Financial Responsibility 101: How much is too much for a car payment?

[In Extremis]

I personally hate car payments of any kind. I would much rather drive a lesser vehicle and own it outright. But it's your money and you seem to have everything in order, I agree life is short.. So maybe you should go for it. It kind of seems like you want everyone to steer you in the direction of an upgrade.

[Eau Rouge]

Everyone's situation is different, but there's some good advice in this thread. Potential lenders have their own idea of what a sensible decision, but ultimately some will learn the hard way in spite of all of the goodwill and advice given. GL.

Originally Posted by k-lo

4 letters.... YOLO

Originally Posted by Kong Sheng Han

Those four letters bother the shit out of me.

Originally Posted by BigTasty

Sometimes I wonder why more people don't give equal thought to another acronym -- WAABAD -- as it could be beneficial. Time is needed to address the We Are All Born A Dumbass condition peculiar to all of us as newborns.

[s4play]

I swear this thread is on every forum, you should go read the GTR one as well...haha

Seems like everyone likes to get forum advice, why not just make your own decision instead of asking a bunch of strangers!

[pinipig523]

Originally Posted by s4play

I swear this thread is on every forum, you should go read the GTR one as well...haha

Seems like everyone likes to get forum advice, why not just make your own decision instead of asking a bunch of strangers!

I think people just like to get opinions from others on similar financial footing.

[s4play]

Originally Posted by pinipig523

I think people just like to get opinions from others on similar financial footing.

I totally get that but the problem is besides our love for the BMW M3, my guess is everyone here is not on the same financial level. It's actually furthest from the truth as many on here would never get along in real life. Behind a computer online it's easy to talk because it's virtual.

Anyways for the OP, if you have time go read this thread: (19 pages of why someone can or cannot afford a GTR)

http://www.gtrlife.com/forums/topic/...s-afford-gtrs/

[davesaddiction]

Originally Posted by pinipig523

I think people just like to get opinions from others on similar financial footing.

I got some heat from a few people for this thread, but the poll did capture some good info on what members here spent on their car relative to their house.

http://www.m3post.com/forums/showthread.php?t=729263

[Endless619]

Originally Posted by Kung Fu English

How are you gonna get a 300k car for 1100 a month? Put 220k down? Or finance over 200 months? 300k for 72 months is 4300/month.

Your post actually doesn't make sense.

I'd imagine those in position to pay 1100/mo on a car are also already paying a mortgage or whatever they need to live on. You are combining the two for some reason but they are mutually exclusive.

Why wouldn't you pay 1200/mo for an M3? Financing at 3%, that down payment can probably make more being invested. And 3% is probably lower than any of the other debts people have, hell even undergrad stafford loans are 3.4%.

Saving up for a down payment means you can't invest the money when you earn it nor when you spend it. It's actually kind of a waste.

Negative, new guy on the forum. We are getting a lot of you kids these days. lol

I have owned 10+ cars since 1990 and can tell you from 23 years of experience that buying a car thats $1200 a month is plain stupid. Sorry its true. I don't care what percent you have, it is just not a smart move for everyone. I can go on all day long.

Some folks on here make $2500-$3000 a month take home and are leasing an M3 at $800-$1200 a month. Is that smart to you? Where is his room for living expenses, rent, mortgage, savings, gas, food etc.? He has none = not a smart move. Look I am going by what I have read on what some folks make on here. It all depends on what you make, period. Saving doesn't take decades either there buddy. Again back to what you make.

Living in the Bay Area I paid $2500 a month for rent while I was temporarily there. If I am taking home $3000 a month where can I afford the $1200 a month payment? Does that make any sense?

BTW I put down over half or 75% when I buy a car, sometimes I pay cash. So for me and my situation if I am paying $1200 a month on a car it better be a damn 458 Italia not some 3 series BMW.

I paid $50k cash 2 years ago for my X5. Done. I put down half on my M3. Done. No $1***.** car payment.

[gatorfast]

Ahh another thread where everyone can state how rich they are.

[Kung Fu English]

Originally Posted by Endless619

Negative, new guy on the forum. We are getting a lot of you kids these days. lol

I have owned 10+ cars since 1990 and can tell you from 23 years of experience that buying a car thats $1200 a month is plain stupid. Sorry its true. I don't care what percent you have, it is just not a smart move for everyone. I can go on all day long.

Some folks on here make $2500-$3000 a month take home and are leasing an M3 at $800-$1200 a month. Is that smart to you? Where is his room for living expenses, rent, mortgage, savings, gas, food etc.? He has none = not a smart move. Look I am going by what I have read on what some folks make on here. It all depends on what you make, period. Saving doesn't take decades either there buddy. Again back to what you make.

Living in the Bay Area I paid $2500 a month for rent while I was temporarily there. If I am taking home $3000 a month where can I afford the $1200 a month payment? Does that make any sense?

