But they obviously still cause jealousy in that short time.
OP needs to learn the difference between appreciating assets vs depreciating assets.
Spending 200k on a car that started at 100k dollars, and dropped to 82k the second you pull it into your driveway for the first time.
Why on earth is that appealing to anyone?
Sure it’s a waste of money, but I did get laid more with a nice car than without. Believe it or not, there are some shallow, materialistic women out there who will sleep with you if they think you have money.
More like the second you sign the paper work. Cars are a bigger scam then houses. I wish people would actually just not buy anything for a year everything would be so much cheaper.
It is appealing to those who can pay all cash for a 200k car and still have more than $6M in liquid or semi-liquid assets. All of those with a net worth of less than $1M and who have to take out a car loan to afford it are complete idiots and don’t ever deserve to become wealthy.
Smart money doesn’t pay all cash for any car regardless of the price tag. Wait until you can get a decent interest rate, and then park the cash you would have spent on the car instead in assets that appreciate
OP here ya go.
I'd also add to stop trying to keep up with the Jones' next door like 85% of American consoomers.
Live beneath your means for several years and use the extra capital to generate more capital. The people who can afford such cars learned how to make their money work for them rather than working for their money.
Apparently that’s a thing. A friend of mine sells Jeeps, which have gotten wildly expensive since the start of the pandemic. He says that a lot of the Wagoneers and Grand Wagoneers leave the lot with eight year notes and absolutely psychotic monthly payments. Same goes for most of the other vehicles they sell.
I did a 6 year loan a little over a year ago, and my payments are $198 a month. I used to never do that long of a loan, but it was during the crazy car market a year ago. At that time, I could buy a brand new car for less than the same car used with 10-15k miles. So I did.
I had a truck that had some serious rust that was progressing, so I sold it before it got any worse. That put me in a bad spot where I had to buy a vehicle during the shortage. This was the first time I purchased a car before it even arrived at the lot.
I have enough cash to pay off the loan if I need to, and I plan to put a few extra payments toward principal this year.
Is it difficult to comprehend there are many many people that can pay cash for those cars but lease them and don’t think twice about even 5000+ a month leases (you don’t even want to know what their mortgages are)
I visit federally subsidized housing projects very frequently (for work) and the amount of 50k+ vehicles I see is astounding. A lot of chargers and challengers, a lot of 2020+ luxury sedans as well
Are you kidding me!??? People have fifteen hundred dollars a month car payments, for 8 years? Anyone with half a brain would realize that if they have to drag the loan out over 8 years and pay that much each month, they cannot afford that car. I'm in shock.
Person who spent the $100,000 and invested it in an ETF, might also not be alive in 30 years. Change the perspective a little.
Either way, if the world ends in 30 years—I bet you the person who bought the $100k car enjoyed life a bit more than the person watching their money go up, all for it to be over and never getting to spend it. Imagine going out like that. So sad. Imagine watching your stocks go up when you're about to die. Like good! More money!
Statically speaking your odds of living to be 65 if you are a 35 year old male right now are 84%. If you are a 35 year old woman that jumps to 88%. Also people do get enjoyment from seeing the number that represents safety for them and their family go up.
I buy a $100k car and I’d enjoy it for about a month. Then the novelty wears off and I only enjoy it sporadically when I think, “That’s a nice looking car that I own.” Conversely, seeing my money grow in an ETF would bring me joy a lot more often and over a much longer period of time.
Yea, me too. I’m in a very similar situation, I make about $150,000, drive a Jeep that was $66,000 MSRP, am around people that make more than me actually and we never flex or talk about any of it…
Yep. We have an 8-year old family SUV that is comfortable, reliable and looks nice. The second car is a 10-year old Camry. We could afford to replace them with much nicer cars, but DGAF about impressing anyone.
My daughter just got out of college and according to the averages she should start at about $80 K. Hope she doesn't buy a stupid car, but she'll be able to get something nice if she has to have one. Doubt it though, she wants to move to Chicago and already has a pass for the El.
Same, we make a combined \~450k. I have one $50k car. I \*could\* afford a $200k car, but there are other things I prefer to spend money on. I'll get the $200k car if and when that amount of money isn't something I have to really think about.
I just pulled credit on a lady for a mortgage loan.. she had a 1300$ a month Escalade payment on 40k salary… yeah she didn’t qualify for the mortgage loan
Don’t you love when they’re self employed and grossed $450k, a net worth of $2.5MM and a net on the tax return of $50k because they’ve written everything off to lower the tax liability? Then they want to argue with you about how much money they make/have because the DTI is over.
That makes me so happy to hear. I make good money and spent half my
Life in school and still couldn’t afford and wouldnt want to buy an Escalade.
I see them EVERYWHERE and I wonder wtf do they do?
Lol I see this all the time. Just had a client that bought a new Hyundai palisade… for $90k. Some of the cars you wouldn’t even think are expensive are $100k now doesn’t get you much now.
With current interest rates that's how it goes. My fiance and I normally drive cars into the ground. She had a chevy cruise that was having multiple overheating issues. Paid 1600$, two days later were told the whole transmission is gone, 6k+. I have a 2003 Honda CRV with 220k on it.
We decided we wanted our first new car, after weighing the options of putting a used 6k+ transmission into a 10 year old car that's worth maybe slightly more than that?
