How do people afford cars these days?

[rahvin]

<< There's alot to be said for conservation, but extreme frugality at the expense of enjoyment in hopes for something down the road isn't necessarily the answer. Suppose, god forbid, your father had passed away at 55. When would the enjoyment have started - never! >>



Maybe I come from a different school of thought but I don't believe you have to spend/waste all your money on stupid stuff to enjoy life. Frankly wasting 30k on a car that is worthless in 10 years when you can barely afford it just goes to show that you don't have the sense to manage your money. That same 30k put into a house can net you much more in the long run. It's called wise expenditure of money. I would rather in fact buy a cheaper car and spend the money on something more enjoyable like a cruise.

Of course anyone that doens't have 6months of salary saved in cash-like accounts (easily accesible) for an emergency sitituation is pretty unwise in life management. I would place it in the same ballpark as not having insurance.

 

[iamwiz82]

<<

<< There's alot to be said for conservation, but extreme frugality at the expense of enjoyment in hopes for something down the road isn't necessarily the answer. Suppose, god forbid, your father had passed away at 55. When would the enjoyment have started - never! >>



Maybe I come from a different school of thought but I don't believe you have to spend/waste all your money on stupid stuff to enjoy life. Frankly wasting 30k on a car that is worthless in 10 years when you can barely afford it just goes to show that you don't have the sense to manage your money. That same 30k put into a house can net you much more in the long run. It's called wise expenditure of money. I would rather in fact buy a cheaper car and spend the money on something more enjoyable like a cruise.

Of course anyone that doens't have 6months of salary saved in cash-like accounts (easily accesible) for an emergency sitituation is pretty unwise in life management. I would place it in the same ballpark as not having insurance. >>



i cant say i agree with you about the cruise/car thing, but i do agree that buying a $30,000 car when you cant afford it is jsut stupid. I have just about 6 months of cash in the bank, and now i am starting to get things that i want. My next thing is to move into a better apartment, or to get a very small, cheap house.

 

[ShizNitz]

<< Of course anyone that doens't have 6months of salary saved in cash-like accounts (easily accesible) for an emergency sitituation is pretty unwise in life management. I would place it in the same ballpark as not having insurance. >>



Six month's salary??? I don't know a SINGLE person that has that much in easily accessible cash-like accounts. In fact, I think that is the stupidest idea I've ever heard of. You could be earning 7-10% (or more) in the long run if you invested in mutual funds. Instead, you're only making 2% in your cash account. I don't know anybody that was laid off and couldn't find a job for six months. In fact, if I was laid off, I'll bet I could find a lesser paying job (80% of current salary) immediately and I'll bet I could be in a comparable job (90-100% salary) within 3 months.

However, IF I was laid off, and IF I couldn't find ANY job after six months, then I could still sell my mutual funds. The chance of all of this happening are slim to none.

 

[Ns1]

well i'll tell you how i did it...

put 7k down on a 15k car with payments of 250/month...

work 24 hours a week making ~13 bucks an hour

pays for stuff quite nicely...

oh yeah, no girlfriend hahahah

 

[munruss]

Screw the rich parent crap and get off your ass and get a job. I'm in my 2002 Pontiac Grand AM GT!

 

[vi edit]

Instead of a Galant, try looking into a year old Olds intrigue.

The '01's and newer will have the balance of the factory 5yr/60mile bumper to bumper warranty, and right now the intrigues can be picked up used for dirt cheap. Very good bargain if you are looking for a mid sized sedan in the Galant car class. I bet you could pick up a year old, fully decked out intrigue w/ under 20k miles for around $12-$17k. Awesome deal for a pretty decent car.

Just a suggestion.

 

[MichaelD]

<< "The Shaggin Wagon" by a few girls. >>



ROFLMAO! Heheh, that's funny. I do agree that as far as "utility" goes, family vans are very useful. You can pop out the backseat and put a box w/a 36" TV back there...pretty cool. But it's the stigma that goes along with driving one that is bad.

Sorry to say that 99.9% of all family van drivers aren't hauling kegs of beer or TVs; they are hauling 23 screaming children and it's usually a woman driving who is about to slit her wrists b/c she's trying to shave her legs while putting on makeup while yapping on the cell phone while drinking a latte' while yelling at the 23 screaming children and oh my god was that a stop sign?/????????

That's why they are Satan's Projectiles. I ride a motorcycle and can't tell you the number of near-death experiences I've had b/c of innatentive drivers.

I'm not saying that's you (you seem like a smart dude ) it's just that IT'S_A_FAMILYVAN!