BTW I put down over half or 75% when I buy a car, sometimes I pay cash. So for me and my situation if I am paying $1200 a month on a car it better be a damn 458 Italia not some 3 series BMW.

I paid $50k cash 2 years ago for my X5. Done. I put down half on my M3. Done. No $1***.** car payment.

Missing the point.

And implying it's wrong because I'm new to the forums is definition of ad hom but w/e.

I was replying to the post by saying what he said made no sense. To spend 1200 on a car means you probably aren't taking home 3k/mo. But the post I quoted made no mention of monthly take home. Only that in a vacuum no matter the income 1200/mo is stupid. My point is that premise of putting 75% down is not just to be taken as the smart move just because you'll save 6k in finance charges. It's all about opportunity cost.

How is a 3% or less loan bad? Ever? Mortgages are 4 or more. Student loans are now 6.8 for undergrad, they were 3.4 before. If you invest you should be able to get 6 on a conservative basis. Why then is it smart to save 70k and dump it in a car instead of investing it month by month and just paying monthly? You lose 3% apr but you gain 6%.

I never said spending 75% of your monthly income on a car is smart. But you are acting like that's all I said in my entire post. I said that spending 1200/mo on a car should imply the person has everything else taken care of. I guess I should have been explicit and said not only mortgage, but other loans and retirement as well. That's probably someone making around 10k per month take home (before taxes).

Congrats on not having a car payment. But you could have made more investing it and paying monthly I'd wager. 6k finance charges over 6 years on a 70k payment is nothing.

[pukicabuki]

Originally Posted by gatorfast

Ahh another thread where everyone can state how rich they are.

+1

The way some of you talk the average person can't afford a bus pass.

[Darth One]

BMW had 1.9% interest for a good portion of the life of the M3. if you finance $60k for 5 years at that rate, that's a little less than $3k in finance charges over the term over the loan.

so let's say you had $60k in cash in 2009 and you decided to buy the car outright. good for you. but if you just financed the car and threw your $60k into an S&P index fund, you would be sitting on $120k right now.

saying financing is always stupid is, well....stupid. YMM always V

[nujabes24]

Originally Posted by Dashman

That would be the "Who Bought Their Car, Free & Clear" thread. I'm subscribed.

+1 lmao

[pinipig523]

Originally Posted by Darth One

BMW had 1.9% interest for a good portion of the life of the M3. if you finance $60k for 5 years at that rate, that's a little less than $3k in finance charges over the term over the loan.

so let's say you had $60k in cash in 2009 and you decided to buy the car outright. good for you. but if you just financed the car and threw your $60k into an S&P index fund, you would be sitting on $120k right now.

saying financing is always stupid is, well....stupid. YMM always V

Yes, blanket statements like financing is stupid IS stupid.

I'd rather keep cash on hand/liquid rather than put it in a car if they're loaning me what is essentially "free" money. 1.9% is where it's at.

Now it the rates were 5-6%, then no way.

[Transfer]

Originally Posted by pukicabuki

+1

The way some of you talk the average person can't afford a bus pass.

Yup

[k-lo]

Originally Posted by Endless619

Negative, new guy on the forum. We are getting a lot of you kids these days. lol

I have owned 10+ cars since 1990 and can tell you from 23 years of experience that buying a car thats $1200 a month is plain stupid. Sorry its true. I don't care what percent you have, it is just not a smart move for everyone. I can go on all day long.

Some folks on here make $2500-$3000 a month take home and are leasing an M3 at $800-$1200 a month. Is that smart to you? Where is his room for living expenses, rent, mortgage, savings, gas, food etc.? He has none = not a smart move. Look I am going by what I have read on what some folks make on here. It all depends on what you make, period. Saving doesn't take decades either there buddy. Again back to what you make.

Living in the Bay Area I paid $2500 a month for rent while I was temporarily there. If I am taking home $3000 a month where can I afford the $1200 a month payment? Does that make any sense?

BTW I put down over half or 75% when I buy a car, sometimes I pay cash. So for me and my situation if I am paying $1200 a month on a car it better be a damn 458 Italia not some 3 series BMW.

I paid $50k cash 2 years ago for my X5. Done. I put down half on my M3. Done. No $1***.** car payment.

oh man, now I feel that I should say something, without divulging how much I really make, I pay $1300 a month on my M3, and no I didn't bite the bullet on financing charges my rate is really great, I only put $5k down because I opted to use my liquid funds to invest in other things instead of tying it up on the car. My total financing cost is around $5k. I'm certain I'd make more out of the free funds I have in 4 years than putting it towards the car and save me $2-3K in interest payments. I think if what your doing works for you then great more power to you. BTW if you think you can get in the seat of a 458 for $1200/mo then you don't know the certain demographics and psyche of people buying those cars. If that was the case, the down payment would have been close to $180-$200K, at that point the new 458 owner should have just wired the full amount which knowing these types of people they can and will.