Acura TSX within my means to purchase?

[spidey07]

that's putting your debt to income ratio pretty high, probably not a good idea from a financial perspective. Try to keep it under 15%.

I can't tell you how many kids I see get out of school and get their first real job and driving a fancy new car. They wake up in their mid/late twenties and say "what happened? Why do I not have any money and all my other friends are in thier own homes?"

 

[Azurik]

I'm 24 so maybe I can chime in since I was in somewhat of a similiar situation.

I came out of college with no debt... this means no school loans, credit card bills, IOU's, etc. I had my original car since I was 16, and it needed fixing like every other month by this time.

I just bought a 2006 Acura TSX w/ NAV. Add the insurance cost, and it comes to around $30k. Crap... I just realized we don't have the same same same scenario... I bought the car with cash so nevermind.

I'd still go for the car in your situation. You have no debt which puts you in a better position than many. The housing market WILL go down (no one has got the exact timing right, but it's sooner than later). I live in the Boston area and it's due for a crash within the next couple years so you can start saving for this opportunity than buying right now.

 

[Mo0o]

You're not tied down at all right now. enjoy your money and for the housing bubble to come down.

 

[sygyzy]

ones3k - PM me.

 

[mugs]

Originally posted by: Azurik
I'm 24 so maybe I can chime in since I was in somewhat of a similiar situation.

I came out of college with no debt... this means no school loans, credit card bills, IOU's, etc. I had my original car since I was 16, and it needed fixing like every other month by this time.

I just bought a 2006 Acura TSX w/ NAV. Add the insurance cost, and it comes to around $30k. Crap... I just realized we don't have the same same same scenario... I bought the car with cash so nevermind.

I'd still go for the car in your situation. You have no debt which puts you in a better position than many. The housing market WILL go down (no one has got the exact timing right, but it's sooner than later). I live in the Boston area and it's due for a crash within the next couple years so you can start saving for this opportunity than buying right now.

He has $1200 to his name, your situation is not even close to yours. For someone with a lot of money, you give really crappy financial advice. Granted, he will enjoy the car a lot, but it's a pretty bad financial decision.

 

[Noirish]

if you absolutely need a car, you should spend the money.
otherwise, wait like 6 months and then decide.

 

[jaedaliu]

Originally posted by: mugs

Originally posted by: Azurik
I'm 24 so maybe I can chime in since I was in somewhat of a similiar situation.

I came out of college with no debt... this means no school loans, credit card bills, IOU's, etc. I had my original car since I was 16, and it needed fixing like every other month by this time.

I just bought a 2006 Acura TSX w/ NAV. Add the insurance cost, and it comes to around $30k. Crap... I just realized we don't have the same same same scenario... I bought the car with cash so nevermind.

I'd still go for the car in your situation. You have no debt which puts you in a better position than many. The housing market WILL go down (no one has got the exact timing right, but it's sooner than later). I live in the Boston area and it's due for a crash within the next couple years so you can start saving for this opportunity than buying right now.

He has $1200 to his name, your situation is not even close to yours. For someone with a lot of money, you give really crappy financial advice. Granted, he will enjoy the car a lot, but it's a pretty bad financial decision.

Your upper limit for what you spend on your car is hard capped by what you're willing to spend, AND what your boss drives. It's generally pretty poor taste to drive a nicer car than your boss (well, my boss is one of the exceptions ot the rule, he makes $175k a year, and drives an old chrysler minivan) I'd take a look at what your coworkers drive and try not to spend too much more money than them (well, if you're in sales and want to be flashy, spend some more)

edit: suggestions -- new civic Si is nice, and a little cheaper. I'm partial to nissan and their higher-torque engines. Depending on how "rice" you want to feel, and how new the car should be, a 240sx, or sentra-r, or altima-ser, or maxima are very nice cars. but if you're going to be economical, find a used civic, corolla, or focus. If your commute's more than a few miles, you'll want to think something small so you can save a few bucks on gas (it's $10 for me to get to and from work every day, if i had the girly's civic, it'd just be $6.60)

 

[Garet Jax]

Originally posted by: ones3k

Originally posted by: AgaBoogaBoo

Originally posted by: GrammatonJP

Originally posted by: AgaBoogaBoo
Go with option B and save your money, you can do much more with it that will impact your future. Make sure to properly invest it and you'll come out ahead of the crowd down the road.

I would go with B and put some 401k money away.. your company have flexable spending ? put some in that too.. lower your tax rate if possible..

Agreed, get started on things like a 401k plan as soon as possible. The sooner you start the better.

Edit: lol, I've made 4 or 5 posts in this thread already, I'll give it a rest but keep what I said in mind

My company matches 401k up to 3000 yearly. I was thinking to put in 3k yearly, have the company match that, for a net of 6k investment yearly. Should i be putting more into my 401k?

The most important thing is to max the company match. From there it is a very good idea to max both 401K and ROTH IRA. This will position you exceedingly well for early retirement .

 

[beyonddc]

Might want to consider some other car such as the 2006 civic or the 2006 mazda 3.
It'll be atleast 10k cheaper even you buy it new.