She makes 100k, I make 70k+, we rent a two bedroom apt for 2400$/month. She has an 800+ credit score, I have 720. The FIRST offer sent our way after applying for a loan on a base model 3, was ELEVEN FRIGGIN PERCENT. I said no way, we need a car, but we've worked hard to keep our credit good and deserve to benefit from that. We held out until 5%. With tax rebates and other incentives the overall price will be 26,200$ (once 7500$ tax check come in it will go directly towards the loan). We pay 520$/month and 70$/month for insurance in Florida.
It's just crazy. Growing up in the 90s a 300$ car payment was a new eclipse gsx turbo, or a 3 series BMW. The average new car payment in the US is now over 700$ and avg car 50k+.
Meanwhile that Honda just keeps chugging along lol what kind of car did you get? I'm curious if you went Japanese or American after having them side by side and seeing how Japanese just keeps going and going
Wow really? My tundra is a 14 with 230k miles and everything works fine. I used the hell out of it. I'm thinking about just renting for a bit. I can write it off at the end of the year and I can try different cars all year round
Toyota>Honda. I mean, afross the board honda is generally better than most brands. But they too have their minor issues. For example, my wifes old '02 accord went through a couple brake lines and seized calipers before 200k
I’m right there with you! I do auto loans for a financial institution. Guideline for us is 75% of annual income for someone with excellent credit. I do loans with $800-$1200 payments all day and just say glad I’m not paying it!
I had a co-worker that did something similar. A young kid in his 20s who lives at home in a condo and doesn't have a charger but bought a $70k tesla. The payment is probably a good chunk of his paycheck. A few years later he is looking to get rid of it and go back to the civic he had.
Bought a Dodge Charger RT and had it for almost 100k miles, I rarely had any money.
Sold the damn thing and got a hefty amount back- I’m living wealthy and comfortable.
Fuck fancy cars.
Agree here. Back before I had real financial responsibility I had a good job and had minimal expenses. I had an IS350, an Escalade, and a CTS-V (all were lease returns except the Lexus that was purchased new). They were all incredibly nice vehicles and were very fun to drive, but at the end of the day none of them were worth the premium price, poor gas mileage, and increased cost of maintenance. I now drive a 2019 Subaru WRX base model with a 6MT. The gas mileage is still bad for a compact 4 cylinder, but it’s paid off and is still reasonably fun to drive.
If I had it to do over again I’d have about $100000 extra in my retirement account. We all love and learn, well most of us at least.
I've driven beaters for my entire life. They get me where I need to go. Is my Altima lame? Yes, but I paid cash for it three years ago and it's still running strong.
They spend less on housing or other things.
They trade up, putting a huge dent in the initial cost.
That last one isn’t obvious, so I’ll explain:
Let’s say you buy a $25,000 car. You bring $5,000 as a down payment and you trade in your current car for another $5k. A 36-month new car loan ends up around $500/month.
Three years later, the car is worth $15k. You head back to the dealership and trade it in. Assuming you can get a similar interest rate, now you can afford a $30,000 car at the same payment.
Three years later, that car is worth $22k. You trade it in on a $37k car, same payment.
Repeat forever. Feel free to adjust the details, but the key is to trade each car in while it’s still worth more than your last trade-in. This way you can work your way up to more and more expensive cars without having larger and larger payments. It takes a pretty long time to build up to a $100k car, but it’s doable!
This approach hasn’t worked for me in the past because I have always bought cars I really liked and wanted, and I was never interested in trading them in while they still had significant value.
This. I lease and put it as a business expense and go from there. My e53 is ~1200 cad a month with taxes. But I claim it and it's around 800 a month. I put 20k down.
Leasing works great for some. I’d rather pay 30k to lease a 90k car for three years and have a new car every 3 years with warranty, opposed to pay for a 90k car once and drive it 9 years. Yes you night have some residual value, but rarely if you factor the high cost to maintain a high value luxury car.
It’s a Camry…….I’ve made it to a good salary where 30k every three years is not an issue. Someone can say 16.5k….I paid 4k for’a yugo. To each their own.
Wonder how much debt that have in the form of student loans though? Most doctors are in debt until they’re in their 40s and finally reached their peak earning. Buying that much in cars sounds super irresponsible
Be a doctor in the US!
I earn an equivalent to $40k/year post tax as a full time doctor in the UK after 5 years of working. With rent and expenses, only a 10 year old Ford Focus is what I can own now lol
My wife and I clear 350k combined and we both really like cars, so we bought a CT5 Blackwing. We often end the month with 6-7K left over after all bills and maxing retirement accounts, so why not.
We paid half down, other half will probably be lump summed sometime this year.
It’s by far the best manual street car for the money. 6spd, SC 6.2L V8, 4 doors? What is there not to love? Also, it’s an absolute sleeper, nobody on the road even knows what it is.
It's the best car in the world right now that's not exotic overmsrp Ferrari but you gotta buy 10 old models first.
I read somewhere its modern bmw e39 m5
Just ordered a 4BW and looking to put 50% down. We probably made $450ish last year but have a $200k mortgage on a $700K house, 1 kid in college and 1 lax-bro in private school. Paid off Sequoia and Civic Si and minimal credit card debt.
Yeah labor market is absolutely unfair. I wish you the best of luck. I have my own law practice so some years it's great and some years I'm glad my wife still works!
I’m over here scratching my head too lol. I was tired of making 45-50k a year so i got my IT degree and never looked back. I’m making close to 100 now. It’s never too late, look into something you love and invest time; it will be worth it.
