Ideally, if you don't feel like paying for everything in cash, how much should you spend on a car? What percentage of your total yearly income is ideal?
>>28975555 Car people don't generally make financially sensible decisions when it comes to cars. They either hoard a couple of $5k-$8k used cars which were all purchased cash, or they overextend and spend 40% of their annual on car payments and insurance because they just HAD to have a Porsche or a buck tooth M3.
The answer you're looking for is ideally no more than 10-15% of your annual take home.
>>28975555 My rule of thumb is that it shouldn't be more than you could reasonably pay off in one year if you had no other bills or expenses but the car market is far shittier now so take that with a grain of salt.
>>28975581 Ideally yes, but that's pretty difficult if you're earning like $50k a year or something. At that level you should probably buy cash, but if you absolutely have to finance I would not go more than 20% for the payment, insurance, fuel and maintenance.
At the end of the day, transportation shouldn't be a major financial burden that makes you feel like you have to sacrifice your standard of living to afford it.
>>28975581 Just payment. There was that one anon in another thread who only made like 150k a year blowing 3200 a month in a fucking Porsche which is retarded.
>>28975555 It doesn't just depend on your income but on your current savings. Too many people buy cash, draining all or most of their savings, when honestly financing it at 6.5-7.5% and getting 20% from some basic index fund has been incredibly lucrative for several years now. Plus then you have savings in case of an emergancy. Not saying the market will continue to grow like this, just consider the opportunity cost to such a large cash payment.
>>28975657 unfortunately these days, pulling from Experian, the US national average sits at 6.9(nice)% for new cars and 10.4% for used now keep in mind that is just the average if you're credit is good and you have membership at a good credit union you can get rates low as 4.6% on top of dealership specials like Volkswagon trying to sell Atlases by offering rates as low as 1.9% but for 60 months but the days of being to get a 3% APR for simply having credit not in the shitter seems to be over personally I can't seem to find an APR better than 6% for cars I'd actually want and that's with a credit union and a pretty good (albeit not perfect) credit score
>>28975723 Indeed. That's why I bought my car cash. My brother went the other way and is financing a BMW he can't really afford for the next 72 months. It's pretty sweet.
>>28975723 Yeah the real median pay in this country is something like $22-23.50 an hour, maybe a little less if we cost control for the wildly different areas. A line chef making 28 in san fran and a pothole filler making $11 in kentucky aren't really typical representations.
>>28975648 >index funds Jews and boomers sure are shilling those a lot. Every other YouTube video is also shilling hard.
Sounds like they want their house of cards to stand a bit longer before they can rug pull everyone. Remember, the rich have absolutely no incentive to let you make money for any reason whatsoever.
>>28975555 What's your budget look like? What kind of financial goals do you have? Are you also saving up for a down payment on a house? Are you currently paying a mortgage? Large financial decisions should not be made in isolation. Write up your current budget, tallying up your income and expenses, and then write up a target budget that supports your goals. If your rent is taking up 50% of your income, then obviously the amount you can spend on a car will be less.
>>28975895 On paper I gross 13792 a month. Mortgage is 2500, bills and shit always end up being around 5.5k, so 8000 minus gives me around 5800 a month in free income. But there's always something coming up.
>>28975572 >>28975601 My take home is about $130k. So you're saying the maximum I should spend on a car is $20k/yr? That's $1666/month. That's ridiculously high. What am I missing?
>>28975996 People just need to tell themselves anyone that isn’t a wagie is a liar. I’ve been on since 2004 and I’m an attorney in my mid 30s now. I’m not making $60k.
The actual advice given here by high earners gets laughed off by people making 1/5th their income. People can be crabs in buckets.
>>28975555 It depends on your income. Spending 20% of your monthly take home on a car when you take $3,000 a month is risky, doesn't leave a lot of room after rent, food etc. But spending 20% of your take home when you're bringing in $10-$12k+ a month is completely different. Still allows you to save thousands after all your other bills. A percentage based rule doesn't work for all incomes.
>>28976411 my first paycheck when I got a raise to 175k/y had me crying at the amount of tax that was taken out., then my friend showed me what making 400k a year on the books looked like. It only gets worse unless it's your own business, which pretty much maxes out at 30% on profit and then writeoffs make it come down depending on what you can swing.
>>28976456 As an attorney a lot of my comp is in my bonus. My take home per check right now is around $8k but it’ll jump to over $10k pretty soon when I cap my 401k. But last year my bonus was $180k.