True story, with bonus question
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I'm a member of a group of people who have access to wholesale vehicles, and members often ask each other for advice on things they are interested in owning personally.
Recently, someone posted something about the bank approving him for some shit like over $700 monthly for some BMW. Maybe I should have read it better, but the numbers scared me away.
Not having a car payment, and having never had a car payment, that number is grossly terrifying to me. In a related note, my previous job took note of my hooptie 91 Miata that I DD, and I was told multiple times, "you know, you need something reliable." Sure, the miata broke down on me a few times, maybe a few more times than they know about, because I fixed it roadside many times.
My response was always, "I don't get paid enough to take on a car payment." Every time I would just get side eyed, as of they thought I made enough to stand a chance with modern dealership financing bullshit. Thankfully, I dont work there anymore, and as a bonus, I drive my car less and less, leading to less breakdowns.
What say you, Hyphen, what is the most you would ever be willing to spend to pay for a car monthly? Not really the full term, just your upper limit for a monthly car note.
For me? $150. If I have to spend more than that? No deal.
HEMIWagon
91 Miata
SL600 Sport -
$600 a month CAD is my limit.
Also, long time no see. -
Me? I'm not interested in having a car payment and if I was it certainly it would probably be a good bit per month for a short term loan. It's the long term loans that scare me.
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$300 is my limit. Any more would stretch my budget just a tad too much for my liking.
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I've got to the point in my life where the wife and I have no debt at all. At age 37-38 we own our house, cars, bike, bicycles, trailer, appliances, etc. I'd be extremely wary of debt in this economy.
Having no debt has allowed me to be unemployed since April and not give a shit. I've never been on employment insurance in my life before so I've been taking it guilt free while physically helping out REALLY immune compromised family this summer. Even if I got a job tomorrow I'd still stick to the "either I can afford it with cash, or I can't afford it all all mentality". That thinking has really saved our bacon. And left money FOR bacon. -
First off, whoever says Miata's aren't reliable doesn't know anything about Miata's. Also, I'm with @sn4cktimes, I pay cash for all my vehicles and if I can't then it's too expensive for me. It's worked well so far in my life.
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It's all relative for me. I make good money and had to get a reliable car as my 01 Town Car was slowly biting the dust. I put some money down and bought my Mini, paying $200 a month for 3 years. Should I have just bought a car for 2 grand and called it a day? Sure, but the idea of buying a newer vehicle with recent work was fun so I went for it.
Was it a bad idea? Not really, it helps build my credit and gives me piece of mind that I'm not throwing $200 worth of repairs, parts, and my own labor at a car every month.
Will I do that again? Probably not, unless it was for a dream car (Alfa Quad, Delorean, or C8 Corvette Z06)
My wife on the other hand... She likes the finer things in life. I've shown her that old can be fun (Project $400Runner, my buddies free boat, etc.) but she still likes her cars and phones newer. So she has her Jeep Renegade. Now we're selling that because she wants to clear our debt before we get married and buy a house. Not a bad idea, but she's already eyeing up new Bronco's and Gladiators. I ask her "How much do you want to pay, not what can you afford?" and I get hit with low numbers (200-300/month) so I tell her that's going to need a big down payment. At that point, why not buy an older truck/jeep/suv and not pay monthly?
That argument goes over the head, but we're still working on it. In my mind, if I choose to spend my money monthly on a car/boat/toys then that's me saying "I've decided I've wanted this item in new condition, so bad, that I'm willing to pay someone else for 2-5 years so I can enjoy it during that time." It makes me pause a lot.
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@jgrabowmst I am currently at my limit. ~$520USD/mo for the Kona on a 48mo loan. I don't think I could ever stomach paying more than that. I could have paid less a month with a longer term, but I'd rather have it paid off before we use up the 100,000 mile warranty. I also have a $320/mo payment to John Deere for a hay baler, which puts me at a painful $840/mo. But we own our house outright, so I have no rent/mortgage payment and I have paid down my credit card debt down below $2000 now, so that monthly bill is pretty low, I'm paying it off at double-minimum/mo and not adding to it unless there's an emergency (knock on wood).
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My Ranger was at $350cad, at the time I thought I would be comfortable going upto $500. But after I paid it off I'm like $0 is much better.
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I'm at $600 on my Cayman but my rationale was paying more for something that gives me joy almost every day of the year is worth it as big a hobby and means of conveyance.
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I think warranty CAN be another good reason for monthly payments. And there can also be something said for having a "current" vehicle that dealership mechanics know how to work on. If I tried bringing my Eagle or Rampage into a dealership for trouble-shooting... good luck.
'88 AMC Eagle, '15 Husky FE350S -Oppo Never Dies!
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@sn4cktimes if you find an old Dodge dealer, I bet they got an old timer who can do some work!
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@jgrabowmst It depends on a lot of factors; business requirements, debt-tolerance, snackbracket, car allowance, even tax strategy.
Then, on top of that, there's psychographics. That's what marketers are interested in. Simply put, it's the reason why, if you look at two individuals that are statistically very similar (race, sex, income, age, family unit, financial health) that one would buy a used minivan and one would lease a 4 series. -
I don't understand the logic of not taking out a car loan when appropriate. You can get a new car with a $500 payment..... or just drop the $30k+ all at once.
If you can save the $30k up front, you're better off taking the loan and keeping the money invested. Where people get into problems is buying something they can't afford with zero backup savings.
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@jgrabowmst Monthy? $500.
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@cb Total or per vehicle?
Curator
1986 Dodge D100 & 2021 Jeep Wrangler Willys -
Ironically, I work in finance and approve millions of dollars of car loans annually - yet I don't have a car payment myself. I buy used, rarely with less than 100,000 miles and pay cash for "cheap" cars. I maintain them meticulously and usually drive them for years.
I HATE car payments (actually hate any debt), and it's worked for me so far....
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@carsoffortlangley So far, total, as I only have one car and constantly tell myself I can't afford another car payment.
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I pay $187 a month on my Fit and I'd have a hard time justifying much more than that...
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@cb luckily my cars are all paid off, so I could do a bit more for another.
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The most recent car payment that I had that I felt was reasonable worked out to be about 5% of my monthly income.
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@jgrabowmst Mine is $450 max over 5 years.
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@jgrabowmst the highest car payment I’ve had was 240/month. I actually paid more like 300.
I think for the next 10 years or so 300 would be my max, but once the montage on our rental property is paid off I might feel differently. Maybe then I’d actually buy a new car/truck. -
@jgrabowmst It really does depend on the individual. My goal has been to generally have only one or no car payment, and if I have one it has to fit in with an overall budget that starts with significant payments to savings. And I always want to make a downpayment that basically eliminates the risk of being underwater on a loan.
But if I had to give a specific answer, a year ago I took out a loan that requires US$500/month payments on a 60 month loan toward my Outback. I felt that this was a good number.
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@nermal In my case specifically, I was in a position of living paycheck to paycheck when the issue came up for me. My Miata was a $1200 purchase, plus maybe $700 of additional parts, the rest being my own labor. This car has also paid for itself multiple times over in the mileage reimbursement I used to get.
To live paycheck to paycheck and then get pushed into a position of, "hey, here's even more money you need to spend," it's just not feasible. Also, when a company that expects you to travel daily tells you they do not provide company cars, they should not be able to complain about whatever their employees drive.
I could count on one hand the amount of times it was an issue, but on the other hand, many clients loved it or told me about their own Miatas. You could say management were not car people.
HEMIWagon
91 Miata
SL600 Sport