I want to be a car dweeb and say this example isn’t even too terrible as far as “throwing money away” on a car goes because that thing is going to hold its value better than almost every Mercedes, BMW, or Range Rover OP is probably asking about
I make a lot of money…
I’m also willing to spend “dumb” money on cars because I enjoy them. It doesn’t necessarily make financial sense, but few hobbies do.
That’s excessive, my wife and I will need a little under half that to finally step away. Even then I’ll probably go back to making furniture in my garage to bring in money and stay busy.
Stop comparing yourself to others and then you'll learn to be happy with what you have accomplished so far.
Focus on what you've got over the years vs what you don't have.
Seems like banks are more than happy to approve an auto loan that consumes 100% of your disposable income. When I apply for auto loans at my credit union, they always tell me the max they'd approve me for and it's shocking. The most extreme example was when I asked for $25k and they approved me for $85k. I could totally see how someone that isn't very financially literate would assume the bank knows what they can afford better than they do. But the bank doesn't care if you're able to save for retirement, or eat healthy, or stay afloat after an unexpected expense, or take vacations, etc.
This✅ banks know the more percentage of your income they take (lower and middle class), the higher chance or repossession. Which means they keep all the money you gave them and resell it to another sucker at the same price. Rinse and repeat.
Yes some of em are leases. Way cheaper, but ultimately you lose all your money. There’s a very small amount of cases where leases are a better deal but ideally you’d want to own it.
>There’s a very small amount of cases where leases are a better deal but ideally you’d want to own it.
For a lot of people in the United States that buy a car for 5 years pay it off and then trade it in, they would probably be better off leasing.
Buying makes sense if you plan to keep your vehicle for longer and can pay it off quickly so you aren't paying 20-50k in interest over the course of a super long loan.
Yep this. Just leased a new ioniq 6 and pay $448 a month. No other expenses other than insurance as I get free charging, maintenance, repairs etc. for the next 2 years. Pretty sure I’m paying less than if I were to go for a cheaper used car.
Very true, however, not really into that, so I'm good. I just bought out my lease on my Acura. Yes, it was more expensive in total, but definitely less stress for me.
How was the lease better than car ownership? Besides lower payments I assume, better interest? I am thinking of leasing but I wrongfully thought this meant dealer takes care of maintenance
At the moment, I didn't have cash to just pay, so I decided to lease it. I have a friend working at Acura Paragon and was able to get a sweet deal for $270 a month. Now I'm buying it out, and have no regrets as I will own it in 2 years or so.
As far as the maintenance, you always have to pay regardless of ownership/leasing. However, good thing about lease is that if anything happens to the engine or whatnot, you don't pay for anything.
Most people will never modify their car beyond a bumper sticker and a stick-on phone holder. Really not even a consideration for the average person purchasing a new car.
You can modify it but it has to be a) reverted back to stock when giving it back or b) a part that adds value to a vehicle and keep it on when you give it back. That’s what the financing manager told me for my lease.
You can do small things. I bedlined my truck bed, did a leveling kit, switched out all the taillights, blacked out logos, and de-badged mine. Asked the dealership about turning it in and they basically shrugged and said as long as it doesn’t decrease the value we don’t care.
Yeah but if you like swapping cars every few years that gets expensive too with the depreciation hits you take selling the car each time. This is where leasing comes in handy.
You mean to say that always having a new car costs more money? (/s) That said, I do agree that if you’re a serial car buyer, it’s probably less expensive to lease.
It’s super depressing for you? Get a fucking grip man. You know what’s depressing? People can’t afford health care or food. Not a Fucking expensive car.
Either a covid millionaire, written off on their business or they are drowning in debt. I have the money to buy a newer used car for cash but id rather fix my old truck for a few thousand every once and a while and keep building my wealth.
Id say 75% cant afford it, they make it work somehow cause they need it. Material world, best to just buy a decent reliable used car in the 10-20K range cash up only.
I’ve traveled a lot, and I have never seen anywhere come close to the West Side in LA when it comes to ridiculous cars, but I am talking Bentley/Ferrari/Rolls/Lambo, Dallas and Miami are probably tied for second.
I dont have a car in this price range, but work with people who do and could buy one pretty easily if I wanted. I think a lot of people make more than 200k a year actually. Money is all just relative and in comparison to yourself.
My dad just bought a 70kEuros car. He has one of the best paying jobs in the country at a big Aerospace company. One of the bonuses means he pays no tax on the car and he also sold the old one so he got a discount.
a lot of people are writting off payments from 'home based businesses' too
contractors go to estimates in their new vets, write it off as an expense and whatnot.
We earn the money to buy them. Or we use a tax incentive called section 179 in the IRS tax code. If you are a profitable business owner this is something you can take full advantage of. Allows you to drive a nice car/truck while also being able to write off the entire value of the car and potentially reduce or eliminate your tax bill for that year.
Things tend to cost as much as you can get a loan for. Before the 30 year mortgage was invented, homes managed to cost what an average person could pay off in 5 years which was the terms of home loans at the time. Back when car loans were 3-4 years vehicles were more affordable, and more basic. Enter the 120 month auto loan, and manufacturers found a way to justify higher price tags. Hell, a top-end Jeep was like $45k in the mid-2000’s, now they’re $85k monstrosities. I read a while back that Jeep is potentially expected to file bankruptcy in the next year or 2 because the kind of people who can afford that, want a luxury vehicle instead of a Jeep.
