 2 years (24mos) from purchase. I see a lot of people with long term loans.....many individuals end up upside down in old trucks because of this.

 

[mhExped]

I see a lot of people with long term loans.....many individuals end up upside down in old trucks because of this.

When I bought my Expy, I chipped in some cash along side my trade-in, despite taking out a 0% loan. I kept getting questioned by those I dealt with at the dealership, "Why would you add cash to your trade-in? You've got a 0% loan." I kept explaining how I wanted to minimize the risk I'd ever find myself updside down in the loan and kept getting blank stares in return.

 

[Artie]

When I bought my Expy, I chipped in some cash along side my trade-in, despite taking out a 0% loan. I kept getting questioned by those I dealt with at the dealership, "Why would you add cash to your trade-in? You've got a 0% loan." I kept explaining how I wanted to minimize the risk I'd ever find myself updside down in the loan and kept getting blank stares in return.

You were probably getting back stares because they expected you to also pony up for the optional GAP coverage. I think they just expect people to be upside down in all the vehicles they sell since most people live in a bottomless sea of debt these days.

 

[StealthyBulldog]

most people live in a bottomless sea of debt these days.

Come on in!! The waters nice!

 

[Calidad]

I’ll have to read through this stuff later. Looks like an interesting discussion evolved? Just what I see on this page.

I’ll tell you guys, 800k is so far into 1%er territory it’s hard for most to understand how much money that is. Those are exactly the people that can pick up a 200k car and it’s not an issue. Two back of the envelope formulas you can use are House is 2.5 times your gross and car is half gross. So 200k car is not a sweat for 800k.

Except when you make 800k you don’t buy 200k cars. Lol you buy income generating stuff that then off sets your depreciating toys. The only people who buy $200k cars that aren’t covered by a income generating investment are Ball players, rap stars and young single Stock traders on speed pills.