Originally Posted by davesaddiction
Sorry for your loss, first of all.
Life is meant to be lived, but some decisions you make now can really screw things up for you down the line.
Cars are depreciating assets, and you need to consider the lost opportunity cost of not investing the money you'd spend on the car.
Before I bought my M3 (used), I had a nice house, a big chunk built up for retirement + 20% of salary going there, life insurance & 529s set up for our kids, and my wife already in a nice mom-mobile (the family stuff doesn't apply to you yet, obviously).
Getting an '08 with a good insurance option from USAA sounds like something you could manage pretty easily, just make sure you're also set up well for the future.
Here's some advice on this I saw recently:
- Put down at least 20%
- Finance the vehicle for no more than four years
- Keep total monthly vehicle expense - including principal, interest, and insurance - under 10% of gross income
Cars like these are meant to be enjoyed; make sure there's no way you'll end up regretting the purchase.
Best of luck on your decision.
Good advice! He should include maybe the gas money and maintenance costs in that 'total expenses' category?
OP, sounds like you are a wise young man. Key rule of thumb for me is how comfortable you feel with the payment as a percentage of your discretionary income. And how stable your job is, or how easily you can find another one with the same income should you lose this one.
My personal opinion is.... if a difference of a few hundred / month means you are approaching your limit of 'comfortable', don't go there. Don't go anywhere near your limit, stay well below it.
There will always be special cars out there to own. The hard part is waiting. But it'd be a *choice* you'd be making. One that allows you to have much more choice later on...