Dang, so you should be making $500k to buy a M3

[brainhulk]

'Never spend more than this much of your income on a car,' says millionaire finance expert

Not following the 1/10th rule of car buying led to a $15,000 loss — and it hurt like hell.

www.cnbc.com

The atot dream is gone

 

[allisolm]

What a crock.

 

[shortylickens]

From a financial standpoint it totally makes sense. But sadly the average american is more than happy to indenture himself for a lifetime just to buy a nice shiny giant fucking liability.
Theres way too many middle class people out there with fifty thousand dollar pickups. And banks love them.

 

[mistercrabby]

Live like no one else, so that later you can live like no one else. -Dave Ramsey

 

[purbeast0]

When I graduated school and got my first job making $48k/yr, I wanted an M3 SSSOOOOOO bad and said I was going to buy one as soon as I started a "real" job. I wasn't looking at a brand new one, but one that was still only a couple years old. I remember looking at em and they were like $45k - $50k I think. This was back in 2004.

In hindsight I am super glad I did not waste my money on that lol.

 

[highland145]

What a crock.

Didn't stop me from sending it to my 18 y.o.

 

[Mai72]

From a financial standpoint it totally makes sense. But sadly the average american is more than happy to indenture himself for a lifetime just to buy a nice shiny giant fucking liability.
Theres way too many middle class people out there with fifty thousand dollar pickups. And banks love them.

Yea. It's why so many Americans are in financial trouble. I know people who make less than $25k and they're driving $30k cars. The car is worth more than their yearly income. They will all try to rationalize why they need the car. I've had $2k cars in the past that have lasted 2-3 years. No issues. Yea, I've needed minor repairs, but I had ZERO car payments. The average car payment is $500 stretched out over 5 years. Crazy.

 

[ponyo]

Good old CNBC. So they're putting yet to be released Model Y in the same category as Lambo Huracan and Bentley Continental. lol. CNBC is starting FUD early on the Model Y.

 

[IndyColtsFan]

Yea. It's why so many Americans are in financial trouble. I know people who make less than $25k and they're driving $30k cars. The car is worth more than their yearly income. They will all try to rationalize why they need the car. I've had $2k cars in the past that have lasted 2-3 years. No issues. Yea, I've needed minor repairs, but I had ZERO car payments. The average car payment is $500 stretched out over 5 years. Crazy.

I buy new cars and drive them into the dirt. I drove a Grand Prix which I bought new in 2001 until 2016. The only reason I finally got rid of it is that I was facing a few repairs and my wife was "embarrassed" to be seen in it. I expect my current car to last 10-15 years as well. I seriously considered replacing it with a BMW but I'm glad I didn't.

 

[Brainonska511]

Good old CNBC. So they're putting yet to be released Model Y in the same category as Lambo Huracan and Bentley Continental. lol. CNBC is starting FUD early on the Model Y.

Isn't CNBC the one that put out that ridiculous pie chart for expenses of a 25-year old making $100k? 99% of their stuff is click-bait nonsense that is totally out of touch with reality.

Edit: yes: https://mashable.com/article/25-year-old-budget-cnbc-tweet/

 

[repoman0]

Article does not understand marginal utility of money it seems.

I bought my E46-gen M3 for $25k and I don't think I was even making ATOT minimum wage at the time. It's worth nearly double that now, but doesn't matter because it's a forever car, and I doubt I'll be able to outdrive it on track anytime soon. One of my better purchases for sure. I've almost sold it once or twice for practical reasons like the fact that I don't drive it through winter, could make a bunch of money on it, etc. but my girlfriend / now fiancee strongly suggested I keep it. She claims she doesn't want all the hours we've spent working on it together to go to waste, but I think she's just worried that I'll come home with a new M2 or 981 GT4.

 

[Mai72]

I buy new cars and drive them into the dirt. I drove a Grand Prix which I bought new in 2001 until 2016. The only reason I finally got rid of it is that I was facing a few repairs and my wife was "embarrassed" to be seen in it. I expect my current car to last 10-15 years as well. I seriously considered replacing it with a BMW but I'm glad I didn't.

We make purchases emotionally, and not rationally. Marketers know more about human psyche than the average person. They know the triggers, and what is more likely to make you buy that item that you couldn't possibly afford. We think that we are so smart. We aren't. Citibank, Mastercard, Ford, Chevy Toyota know more about us then we know about ourselves.

 

[Midwayman]

Wow... its easy to say only spend 10% when your income is so high that it includes reliable and nice cars. For a person making $40k a year they shouldn't be buying a new car probably, but at some point you want to be buying something that doesn't break down all the time, is safe etc. Public transit just isn't a practical option many places. Relatively low income just means you're stuck with sub-optimal choices a lot of the time. You can't afford to look at the long term.

 

[brainhulk]

Wow... its easy to say only spend 10% when your income is so high that it includes reliable and nice cars. For a person making $40k a year they shouldn't be buying a new car probably, but at some point you want to be buying something that doesn't break down all the time, is safe etc. Public transit just isn't a practical option many places. Relatively low income just means you're stuck with sub-optimal choices a lot of the time. You can't afford to look at the long term.

It says an electric scooter should do nicely and be plenty reliable

 

[sdifox]

It says an electric scooter should do nicely and be plenty reliable

They don't do too well in snow and ice.

 

[Fritzo]

I was laughing at some Bozo on MSNBC the other day spewing this crap. I think they base income/expense ratios to people living downtown in major cities. This guy was saying 10% of your annual income should go to buying a car- so if you make $62000, you should buy a $6200 car.

