Originally posted by: rbloedow
BTW - I'll be making $10.50 an hour, with a minimum of 30 hours a week.
That's $16,380 - $21,840 a year pre-tax. Count on losing 28% roughly to taxes, so roughly $11,800 - $15,750 post tax. That is $983 - $1,312 per month.
We'll take an average $11.5K price, subtract your $2,500 trade=in + $2,000 cash = $7,000.
Finance $7,000 at a modest 10% interest (remember this is a used car, rates are higher) for 48 months and your payments will be $178. You will have to have comprehensive insurance since it will be financed, so add another $250 a month for insurance (just an estimate).
Total cost for vehicle + insurance, not counting gas/maintenance/etc. = $430.
Round that up to $500 to cover the total cost of the car (gas + averaged maintenance costs).
You will be spending a minimum of over 1/3 your monthly take home on the car, and very possibly more than half.
That's a very, very high percentage of your income to spend on a vehicle.
I'm not trying to be a wet blanket here, but I go through the same math every time I think about buying a new(er) car.
And every time, the bottom line is that's a damn lot of money to commit every month. And I make $10,000 a year more than you.
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