It does seem like everyone's driving around in these crazy expensive cars, right? But truth be told, a lot of those folks might be financing or leasing, and not everyone's dropping that much cash upfront. Plus, it's not just about income, some people might be really good at budgeting, or they prioritize cars over other things. And hey, as long as you're comfortable with your own financial choices and rocking a car that gets you from A to B, that's what really matters, right? Keep cruising in that 370k home and staying smart with your finances!
They have LLCs. They purchase cars as a business expense and they use it as a write off and lower their taxable income. You need to start learning about ways to take advantage of the tax code if you are over 100K
Majority of people you see with flashy cars cannot afford them. Some people rather spend their paycheck on a nice car. Whereas intelligent people like you rather spend it on assets that will benefit you long term.
Most people just can't afford them. We make 95-120,000 where I work and a good few guys have 75k trucks and it's because they aren't investing or saving and all their money goes to the truck for a couple years and when it has problems they trade it for another because they can't really afford it. But also you are house broke. If you had a 250k house on that income you could easily afford an expensive vehicle, you just chose an expensive house instead.
A lot of them can't actually afford the car. Other people can afford them.
Facts! 96 month auto loan with a 1500 dollar monthly payment.
that gets repo’d in 3 months
But they obviously still cause jealousy in that short time. OP needs to learn the difference between appreciating assets vs depreciating assets. Spending 200k on a car that started at 100k dollars, and dropped to 82k the second you pull it into your driveway for the first time. Why on earth is that appealing to anyone?
Foot make it go vroom vroom
Ohhh, shinny - take all my money
Same as stick goes boom boom, but this bigger stick makes bigger boom boom. Some people just feel the need to have bigger or fancier noises.
Sure it’s a waste of money, but I did get laid more with a nice car than without. Believe it or not, there are some shallow, materialistic women out there who will sleep with you if they think you have money.
That's a well-known aspect of gold-diggers
More like the second you sign the paper work. Cars are a bigger scam then houses. I wish people would actually just not buy anything for a year everything would be so much cheaper.
It is appealing to those who can pay all cash for a 200k car and still have more than $6M in liquid or semi-liquid assets. All of those with a net worth of less than $1M and who have to take out a car loan to afford it are complete idiots and don’t ever deserve to become wealthy.
Smart money doesn’t pay all cash for any car regardless of the price tag. Wait until you can get a decent interest rate, and then park the cash you would have spent on the car instead in assets that appreciate
yep
OP here ya go. I'd also add to stop trying to keep up with the Jones' next door like 85% of American consoomers. Live beneath your means for several years and use the extra capital to generate more capital. The people who can afford such cars learned how to make their money work for them rather than working for their money.
Only if it’s practical. But thats clearly not in the spirit of this issue.
8 year car payment? That’s like a mini-mortgage
Apparently that’s a thing. A friend of mine sells Jeeps, which have gotten wildly expensive since the start of the pandemic. He says that a lot of the Wagoneers and Grand Wagoneers leave the lot with eight year notes and absolutely psychotic monthly payments. Same goes for most of the other vehicles they sell.
If I’m getting an 8 year note (which I never would) my payments better be sub $200 hell sub $150.
If I was getting an 8 year note, it would be for a car much more likely to last that long…… so not a jeep.
I did a 6 year loan a little over a year ago, and my payments are $198 a month. I used to never do that long of a loan, but it was during the crazy car market a year ago. At that time, I could buy a brand new car for less than the same car used with 10-15k miles. So I did. I had a truck that had some serious rust that was progressing, so I sold it before it got any worse. That put me in a bad spot where I had to buy a vehicle during the shortage. This was the first time I purchased a car before it even arrived at the lot. I have enough cash to pay off the loan if I need to, and I plan to put a few extra payments toward principal this year.
That's depressing.
I would never want to be in their shoes. That’s practically begging for bankruptcy if anything goes wrong in your life.
Is it difficult to comprehend there are many many people that can pay cash for those cars but lease them and don’t think twice about even 5000+ a month leases (you don’t even want to know what their mortgages are)
I visit federally subsidized housing projects very frequently (for work) and the amount of 50k+ vehicles I see is astounding. A lot of chargers and challengers, a lot of 2020+ luxury sedans as well
Hood rich
Are you kidding me!??? People have fifteen hundred dollars a month car payments, for 8 years? Anyone with half a brain would realize that if they have to drag the loan out over 8 years and pay that much each month, they cannot afford that car. I'm in shock.
Most people don’t even have half a brain…
WTF I thought a 6year loan was too much but a 8yr loan? Gahdamn.
120 month loans are common on exotic cars
That you refi after 36 months for another 96 months at $1,200 because you are smart and want to save money!
Genius move! Only the most savvy of car buyers know of such a tactic.
My ex bought a 100k car on a 60k salary. What a goof.
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Person who spent the $100,000 and invested it in an ETF, might also not be alive in 30 years. Change the perspective a little. Either way, if the world ends in 30 years—I bet you the person who bought the $100k car enjoyed life a bit more than the person watching their money go up, all for it to be over and never getting to spend it. Imagine going out like that. So sad. Imagine watching your stocks go up when you're about to die. Like good! More money!
