What is your monthly payment? Please read.

Whether you like it or not, financing keeps this comfortable system we live in, going. I bought my 2015 GMC 1500 All Terrain for 44K OTD with TTL. Sticker was $53,750. My monthly payment is $638 with a 2.3% rate. Its more than my mortgage and It is a great truck but I get bored with it. Considering a tacoma or power wagon lol

 

Man do I have some stuff to sell to you! Haha

 

I was bored at work and looked on the dealer's site. Called and asked a couple of other questions, then asked the miles thinking the website was wrong and it wasn't.

I looked at it that day and they were still doing the Certified inspection so I couldn't drive it till the next day but gave them a deposit which would be refunded in full if I didn't care for it.

 

It also keeps a lot of uninformed and uneducated (on personal finance issues) in debt. If this is the "feed" for "this comfortable system" --then we NEED to change the feed.
Also if financing everything you buy is your idea of comfort??? Oh well! you should how it feels to owe nobody anything!
Also you may want to talk to some old person who lived through the depression about "comfort"
I'll get down off of my "soapbox" now.

 

Monthly payment = 0
I've never made a monthly payment in my life on any car and I'm 48.
I've always paid cash.
As soon as I buy a car, I start saving for the next one.
I drive every car into the ground. This gives me enough time to save for the next car.
Why pay the bank interest when you can be earning the interest?
Eliminate your debts. Trust me, you'll be much happier when you do.
Trying to keep up with the Jones' all the time will just leave you in misery.

 

AMEN --and congrats
PS --get that home paid off and you will really feel free!! Lord! I am starting to sound like Dave Ramsey.

 

Save your money for house during your 20s and continue to rock the truck in your avatar, build that into a wheeler and buy a nice dd when the time is right. I agree with everyone else and dont depend on GF's income, and DO NOT go halves on aything because if/when you break up now you have this weird who keeps what thing going on. Take this time in life to have fun, build credit, save money, and not care what other people think about you based on what you drive. Im currently 33, have a house with my wife, i have my smashed up wheeler/toy 1st gen that i bought used in 2005 and a free 1999 camry that i dd while working in a very professional job. We were able to buy the house in our late 20s in 2009 because of the cash we had stacked up by not buying new cars in our early/mid 20s and were able to jump in while the market was at the bottom. Wife now has a decked out 2015 camry xse that we bought new (first time for both of use buying a new car).

Some of the intrest rates you guys are paying are nuts, i know its apples to oranges, but we have a .9% rate on the camry!

 

I agree with your post. You shouldn't be buying a new car unless you have half of your current salary saved and the monthly payment you take on for the new car plus your other obligations doesn't prevent you from saving at least 1/4 to 1/2 of your take home pay.
Also if you're a spender you shouldn't buy a new car either. I pack my lunch to work every single day and only eat out once a week. Some folks go out to lunch every single day while they are at work which obviously adds up.
I don't go out to clubs and bars so therefore I am not wasting money there. I don't have cable and I use a cheap android phone with $35 per month service with US cellular.
I manage to save $1000 a month because I am not a crazy spender and my monthly payment on my truck is 10% of my take home pay. I am saving a lot for a house when I am ready to buy which probably won't be for another decade as I am single and don't need the extra space and expense of a house.
Everyone should do an analysis of their financial standing before making a big purchase like a $35-40k vehicle.

Yes the finance rates on a Camry and a Tacoma are apples to oranges. Most Toyota dealerships sell a Tacoma within 14 days while it takes 30+ days to sell a Camry. Most dealerships have an excess amount of Camry inventory on their lot which is another reason they offer 0% APR. the dealership I bought my truck from had 150 Camry models in stock but only 20 tacomas in stock.

My cousin bought a RAV4 at 0% APR and he had a lower credit score than I did when I bought my truck and the best interest rate they offered my was 3.9% and they claimed that was the best they could do and my score was in the high 700s.

 

You finance everything regardless of what you think. Whether its retirement, mortgage, health care, you finance it. Your comforts isn't just about personal materials. This includes health care, public service, roads, etc. If people didn't finance, you wouldn't see shit for taxes. Property taxes, sales taxes, excise, etc. My response is towards those that are against financing and wear the tin foil hats cause big brother after ya

 

Most of these comments, predictably, only cover the saving and spending side of the equation. The "money out" side.

@Cxavier2206, You sound like a very responsible saver. you would probably feel immediate stress at hearing I pay $3,000/ month in car payments. I do. Are you stressed out?! I promise you'd feel better if you saw my full financial picture.

The premise seems to be that "you make what you make", without taking into account the career path you might be on and how soon your station is likely to change.

I also think it's ok to have some areas where you buy based on emotion. Just because it increases your overall well-being. That's an important part of being human.

Savings goals are laudable, but saving 50% of $1, is still just $.50.

But the truck. Future you will thank you.