But, to each his own. It be your dough, not mine. Good luck.

 

[kranky]

<< Six month's salary??? I don't know a SINGLE person that has that much in easily accessible cash-like accounts. In fact, I think that is the stupidest idea I've ever heard of. [snip] I don't know anybody that was laid off and couldn't find a job for six months. In fact, if I was laid off, I'll bet I could find a lesser paying job (80% of current salary) immediately and I'll bet I could be in a comparable job (90-100% salary) within 3 months. >>



Not picking on you, ShizNitz, but the chance of a temporarily-disabling injury or illness is another good reason to have that kind of money in the bank. You still might have your job when you recover, but in the meantime, no income. Most people do not have adequate disability insurance, even through their employer.

 

[SCSIfreek]

sORRY EDITED

--Scsi

 

[TAsunder]

I don't know where you all live but I can't get a decent house where I live for the same mortgage rate as a $30,000 car's monthly payments. And If I were to buy a house and move in 2 years, I'd probably lose about a whole car's worth of money in the process.

I love how judgemental people can be. Has it ever occurred to those of you who judge people (like me) with decent cars that maybe we derive pleasure from driving? I bought a new car less than a month ago. Before that, I was driving a '93 dodge spirit which had questionable heating properties. I'd never want to drive people around, and I'd hesitate when I had to go somewhere across town. I did have a nice stereo, which is the only thing that kept me sane on the (albeit short) commutes to work.

Now I have a new car, and I enjoy driving anywhere/everywhere. I don't mind stopping by the store for some milk on the way home from work, etc. It's all about what you get out of the car. My life is more balanced when I enjoy driving my car and feel good about being able to purchase something that is really just a luxury item. My car is now truly my sanctuary (whereas before it was more like my minor relaxation area).

On the other hand, I all but guarantee I wouldn't get the same pleasure from a house. Tons of maintenance, FAR more expensive, and a lot more responsibility.

Regarding SUVs, some may be nice, but a chevy trailblazer is not. I'm driving an '02 one around now while my car is having a minor scratch repaired (not my fault - I know you guys were imagining me dozing off in the sanctuary), and it's the worst vehicle I have ever driven, including the '93 dodge. I'll take a dodge caravan any day over this POS

 

<< but I've seen other people my age with sweet rides...how do they do it? >>


Many of them may have been driving since they turned 16. Usually insurance companies give you HUGE breaks when you have a clean record for 3 years.

Also consider that they are probably busting a$$ to have that nice piece of machinery they drive.

 

[Cyberian]

<< I don't know where you all live but I can't get a decent house where I live for the same mortgage rate as a $30,000 car's monthly payments. And If I were to buy a house and move in 2 years, I'd probably lose about a whole car's worth of money in the process.
>>

Whoa! - Where do you live that houses depreciate 30K in two years?
I want to make sure not to buy a house there!

 

[rahvin]

<< Six month's salary??? I don't know a SINGLE person that has that much in easily accessible cash-like accounts. In fact, I think that is the stupidest idea I've ever heard of. You could be earning 7-10% (or more) in the long run if you invested in mutual funds. Instead, you're only making 2% in your cash account. I don't know anybody that was laid off and couldn't find a job for six months. In fact, if I was laid off, I'll bet I could find a lesser paying job (80% of current salary) immediately and I'll bet I could be in a comparable job (90-100% salary) within 3 months.

However, IF I was laid off, and IF I couldn't find ANY job after six months, then I could still sell my mutual funds. The chance of all of this happening are slim to none. >>



I believe I first heard the 6 month figure reading one of Peter Lynch's (Managed the Fidelity Magellen Fund for quite a while) book. As Kranky pointed out there is more to life than losing a job. There are massive medical or personal emergencies. I had a major medical problem last summer and didn't work for 3 months. I DO have good disability insurance but I didn't see a check till 7 weeks after the incident. 2 months without income with a mortgage and medical bills starting to come in can REALLY tax your savings.

Second, I purposely said "cash-like (easily accessible)" to make a point that it doesn't matter if it's in a mutal fund, stocks or a cash account. But you need access to it immediately and absolutely need to be able to accept any losses you will take getting that cash immediately. Like I said, not having 6 months salary is like not having an insurance policy, cause when the bad stuff happens you won't have the cash to cover it.