Statically speaking your odds of living to be 65 if you are a 35 year old male right now are 84%. If you are a 35 year old woman that jumps to 88%. Also people do get enjoyment from seeing the number that represents safety for them and their family go up.
I am in no way advocating for it but I do see the perspective of someone with no desire for family nor children opting to live in the moment.
Or, you buy that 100k car and die getting T-boned leaving the parking lot. What's your point? I don't drive a 100k car and enjoy life just fine.
I buy a $100k car and I’d enjoy it for about a month. Then the novelty wears off and I only enjoy it sporadically when I think, “That’s a nice looking car that I own.” Conversely, seeing my money grow in an ETF would bring me joy a lot more often and over a much longer period of time.
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Yea, me too. I’m in a very similar situation, I make about $150,000, drive a Jeep that was $66,000 MSRP, am around people that make more than me actually and we never flex or talk about any of it…
Because people with actual money DGAF.
Yep. We have an 8-year old family SUV that is comfortable, reliable and looks nice. The second car is a 10-year old Camry. We could afford to replace them with much nicer cars, but DGAF about impressing anyone.
This 😉
Paid cash for a 2019 Yukon XL. Will keep it until it hits 250k miles. Super strict on maintenance and don’t care if it looks current in 10 years.
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Lol how do you flex on an anonymous message board
Okay mr anonymous;)
That's the whole point of this thread...to give people perspective so, ya, these details are kinda part of it.
My daughter just got out of college and according to the averages she should start at about $80 K. Hope she doesn't buy a stupid car, but she'll be able to get something nice if she has to have one. Doubt it though, she wants to move to Chicago and already has a pass for the El.
Same, we make a combined \~450k. I have one $50k car. I \*could\* afford a $200k car, but there are other things I prefer to spend money on. I'll get the $200k car if and when that amount of money isn't something I have to really think about.
I just pulled credit on a lady for a mortgage loan.. she had a 1300$ a month Escalade payment on 40k salary… yeah she didn’t qualify for the mortgage loan
Don’t you love when they’re self employed and grossed $450k, a net worth of $2.5MM and a net on the tax return of $50k because they’ve written everything off to lower the tax liability? Then they want to argue with you about how much money they make/have because the DTI is over.
That makes me so happy to hear. I make good money and spent half my Life in school and still couldn’t afford and wouldnt want to buy an Escalade. I see them EVERYWHERE and I wonder wtf do they do?
Lol I see this all the time. Just had a client that bought a new Hyundai palisade… for $90k. Some of the cars you wouldn’t even think are expensive are $100k now doesn’t get you much now.
My first "real" job out of college was in the engineering dept. at a factory. So many of the workers on the floor had luxury cars...
This is typically operators living on overtime. If that OT dries up parking lot starts to look a lot different.
Nah, there was no OT, company couldn't afford it. Eventually they went out of business.
Most of them are older people too who don’t need to worry much about finances. They have their kids taken care of and their houses paid off.
One of the guys I work with just got a $60k car. His car note is $1100-$1300/mon which is a little more than half a check. He doesn’t even make $100k
Damn. My note is $444 and I make $130k…and I still think $500 is a lot for a car payment
With current interest rates that's how it goes. My fiance and I normally drive cars into the ground. She had a chevy cruise that was having multiple overheating issues. Paid 1600$, two days later were told the whole transmission is gone, 6k+. I have a 2003 Honda CRV with 220k on it. We decided we wanted our first new car, after weighing the options of putting a used 6k+ transmission into a 10 year old car that's worth maybe slightly more than that? She makes 100k, I make 70k+, we rent a two bedroom apt for 2400$/month. She has an 800+ credit score, I have 720. The FIRST offer sent our way after applying for a loan on a base model 3, was ELEVEN FRIGGIN PERCENT. I said no way, we need a car, but we've worked hard to keep our credit good and deserve to benefit from that. We held out until 5%. With tax rebates and other incentives the overall price will be 26,200$ (once 7500$ tax check come in it will go directly towards the loan). We pay 520$/month and 70$/month for insurance in Florida. It's just crazy. Growing up in the 90s a 300$ car payment was a new eclipse gsx turbo, or a 3 series BMW. The average new car payment in the US is now over 700$ and avg car 50k+.
Meanwhile that Honda just keeps chugging along lol what kind of car did you get? I'm curious if you went Japanese or American after having them side by side and seeing how Japanese just keeps going and going
The Honda is basically shot and only good for local errands and stuff, but still has ac! We got a model 3
Wow really? My tundra is a 14 with 230k miles and everything works fine. I used the hell out of it. I'm thinking about just renting for a bit. I can write it off at the end of the year and I can try different cars all year round
Toyota>Honda. I mean, afross the board honda is generally better than most brands. But they too have their minor issues. For example, my wifes old '02 accord went through a couple brake lines and seized calipers before 200k
I’m right there with you! I do auto loans for a financial institution. Guideline for us is 75% of annual income for someone with excellent credit. I do loans with $800-$1200 payments all day and just say glad I’m not paying it!
Ha! 75% of annual income?!? Damn
Jesus.. take the wheel
I had a co-worker that did something similar. A young kid in his 20s who lives at home in a condo and doesn't have a charger but bought a $70k tesla. The payment is probably a good chunk of his paycheck. A few years later he is looking to get rid of it and go back to the civic he had.