 

[DaveCSparty]

You're 22 and making 65K, that means you probably have tremendous upside. If you like the car and will be financially stable in the upcoming years, go for it. It's a big commitment though so make sure you really like the car

 

[masshass81]

From the info you presented about your financial position, yes, it is within your means to purchase the TSX, but you should wait at least 3 months to see how the job goes before you make the commitment. As for being a financially sound decision? Knowing that luxury cars (even entry-level) are sold at a premium, I would say no. In addition to the TSX drinking premium, the insurance will be more expensive compared to a non-luxury mid-sized sedan or compact car.

But hey, we all work hard for our money. If the cost is justified by your satisfaction and lighter bank account, then go for it. But you should really give it a few months of working before making a purchase.

 

[Reckoner]

You should look into the 06 Legacy GT. Subaru's offering a $1500 rebate and you can get a brand new one at 24-25k. Hell of a lot better than the TSX too imo

 

[ones3k]

Suppose i decide to buy a car such as Honda civic for say, 18k. Since i have no assets, i'll have to take a loan on the civic. Suppose i take a 5 year loan on the civic. Now by purchasing the civic i'm saving roughly 10k over 5 years or 2k per year. What should i be using this extra money for thats going to radically incease my financial standing? Even if i finance the TSX over 5 years, i'll still be able to maximize my company 401k match, max my IRA, and easily save an additional 10k yearly. I'll probably even be able to save over 10k yearly, since i don't spend much money.

What should i do with the extra 2k yearly i save from the Civic ?

 

[raildogg]

What is your job?

 

[mugs]

Originally posted by: ones3k
Suppose i decide to buy a car such as Honda civic for say, 18k. Since i have no assets, i'll have to take a loan on the civic. Suppose i take a 5 year loan on the civic. Now by purchasing the civic i'm saving roughly 10k over 5 years or 2k per year. What should i be using this extra money for thats going to radically incease my financial standing? Even if i finance the TSX over 5 years, i'll still be able to maximize my company 401k match, max my IRA, and easily save an additional 10k yearly. I'll probably even be able to save over 10k yearly, since i don't spend much money.

What should i do with the extra 2k yearly i save from the Civic ?

If you're trying to justify it that hard, just go ahead and buy it man. But at least wait a few months and see how much you really save each month.

Also, not sure if Acura does this, but Honda offered 1.9% financing for recent college grad when I graduated.

 

[spidey07]

Originally posted by: ones3k
Suppose i decide to buy a car such as Honda civic for say, 18k. Since i have no assets, i'll have to take a loan on the civic. Suppose i take a 5 year loan on the civic. Now by purchasing the civic i'm saving roughly 10k over 5 years or 2k per year. What should i be using this extra money for thats going to radically incease my financial standing? Even if i finance the TSX over 5 years, i'll still be able to maximize my company 401k match, max my IRA, and easily save an additional 10k yearly. I'll probably even be able to save over 10k yearly, since i don't spend much money.

What should i do with the extra 2k yearly i save from the Civic ?

you're just trying to justify a car that is too expensive for you.

go ahead. You won't listen.

I didn't either and am now paying the consequences dearly (trying desparately to catch up financially)

 

[masshass81]

I picked up a new '06 Accord EX for 21k before tax, title, and license (should be even cheaper now) - very nice car for the money and well worth the extra 3k from the civic. You can even get the Accord EX-L w/ navi for around 24k. It is pretty easy to find Hondas for under invoice.

Anyway, just wait a bit and in the meantime, go to www.edmunds.com and research what you want to potentially buy. :thumbsup:

edit: You say you don't spend much money now, but after a few weeks of those fat paychecks, you'll be buying stuff left and right (maybe upgrade the 'puter?, eat out more often, misc electronics galore, etc)

 

[masshass81]

 

[Azurik]

Originally posted by: mugs

Originally posted by: Azurik
I'm 24 so maybe I can chime in since I was in somewhat of a similiar situation.

I came out of college with no debt... this means no school loans, credit card bills, IOU's, etc. I had my original car since I was 16, and it needed fixing like every other month by this time.

I just bought a 2006 Acura TSX w/ NAV. Add the insurance cost, and it comes to around $30k. Crap... I just realized we don't have the same same same scenario... I bought the car with cash so nevermind.

I'd still go for the car in your situation. You have no debt which puts you in a better position than many. The housing market WILL go down (no one has got the exact timing right, but it's sooner than later). I live in the Boston area and it's due for a crash within the next couple years so you can start saving for this opportunity than buying right now.

He has $1200 to his name, your situation is not even close to yours. For someone with a lot of money, you give really crappy financial advice. Granted, he will enjoy the car a lot, but it's a pretty bad financial decision.

mugs, as always, I appreciate your bluntness, but I stand by what I said. He's ahead of the game compared to his peers and with no debt with a decent paycheck coming in, he's in a position to afford this car if he wants to. I never said it was financially the best thing to do, but then again, most of our purchases never are. You're young once and to spurlge a bit doesn't hurt unless you can't control your daily spending.