 

[StageLeft]

<< I'm definitely in the market for a new car. My bucket-o-bolts is a 94 Mitsubishi Galant with 166,000 miles on it. I wouldn't even consider replacing it, but the suspension squeeks, my engine doesn't accelerate correctly, and I sometimes hear a "pop" from my right rod arm when I turn. I'm ready to trade it in..... I did some searching and to replace my car with a 2000 or 2001 Galant, it will cost $12-14 grand. I'm a college student and can afford that. However, I was sort of looking at the Eclipse Spyder's when I was doing the preliminary looking and sorta got shifted that direction. They're about $20 grand for a 2000-2001. There's a big difference when you have to finance those two because the monthly payments would just suck on the Eclipse, not to mention it's a convertible so insurance would be sky-high for a 21 year old. I hate being so conservitive, but I've seen other people my age with sweet rides...how do they do it? My parents couldn't even afford to carry my ass through a car payment like that. >>

Oh heaven forbid! How about while in college you drive a POS? I drive a car worth 1/20 of my yearly income. I have a bunch of extra cash and still drive a POS. Most people in college driving new cars should not be; either they are barely making payments or getting themselves into debt before even proving they can get a job.

 

[StageLeft]

<< it doesn't matter if your house is worth $3M, people who see you driving around will think you're a loser, as they can't see your house. That's why a lot of people rather have a huge debt but a cool car than to have a functional but boring car and live debt-free. Try picking up chicks in a rusty, old, crappy car, and then try to do it while driving a brand new Ferrari. Note how much more succesful you will be in the second situation, as you will seem a lot richer with a Ferrari, eventhough you'd be paying for it the rest of your live.
>>

Sad. Nobody is saying live in a 3m house driving a 10 year old civic. If it's really so important what a COMPLETE STRANGER thinks of you by your car so be it - live in a shack and drive a cadillac; somebody close to me lives in a run down junk heap and drives a pretty new cadillac. Pathetic. What do they go home to? A 19" TV with nasty manky furniture and eating KD. I, on the other hand, drive around my old sentra (which works) and come back to a nice home theater with toys that I can play with. Maybe the average stranger would think this other person is better off than me but beyond the 30 min a day we're driving around in our cars I get to enjoy what I want instead of trying to impress other people. Now even if you like to have a nice car (who doesn't?) wasting 20% of your income to stay in it is ludicrous and tscenter's original post hit the nail square on its head.

 

[Hammer]

There's an old saying: Buy what you can afford.

Makes sense, don't it?

 

[phatcow]

many many of us is doing it 100 percent outselves.

 

[b0mbrman]

<< cars, just like hookers, cost too much money >>


With cars, just like hookers, you get what you pay for...plenty of people can afford a $6,000 Daewoo but not too many people choose to get them...just as not too many people choose the homeless, VD-ridden transvestite with one leg even though at $10, she's a total bargain

 

[desy]

TCcenters story has merit, but many are right you don't have to live like a pauper today to live like a king later
If you ever read "The Wealthy Barber" a good plan right off the start is save 10% if you have a pension plan,
15% if you don't and 25% if you are self employed of after tax income. The sooner the better. .
From there you can relax and make whatever lifestyle choices you want after that big house, little house
old car , new car don't worry about it as long as you take care of your long term finances first .
With cars though they are a depreciating commodity while a house usually appreciates or holds its own.
But with a house the money is locked in and you can't touch it till you sell.

 

[TAsunder]

<<

<< I don't know where you all live but I can't get a decent house where I live for the same mortgage rate as a $30,000 car's monthly payments. And If I were to buy a house and move in 2 years, I'd probably lose about a whole car's worth of money in the process.
>>

Whoa! - Where do you live that houses depreciate 30K in two years?
I want to make sure not to buy a house there! >>



I said a whole car, not a whole $30,000 car. If you buy a house and then sell it two year's later, most likely you will lose money. The amount of money you save in tax relief is probably going to be less than the closing costs and miscelanneous costs of selling the house.

 

[Spamela]

<< I'm definitely in the market for a new car. My bucket-o-bolts is a 94 Mitsubishi Galant with 166,000 miles on it. I wouldn't even consider replacing it, but the suspension squeeks, my engine doesn't accelerate correctly, and I sometimes hear a "pop" from my right rod arm when I turn. I'm ready to trade it in..... I did some searching and to replace my car with a 2000 or 2001 Galant, it will cost $12-14 grand. I'm a college student and can afford that. However, I was sort of looking at the Eclipse Spyder's when I was doing the preliminary looking and sorta got shifted that direction. They're about $20 grand for a 2000-2001. There's a big difference when you have to finance those two because the monthly payments would just suck on the Eclipse, not to mention it's a convertible so insurance would be sky-high for a 21 year old. I hate being so conservitive, but I've seen other people my age with sweet rides...how do they do it? My parents couldn't even afford to carry my ass through a car payment like that. >>



get a reliable used car & save a ton of $ - the consumer reports car issue will be out real soon now.

how do they do it? any bracero can make payments.