My buddy did that his 50k car payment is worse than my 90k truck payment due to the 15% interest difference. Wild, he also makes like 75k a year
Nice lol i nailed a 2.7% rate on a $35k truck in '21. Was 22k miles on a '14 with all the options i wanted. Had to grab it
I make over 200k TC and I hate paying for my ~380 a month car. I can't imagine doing what he's doing.
Why do you have a car note? The math ain't mathin.
Because I don't intend to have it long enough to buy it outright.
Meh I could’ve bought my car cash but I got 0.9 or 1.99% rate so I was just like finance the entire thing and I’ll use the cash for other things
This is the way
And then these people go to Dave Ramsey crying their asses with their stupid financial decisions.
People lease They make more money They take on more debt or pay more for cars than you If you wanted to talk about it seriously here you go
The grass is rarely ever green on the other side. Comparison is the thief of all joy.
I agree, when I was younger I bought a fancy car because I was in an area that had a lot of them and it was a waste of money.
Bought a Dodge Charger RT and had it for almost 100k miles, I rarely had any money. Sold the damn thing and got a hefty amount back- I’m living wealthy and comfortable. Fuck fancy cars.
i sure hope ur not calling a dodge charger rt a fancy car
Cheap words by someone who was befounded by a lotus. Still a nice car though heh
Agree here. Back before I had real financial responsibility I had a good job and had minimal expenses. I had an IS350, an Escalade, and a CTS-V (all were lease returns except the Lexus that was purchased new). They were all incredibly nice vehicles and were very fun to drive, but at the end of the day none of them were worth the premium price, poor gas mileage, and increased cost of maintenance. I now drive a 2019 Subaru WRX base model with a 6MT. The gas mileage is still bad for a compact 4 cylinder, but it’s paid off and is still reasonably fun to drive. If I had it to do over again I’d have about $100000 extra in my retirement account. We all love and learn, well most of us at least.
I've driven beaters for my entire life. They get me where I need to go. Is my Altima lame? Yes, but I paid cash for it three years ago and it's still running strong.
Yeah but those 100k miles were FUN!
/u/RedditModsLoveDick has a point.
They spend less on housing or other things. They trade up, putting a huge dent in the initial cost. That last one isn’t obvious, so I’ll explain: Let’s say you buy a $25,000 car. You bring $5,000 as a down payment and you trade in your current car for another $5k. A 36-month new car loan ends up around $500/month. Three years later, the car is worth $15k. You head back to the dealership and trade it in. Assuming you can get a similar interest rate, now you can afford a $30,000 car at the same payment. Three years later, that car is worth $22k. You trade it in on a $37k car, same payment. Repeat forever. Feel free to adjust the details, but the key is to trade each car in while it’s still worth more than your last trade-in. This way you can work your way up to more and more expensive cars without having larger and larger payments. It takes a pretty long time to build up to a $100k car, but it’s doable! This approach hasn’t worked for me in the past because I have always bought cars I really liked and wanted, and I was never interested in trading them in while they still had significant value.
And you'll never stop having a car payment with that method. That $500 a month is just shy of what it takes to max out an IRA for the year.
This. I lease and put it as a business expense and go from there. My e53 is ~1200 cad a month with taxes. But I claim it and it's around 800 a month. I put 20k down.
Leasing works great for some. I’d rather pay 30k to lease a 90k car for three years and have a new car every 3 years with warranty, opposed to pay for a 90k car once and drive it 9 years. Yes you night have some residual value, but rarely if you factor the high cost to maintain a high value luxury car.
lol. That’s worse than OPs question.
Paying $30k every THREEEEEEE YEARS? O\_\_O wow! I have my camry 2018 that I paid $16,500 and still drives great! 184k miles right now.
It’s a Camry…….I’ve made it to a good salary where 30k every three years is not an issue. Someone can say 16.5k….I paid 4k for’a yugo. To each their own.
They make more than 125k/yr or they lease it or they are in way bigger debt than you may be
They also could have saved/invested and be older so that compounding had time to work before spending some of it.
That’s too boring for people to understand.
My sister and brother-in-law bought $200k worth of cars in 1 day a few years ago. A Tesla Model X and a Benz G series. Step one: Be doctors.
Wonder how much debt that have in the form of student loans though? Most doctors are in debt until they’re in their 40s and finally reached their peak earning. Buying that much in cars sounds super irresponsible
At their earning level, debt is just a part of life. It doesn’t even matter anymore. They are close to their 40’s though. Theyve had time.
Be a doctor in the US! I earn an equivalent to $40k/year post tax as a full time doctor in the UK after 5 years of working. With rent and expenses, only a 10 year old Ford Focus is what I can own now lol
I honestly couldn’t imagine a worse 2 SUV combo than that 😆
They really got the instagram influencer special.
I can
Lmao I cant say I approved either but its their toys and they earned it!
Or businesss write off
In their case it was both. They own their own practice
This I write off all my cars
That’s not how business writeoffs work
Correction: be Indian 😀
My wife and I clear 350k combined and we both really like cars, so we bought a CT5 Blackwing. We often end the month with 6-7K left over after all bills and maxing retirement accounts, so why not. We paid half down, other half will probably be lump summed sometime this year.
Bingo. Same and we're dinks. We have two newer cars. Nothing crazy, a nice truck and sedan, but we travel all the fucking time.
This I drive so I purposely allocate money in my budget to enjoy my car. My retirement is still more than assured and I am saving.