 

I never said I was "against financing" -- the point is one has to use it wisely! One more ?-- what does this mean -- your statement--"If people didn't finance, you wouldn't see shit for taxes"???? I do not understand your point. And if you mean what I think you mean --sure it works well when things (especially governmental things) are financed. I just love buying "State, federal, and city bonds --collect the interest --THEN when tax time comes around --pay ABSOLUTELY NO TAXES on the earnings.

 

I'd vote for saving your money. While I bought a new 16 tacoma, I traded in a 15 corolla that was getting 37 Mpg....only issue was we live in new england and it was a no go in the snow for work etc. That being said I went from 230$ a month on the corolla to over 600 with the truck. Have I mentioned to save your money? We pay a mortgage and both have pretty good jobs for the state of CT but if I didn't need to get to work in the snow I'd be driving that corolla until it died...and then just a little bit more. The jones' are very difficult to keep up with lately, it costs a lot to be hip or in fashion.....look elsewhere for some joy and fun in your life it'll be beneficial when you're looking to own a home.

Joe

 

Like I said, my statement was towards those that were saying to "never finance and if you don't have the cash, you can't afford it". I obviously was not responding to you other than this

"It also keeps a lot of uninformed and uneducated (on personal finance issues) in debt. If this is the "feed" for "this comfortable system" --then we NEED to change the feed.
Also if financing everything you buy is your idea of comfort??? Oh well! you should how it feels to owe nobody anything!
Also you may want to talk to some old person who lived through the depression about "comfort"

Your question:

"what does this mean -- your statement--"If people didn't finance, you wouldn't see shit for taxes"???? I do not understand your point."

What I mean is, if people never financed with the "if you do not have cash, you can't afford it" logic, then governments wouldn't collect the sales taxes, excise taxes, property taxes etc. Because most people cannot afford a 30-40k truck out of pocket of a 150k home. The comfort of finance allows the ability to purchase these, thus contributing to the system. I'm not saying the system is perfect either.

take care dude

 

Joe if you are (were?) a firefighter you do NEED to get to work -- where in CT.? I have a brother in Simsbury.

 

We shouldnt be taxed at the level we are anyway.

 

http://www.mrmoneymustache.com/2011/11/28/new-cars-and-auto-financing-stupid-or-sensible/

This guy you could call an extremist but what he's getting at makes a lot of sense.

Like a lot of people have said though. Life changes on you and hits you hard, just cause something looks affordable now, you'll be tied into a car loan for years. Jobs get lost, girlfriends get pregnant, other things, you get the idea. If you can't keep on with your current truck I'd save up for something I could pay cash for. It'll mean NO payments, NO interest, LOWER insurance, etc. And if you buy smart it'll last you longer than you may think it will, at which point you'll have saved up that money you'd have otherwise been paying the bank with, and can buy another great truck cash with NO payments again!

That said I got my truck a year ago, financed $12K on a low mileage $25K truck. I have a $250/ mo. minimum payment but I pay more to pay the truck off faster. I do not reget buying my truck, I love it, but if I had come to my senses earlier I probably would have just bought a truck with the $12K cash I had at the time.

 

I admit I haven't read every page, what did you end up deciding to do? Any of this advice inspire you?

 

Also just to clarify especially at your age (I'm not that much older) I think buying used is definitely the best option. Many may disagree but the instantaneous depreciation you get driving a new car off the lot is a bear. With Tacomas it may be a little less of a hit, but its because of general reliability, which is a good reason to trust a properly maintained used one.

 

I agree with the posters that suggest paying cash or, at a minimum, having a large down payment. Making in the high teens hourly means you are making less that $40k.

Lets just use $40k since its a round number. You take home after taxes social security (if I am being generous) would be ~$1980 a month.

The rule I've heard is no more than 15% of your take home should be spent on transportation. 15% of 1980/mo is $297---BUT REMEMBER thats 15% for transportation which needs to include gas, insurance, payments, etc. Insurance for a 4x4 for a 22YO male isn't cheap. I'm guessing $90+/mo for decent coverage (for a new car its going to require full coverage too--buying a cheaper used could mean only liability if its paid off).

I dont know how much you drive but lets say 2 tanks a month at $45/tank = $90.

So you would be looking at a $117/mo payment. A rule of thumb for payments is every $5000 financed is $100/mo.

You could reasonably afford a $6,000 vehicle.


Does this sound crazy? Do you see dozens of friends that make less than you driving really expensive cars? You know what? They can't afford the cars tehy are driving. They are probably broke and up to their eyeballs in debt.

Do yourself a favor and set your future self up to be independent! Buy a nice used truck and stack away cash. Pay yourself a $450 car payment every month. In 5 years you would have $27K.

 

2017 SR DCSB 4x4 V6

30,700 Out the Door, Put 5k down. Financed 25,700 on 84mo @ 3.19% = $343 mo.