LOL

First, a $6200 car is going to be something with 150K+ miles and 15 years old, so you're going to spend $1000+ a year to keep the thing running.
Second, if you're making $60K+, that's a professional career level job, so driving a rust bucket oil leaking car is going to make you look like a moron
Third, if you don't live in a big city, your rent/mortgage/expenses aren't going to be nearly as high as the 10-20% that live there, meaning you have a lot more disposable income.


You want money saving car advice?
- NEVER BUY NEW. Buy all cars 2-4 years old. Off-lease single owner cars are the best bet: they've most likely been taken care of, the dealer doesn't want them, and often you can get a year or two of factory warranty remaining on them.

- Never go above a 3 year loan: Your payments (if needed) should be affordable to pay off in 3 years. This way your car will have worth when it's sold and you won't be on the hook for 7 years with a 150K mile car

-Buy used cars with under 40K miles: there's a ton of them out there with 2 year leases being popular, the car will look and feel nearly new, and you enjoy a 50% discount in price.

These have never failed me. Right now my wife is driving a $63K Audi A6 TDI that we picked up with 28K miles for $17900. We traded in a POS van we've had forever and knocked $2K off of that, then were offered a 1.9% loan. We're making 2.9% in our saving account, so instead of paying cash we took a 2 year loan on it. I'm in a BMW right now and did something similar. Great cars for less than the price of a new Kia

 

[BudAshes]

I was laughing at some Bozo on MSNBC the other day spewing this crap. I think they base income/expense ratios to people living downtown in major cities. This guy was saying 10% of your annual income should go to buying a car- so if you make $62000, you should buy a $6200 car.

LOL

First, a $6200 car is going to be something with 150K+ miles and 15 years old, so you're going to spend $1000+ a year to keep the thing running.
Second, if you're making $60K+, that's a professional career level job, so driving a rust bucket oil leaking car is going to make you look like a moron
Third, if you don't live in a big city, your rent/mortgage/expenses aren't going to be nearly as high as the 10-20% that live there, meaning you have a lot more disposable income.


You want money saving car advice?
- NEVER BUY NEW. Buy all cars 2-4 years old. Off-lease single owner cars are the best bet: they've most likely been taken care of, the dealer doesn't want them, and often you can get a year or two of factory warranty remaining on them.

- Never go above a 3 year loan: Your payments (if needed) should be affordable to pay off in 3 years. This way your car will have worth when it's sold and you won't be on the hook for 7 years with a 150K mile car

-Buy used cars with under 40K miles: there's a ton of them out there with 2 year leases being popular, the car will look and feel nearly new, and you enjoy a 50% discount in price.

These have never failed me. Right now my wife is driving a $63K Audi A6 TDI that we picked up with 28K miles for $17900. We traded in a POS van we've had forever and knocked $2K off of that, then were offered a 1.9% loan. We're making 2.9% in our saving account, so instead of paying cash we took a 2 year loan on it. I'm in a BMW right now and did something similar. Great cars for less than the price of a new Kia

What savings account is getting you 2.9%?

 

[Fritzo]

What savings account is getting you 2.9%?

Our local bank. They have a high yield savings plan with 2.9%. You need a minimum $25K minimum balance or it drops to 1.3%

 

[[DHT]Osiris]

I mean, that whole thing is pure lunacy given that a 10-yo econobox will probably cost you more than a new-ish mazda 3 or even model 3 for that matter, assuming you keep it for any reasonable amount of time. Not to mention that where I am, something capable of winter driving starts north of 10k for something not already dissolving from salt anyhow, so may as well stretch a bit further and get a vehicle worth a damn that won't kill me if I slide off a road.

I bought a 35k car at 26 while living in dorms in the military making somewhere around 25k/yr, with an 11k down payment and made double payments for like two years straight. Still driving it a decade later, why on earth would I have purchased some piece of shit that I'd have to spend 20k keeping on the road and might have gotten me killed rather than just buying something decent from the outset?

 

[BudAshes]

Our local bank. They have a high yield savings plan with 2.9%. You need a minimum $25K minimum balance or it drops to 1.3%

Damn that's nice, I have about 50k or so in a savings account and I've now had to move banks twice with it because the banks drop my interest rates after they give you an advertised rate for the first couple months. They start at like 2.3% and then drop it on you down to around 1.8%. Shifty bastards. It's not that it's a huge sum of money, it's more the principal of the thing.

 

[Fritzo]

Damn that's nice, I have about 50k or so in a savings account and I've now had to move banks twice with it because the banks drop my interest rates after they give you an advertised rate for the first couple months. They start at like 2.3% and then drop it on you down to around 1.8%. Shifty bastards. It's not that it's a huge sum of money, it's more the principal of the thing.

Yeah, there's some other requirements it looks like (you have to have a home loan, and some other stuff). It's Huntington Bank (best bank I've ever used. Been with them for 25 years!)

 

[Fritzo]

double post

 

[Midwayman]

It says an electric scooter should do nicely and be plenty reliable

Good luck taking that on the highway or using it in bad weather. (FWIW when they say scooter I'm assuming some thing like a 50cc motorscooter which is okay if you live in a mild climate and only need to travel on surface streets.)

I could probably get away with an e-bike or scooter for 4-5months of the years if I was dedicated.

 

[dasherHampton]

You have to make $100,000+ to drive a Yaris?

 

[BudAshes]

You have to make $100,000+ to drive a Yaris?