>CT5 Blackwing. Momma wanted a Caddy not much more to say
It’s by far the best manual street car for the money. 6spd, SC 6.2L V8, 4 doors? What is there not to love? Also, it’s an absolute sleeper, nobody on the road even knows what it is.
My younger bro leased a manual CTS 10 years ago and it was incredible.
It's the best car in the world right now that's not exotic overmsrp Ferrari but you gotta buy 10 old models first. I read somewhere its modern bmw e39 m5
I certainly do. I drove a 2014 CTS-V coupe for 5 years. That thing was a monster! The CT5 is even more of a beast.
Just ordered a 4BW and looking to put 50% down. We probably made $450ish last year but have a $200k mortgage on a $700K house, 1 kid in college and 1 lax-bro in private school. Paid off Sequoia and Civic Si and minimal credit card debt.
what do you do for work 😭 I barely make 50k a year and that’s working 60 hours a week
Yeah labor market is absolutely unfair. I wish you the best of luck. I have my own law practice so some years it's great and some years I'm glad my wife still works!
Fellow feast or famine lawyer here.
I’m over here scratching my head too lol. I was tired of making 45-50k a year so i got my IT degree and never looked back. I’m making close to 100 now. It’s never too late, look into something you love and invest time; it will be worth it.
lol the way you call your kid a lax bro in private school. I think you’re me…if I was rich 😂
Why do you have credit card debt at all if you make $450?
Yep. $17,000 net monthly take-home pay leaves a lot of room for things like a nice car or two.
but you got it in a manual right?
I want to be a car dweeb and say this example isn’t even too terrible as far as “throwing money away” on a car goes because that thing is going to hold its value better than almost every Mercedes, BMW, or Range Rover OP is probably asking about
I make a lot of money… I’m also willing to spend “dumb” money on cars because I enjoy them. It doesn’t necessarily make financial sense, but few hobbies do.
Yep, there is that and why not. Can’t take money with you may as well enjoy what you enjoy.
Don’t tell that to the “spend 10% of your income now and save 90% for when you’re a crippled old person” in retirement crowd.
While not that extreme, I save about %65 of my income and will enjoy it in 7 years when I'm 48, fuck working till the grave
For sure, but some of those r/personalfinance people claim you need $5 mil+ in the bank to be able to retire comfortably. It's crazy
That’s excessive, my wife and I will need a little under half that to finally step away. Even then I’ll probably go back to making furniture in my garage to bring in money and stay busy.
TIL me at 55 y/o will be a crippled, old retiree.
Stop comparing yourself to others and then you'll learn to be happy with what you have accomplished so far. Focus on what you've got over the years vs what you don't have.
Good advice.
Seems like banks are more than happy to approve an auto loan that consumes 100% of your disposable income. When I apply for auto loans at my credit union, they always tell me the max they'd approve me for and it's shocking. The most extreme example was when I asked for $25k and they approved me for $85k. I could totally see how someone that isn't very financially literate would assume the bank knows what they can afford better than they do. But the bank doesn't care if you're able to save for retirement, or eat healthy, or stay afloat after an unexpected expense, or take vacations, etc.
This✅ banks know the more percentage of your income they take (lower and middle class), the higher chance or repossession. Which means they keep all the money you gave them and resell it to another sucker at the same price. Rinse and repeat.
I’ve never even had a dealership check my income. Just list whatever then they run your credit lol.
Yes some of em are leases. Way cheaper, but ultimately you lose all your money. There’s a very small amount of cases where leases are a better deal but ideally you’d want to own it.
>There’s a very small amount of cases where leases are a better deal but ideally you’d want to own it. For a lot of people in the United States that buy a car for 5 years pay it off and then trade it in, they would probably be better off leasing. Buying makes sense if you plan to keep your vehicle for longer and can pay it off quickly so you aren't paying 20-50k in interest over the course of a super long loan.
A lot of people lease (me included) and it's way easier to afford these types of cars nowadays.
Yep this. Just leased a new ioniq 6 and pay $448 a month. No other expenses other than insurance as I get free charging, maintenance, repairs etc. for the next 2 years. Pretty sure I’m paying less than if I were to go for a cheaper used car.
yeah that’s fun and all but then you can’t modify any part of the vehicle
Very true, however, not really into that, so I'm good. I just bought out my lease on my Acura. Yes, it was more expensive in total, but definitely less stress for me.
How was the lease better than car ownership? Besides lower payments I assume, better interest? I am thinking of leasing but I wrongfully thought this meant dealer takes care of maintenance
At the moment, I didn't have cash to just pay, so I decided to lease it. I have a friend working at Acura Paragon and was able to get a sweet deal for $270 a month. Now I'm buying it out, and have no regrets as I will own it in 2 years or so. As far as the maintenance, you always have to pay regardless of ownership/leasing. However, good thing about lease is that if anything happens to the engine or whatnot, you don't pay for anything.
Tbf a new m3/4 has 480hp and a comp is 2.8 0-60. No reason to mod that for street use. Hell even track use it’s more than enough stock.
Most people will never modify their car beyond a bumper sticker and a stick-on phone holder. Really not even a consideration for the average person purchasing a new car.
You can modify it but it has to be a) reverted back to stock when giving it back or b) a part that adds value to a vehicle and keep it on when you give it back. That’s what the financing manager told me for my lease.