 

[TAsunder]

<< Sad. Nobody is saying live in a 3m house driving a 10 year old civic. If it's really so important what a COMPLETE STRANGER thinks of you by your car so be it - live in a shack and drive a cadillac; somebody close to me lives in a run down junk heap and drives a pretty new cadillac. Pathetic. What do they go home to? A 19" TV with nasty manky furniture and eating KD. I, on the other hand, drive around my old sentra (which works) and come back to a nice home theater with toys that I can play with. Maybe the average stranger would think this other person is better off than me but beyond the 30 min a day we're driving around in our cars I get to enjoy what I want instead of trying to impress other people. Now even if you like to have a nice car (who doesn't?) wasting 20% of your income to stay in it is ludicrous and tscenter's original post hit the nail square on its head. >>



I have a relatively nice car, and I don't care what other people think or try to impress them. Believe it or not, there is actually a significant difference in the quality of a nissan sentra compared to, say, a bmw 325 (no, I don't own that - couldn't quite afford it). Some people like driving cars, they get enjoyment out of them. Obviously you are not such a person (though it is interesting that you then choose to measure one's worth based on the size of their TV). Furthermore, some people drive their cars a lot more than 30 minutes a day. And of course lastly, a lot of people don't give a rat's ass about television or home theaters. I am not such a person (I have a decent tv and home theater), but it's interesting that you judge your neighbor because of this - as if home theaters are great investments either. I imagine, based on your posts, that he probably is better off than you, because he probably enjoys himself a lot more.

 

[Parrotheader]

<< Six month's salary??? I don't know a SINGLE person that has that much in easily accessible cash-like accounts. In fact, I think that is the stupidest idea I've ever heard of. You could be earning 7-10% (or more) in the long run if you invested in mutual funds. Instead, you're only making 2% in your cash account. >>

Nobody said you had to keep the money in a traditional bank savings or checking accounts where the rates are abysmal. You can use CDs or money market accounts which earn higher interest rates and are still very accessible. I personally have most of our cash savings in a credit union savings account where the interest rate is currently earning a little under 5% and at one point was earning a little over 6%. That's not huge of course, but when you have 5 figures in there even 5% is a nice little interest number in an account that could be fairly liquid if need be. I think the six month's savings/emergency fund is a great idea for a lot of the reasons listed above. Plus, if you're not using that as retirement money and don't really care as much about the growth you can use the annual interest (once you get up to a sizable amount of course) to pay for things like a vacation. We just did that to help pay for our upcoming cruise and trip to Orlando.

 

[tcsenter]

<< There are two sides to it. While your father may be laughing now, he's laughing at the end of a 60-year run. While he was being conservative and sacrificing all those years, you uncle was enjoying himself in the true prime of his life. There's alot to be said for conservation, but extreme frugality at the expense of enjoyment in hopes for something down the road isn't necessarily the answer. Suppose, god forbid, your father had passed away at 55. When would the enjoyment have started - never! >>

They are four years apart in age yet they only have a seven month difference in seniority. My father could have easily retired at 55, but he wanted to stick it out another 5 years because of some calculated decision WRT an increase in monthly social security and pension credits.

So, while my parents have been enjoying their retirement, traveling, doing whatever they want to do for the last 7 years, guess who has been stuck working in a hot factory nine hours a day, five days a week, and will continue to be for three more years? He would have to work another 10 years and save 60% of it before he could retire with my parent's net worth.

Because my father was frugal and more responsible doesn't mean he didn't enjoy himself or have any fun. It's a youthful misconception that one must be an impulsive fool in order to have any fun, a myth that disappears from the common understanding of an aging population.

Nobody EVER says "Boy, now that I'm 65, I sure wish I would have saved less money, partied more, and blew more of my money on frivolous things." All we're really talking about here is spending well within one's limits vs. spending all of one's income. If you're going to blow your money on something, blow it on things which at least hold their inflation adjusted value or appreciate in value vs. things that are virtually worthless in several years.

 

[yakko]

<< How do people afford cars these days? >>

A lot of people actually can't but they have credit and bankruptcy is not that big of a deal anymore unfortunately. The ones that can do it by having a job that pays enough.