How much can I afford?

[KentState]

How does one go about calculating what they can afford in a car?

My lease is up in September and I will buy a new car this time around and hopefully keep it for 8 years or so. I have no problem paying my lease payment, have a house, put money into 401k, and have plenty left over for vacations, going out, hobbies. I will be starting a new job which will net around $1800/month more take home.

Should I start with the car I want and figure out the payments?

I'm looking at either a G35x, CTS, or Lexus IS.

 

[cardiac]

Sounds like you can afford $1800 a month If you are making it ok on what you make now, and you will have an additional $1800 a month, then there shouldn't be a problem with any of the 3 you listed....

 

[KentState]

I guess a payment of $800/month+ just seems so large, but car prices keep going up and I know others are doing it.

 

[MixMasterTang]

Originally posted by: KentState
I guess a payment of $800/month+ just seems so large, but car prices keep going up and I know others are doing it.

Don't get caught up in the race of what others are doing! Do what you feel comfortable doing (which includes a payment you feel comfortable with).

 

[maddogchen]

start saving that extra 1800 a month in a new car fund. in August see how much that adds to your existing savings for a car. Buy a car equal to that amount.

 

[oiprocs]

I'd never be able to justify an $800/month car payment, even if it was the car of my dreams. That's rent for many people.

 

[zerocool84]

Originally posted by: oiprocs
I'd never be able to justify an $800/month car payment, even if it was the car of my dreams. That's rent for many people.

With as much $$$ as the OP makes it seem he has, $800 is nothing to him.

 

[Arkaign]

Well, to be honest, I think you should save $1800/mo for six months, then deposit that money into a separate savings account specifically put aside for emergencies with making the car payment. It will draw interest, and on the off chance that you get downsized or your income is suddenly cut/reduced by any serious amount, you'll have at least six months or so to figure out how to replace that income, or find a cheaper car.

All that aside, find a car that you love, that will fit within your budget, and drive happy! Post with what you end up with!

 

[Demon-Xanth]

Here's a tip:
Once you get a budget (that INCLUDES maintenance, wear items,and insurance), find the car that would make you the happiest in the long term. Don't think about what other people have or the status that it gets you.

When I bought my last car, I had a 20k budget. The only cars that would make me happier (Grand Prix GTP, WRX, Firebird...) than what I got would've cost me $25k or more. 6 years and 93,000 miles later, I still have no regrets and there are still no cars under 25k (and very few under $50k) that I'd trade for. It really is the perfect car for me. Sure, it won't get me laid outside of a club. But a cargo light does give off a romantic glow.

Edit:
One thing you can do until your lease is up is to set aside as much money as is comfortable each month. And that will be how much you're comfortable with giving to your car.

 

[rh71]

The best way to do it is to save for months/years & buy it straight up, don't even finance unless the rates are great. The 2nd best way is to figure out how much you can afford each month calculated with financing then multiply it out. Don't ever tell the dealer this of course - he will just put the numbers in his favor for the final price of the car.

BTW, grats on making the decision to buy instead of rent... err lease. And I also agree with the above, buy the car you love the most, not just because it fits your $ or because it resells well.

 

[DisgruntledVirus]

http://www.tcalc.com/tvwww.dll...=bfgfcu&PmntAmt=300.00

There you go.

Put in how much you want to pay per month, interest rate, down payment, trade in, and the loan term. It will spit out the highest price you can afford (final price that is, so include the tax, title, and license fees in this).

Just as an idea. $800/mo, $3k down, $0 trade, for 60 months @ 6.9% you can get a $46,498.02 car.

 

[amdhunter]

Go by 1/2 of what your salary is. That's how I do it (although I didn't follow it when I bought my Jetta.) I originally wanted an IS 350.