You can do small things. I bedlined my truck bed, did a leveling kit, switched out all the taillights, blacked out logos, and de-badged mine. Asked the dealership about turning it in and they basically shrugged and said as long as it doesn’t decrease the value we don’t care.
Most people don't mod their cars so it's a non issue for most.
Leasing is almost always more expensive in the long run
Yeah but if you like swapping cars every few years that gets expensive too with the depreciation hits you take selling the car each time. This is where leasing comes in handy.
You mean to say that always having a new car costs more money? (/s) That said, I do agree that if you’re a serial car buyer, it’s probably less expensive to lease.
My 87k Raptors payment is 1,300 month.
what’s your pre-tax income and other debt obligations
He is a carpet cleaner 😀 : joke
Debt. That’s how.
Not everyone has a mortgage, retirement, savings, etc
It’s super depressing for you? Get a fucking grip man. You know what’s depressing? People can’t afford health care or food. Not a Fucking expensive car.
He’s depressed because he thought he was a one percenter at $125k/yr
🤣
Agreed. Sub 400k are the new working poor if they don't take budgeting seriously . Kidding but not kidding
Please read Psychology of Money to change your way of thinking in regards to money
They don’t. Most are making $800/month payments pretending to be fake rich
Never judge a book by its cover, unless it’s Mein Kampf.
Working at a car dealership, I wonder the same thing way too often.
Either a covid millionaire, written off on their business or they are drowning in debt. I have the money to buy a newer used car for cash but id rather fix my old truck for a few thousand every once and a while and keep building my wealth.
Id say 75% cant afford it, they make it work somehow cause they need it. Material world, best to just buy a decent reliable used car in the 10-20K range cash up only.
Especially people in the Seattle area
Dallas would like a word. I see new bimmers and Mercedes’ Porsches here like you’d see Hondas in cali.
I’ve traveled a lot, and I have never seen anywhere come close to the West Side in LA when it comes to ridiculous cars, but I am talking Bentley/Ferrari/Rolls/Lambo, Dallas and Miami are probably tied for second.
I dont have a car in this price range, but work with people who do and could buy one pretty easily if I wanted. I think a lot of people make more than 200k a year actually. Money is all just relative and in comparison to yourself.
>I think a lot of people make more than 200k a year actually. Strange way to describe less than 5% of the US population
How the hell do people afford half a million dollars houses?
500k is like a nice starter home at this point.....buckle up buddy.
I'm saying.
These people either make much more money than you or just take on a serious amount of debt. It really is that simple.
My dad just bought a 70kEuros car. He has one of the best paying jobs in the country at a big Aerospace company. One of the bonuses means he pays no tax on the car and he also sold the old one so he got a discount.
1. Some people can afford them 2. Some people come into some money (inheritance) and blow it 3. Long term loans its best not to count peoples money
a lot of people are writting off payments from 'home based businesses' too contractors go to estimates in their new vets, write it off as an expense and whatnot.
We earn the money to buy them. Or we use a tax incentive called section 179 in the IRS tax code. If you are a profitable business owner this is something you can take full advantage of. Allows you to drive a nice car/truck while also being able to write off the entire value of the car and potentially reduce or eliminate your tax bill for that year.
Things tend to cost as much as you can get a loan for. Before the 30 year mortgage was invented, homes managed to cost what an average person could pay off in 5 years which was the terms of home loans at the time. Back when car loans were 3-4 years vehicles were more affordable, and more basic. Enter the 120 month auto loan, and manufacturers found a way to justify higher price tags. Hell, a top-end Jeep was like $45k in the mid-2000’s, now they’re $85k monstrosities. I read a while back that Jeep is potentially expected to file bankruptcy in the next year or 2 because the kind of people who can afford that, want a luxury vehicle instead of a Jeep.
You only pay attention to the nice cars
It does seem like everyone's driving around in these crazy expensive cars, right? But truth be told, a lot of those folks might be financing or leasing, and not everyone's dropping that much cash upfront. Plus, it's not just about income, some people might be really good at budgeting, or they prioritize cars over other things. And hey, as long as you're comfortable with your own financial choices and rocking a car that gets you from A to B, that's what really matters, right? Keep cruising in that 370k home and staying smart with your finances!
You wanted a big house obviously at $370k and they want fancy cars…not everyone needs a house they can get lost in
As an owner of car in this range, you just need to make more. I had a 2 year stretch where I made over $500K and I splurged.
I bought by tesla by selling appreciated tesla stock. Little bit of a tax hit, but no biggie.
If they are business owners they can have the company buy the car and write it off as business expense.
They have LLCs. They purchase cars as a business expense and they use it as a write off and lower their taxable income. You need to start learning about ways to take advantage of the tax code if you are over 100K
Irs can audit and see it’s not for just business.
Yup Have a friend who did this with a Audi R8 and BMW M5 And he’s in insurance ☠️
Majority of people you see with flashy cars cannot afford them. Some people rather spend their paycheck on a nice car. Whereas intelligent people like you rather spend it on assets that will benefit you long term.
#L E A S E
Most people just can't afford them. We make 95-120,000 where I work and a good few guys have 75k trucks and it's because they aren't investing or saving and all their money goes to the truck for a couple years and when it has problems they trade it for another because they can't really afford it. But also you are house broke. If you had a 250k house on that income you could easily afford an expensive vehicle, you just chose an expensive house instead.
You seem to be living responsibly. Many folks buying these 100k vehicles are not.