If you want me to break it down;

Best Move: Buy a 2-3 used reliable car and save all you can. Invest in your 401k to the employer's matching limit, then put $4,000 in a ROTH, then continue with the 401k to max contribution. Build a 3 month emergency savings and build another savings for a future house purchase once the pending house bubble comes down. This is the WISEST decision. Come on mugs, you think I didn't know this?

Neutral Financial Move: What I said before.

Bad Move: Finance even a bigger new car purchase. Since this is the first time you are making real money, celebrate by blowing your whole paycheck every weekend.

 

[jhayx7]

Originally posted by: ones3k
Suppose i decide to buy a car such as Honda civic for say, 18k. Since i have no assets, i'll have to take a loan on the civic. Suppose i take a 5 year loan on the civic. Now by purchasing the civic i'm saving roughly 10k over 5 years or 2k per year. What should i be using this extra money for thats going to radically incease my financial standing? Even if i finance the TSX over 5 years, i'll still be able to maximize my company 401k match, max my IRA, and easily save an additional 10k yearly. I'll probably even be able to save over 10k yearly, since i don't spend much money.

What should i do with the extra 2k yearly i save from the Civic ?

My advice is to save that extra 2k (and more) a year for a house. You need to beat PMI so start saving now! That is another regret that I have, not saving more for a house...

 

[ones3k]

Originally posted by: spidey07

Originally posted by: ones3k
Suppose i decide to buy a car such as Honda civic for say, 18k. Since i have no assets, i'll have to take a loan on the civic. Suppose i take a 5 year loan on the civic. Now by purchasing the civic i'm saving roughly 10k over 5 years or 2k per year. What should i be using this extra money for thats going to radically incease my financial standing? Even if i finance the TSX over 5 years, i'll still be able to maximize my company 401k match, max my IRA, and easily save an additional 10k yearly. I'll probably even be able to save over 10k yearly, since i don't spend much money.

What should i do with the extra 2k yearly i save from the Civic ?

you're just trying to justify a car that is too expensive for you.

go ahead. You won't listen.

I didn't either and am now paying the consequences dearly (trying desparately to catch up financially)

I don't see how i will be trying desparately to catch up financially by financing a civic over a TSX. Sure, the TSX is splurging a bit, but desparately trying to catch up financially? i dont know.

 

[LegendKiller]

I'll pm you tomorrow. However, if you buy an 18k car as opposed to a 28k car with 5yrs and 7%, you are looking at about 200/mo difference in payments. That will be ~2,600/yr or more in payments and interest.

It may not strap you financially, but it's still a bad decision.

All you gotta do is delay gratification for a few years. Then go and buy a nice car, heck, with the money you have saved and gotten returns on, you can go buy a nice TL.

I have nothing to gain by suggesting you just delay and wait it out for a bit. It's a wise move and something you will *never* regret. If anything, your delay leads to a much better life down the road. However, the flip side of that is that you can end up with plenty of regrets if you buy.

 

[spidey07]

ones3k,

I am trying to relate to you my own experiences. Especially after seeing many of my young friends starting out.

I've posted before on here about how I wished I would have listened to those older and wiser than I. If I would have listened to them I would be a millionaire by age 33. But I didn't.

Do the math. That car is too expensive for you. By every stretch of fiscal responsibility/good decision that car is too expensive for you. You're debt to income ratio is too high. I know that being so young that seems like a lot of money for you, but truth be told - it isn't. That is just your income.

Do the math.

Or don't listen (like I did) and find yourself way behind the curve. It's your choice and I can't tell you what to do. All I can do is tell you it's a bad idea.

The purpose of your money is to make more money for you. Income is just income.

And all this coming from a guy who loves nice cars.

Do the math man. I just wish I would have listened to those older/wiser than I when they told me "spidey, that's too much car for you and you will kick yourself later"

I didn't listen and I'm kicking myself. go figure.

 

[JS80]

Why not get a $5k corolla and save the rest for a house?

 

[ones3k]

Originally posted by: spidey07
ones3k,

I am trying to relate to you my own experiences. Especially after seeing many of my young friends starting out.

I've posted before on here about how I wished I would have listened to those older and wiser than I. If I would have listened to them I would be a millionaire by age 33. But I didn't.

Do the math. That car is too expensive for you. By every stretch of fiscal responsibility/good decision that car is too expensive for you. You're debt to income ratio is too high. I know that being so young that seems like a lot of money for you, but truth be told - it isn't. That is just your income.

Do the math.

Or don't listen (like I did) and find yourself way behind the curve. It's your choice and I can't tell you what to do. All I can do is tell you it's a bad idea.

The purpose of your money is to make more money for you. Income is just income.

And all this coming from a guy who loves nice cars.

Do the math man. I just wish I would have listened to those older/wiser than I when they told me "spidey, that's too much car for you and you will kick yourself later"

I didn't listen and I'm kicking myself. go figure.

So what should i do with this money i'll be saving by now purchasing the TSX? I'm assuming you think i should invest heavily? How should i invest my funds?