2 Car Payments?

[IcSyU]

Right after our escape from Nebraska, we had a couple years of double house payments and car payments. That was hideous.

And yet still better than living in Nebraska. :biglaugh:

 

[Tre4ISU]

I agree with you in general, but that Masarati is still a poor financial choice. If one has enough wealth built up to take that hit, that's fine. I am just saying that cars a huge financial drain.

I am speaking from the perspective of a young, recent college grad who cringes when I see the type of money my friends are spending on their first "big boy" vehicles. No money to put down on a house, no idea what a retirement account is, negative net worth, and a $35,000 truck seems to be the norm in my circle.

I don't disagree. I'm in a different situation because mine is my business and personal vehicle. I need certain things for each purpose so now I have a diesel pickup I can just barely justify but not having it would make my life much more difficult in business. I also can't afford issues at the wrong time of year. Of course I've never really bought vehicles based on what I need. More so just what I want so I'm fine with it.

 

[DeereClone]

There's in inherent problem with the comments on the thread related to being "able to afford it". The problem is, most American's equate "being able to afford it" with having enough money to make the monthly payments. There is so much more to your personal financial picture that must be considered.

You really only know what you can really afford, if you're on top of all these things:

* do you an emergency fund that could cover 6 months of expenses should you need it?
* are you saving enough for retirement so your nest egg will generate a minimum 85% of your pre-retirement income (more importantly, have you even tried calculating this/)
* do you have zero other consumer debt (i.e...all debt paid off except your mortgage)?
* (if you plan to help pay for your children's higher ed) have you calculated what they'll need for tuition in the years they plan to be in college and are you saving at a rate that will provide the amount you wish to help them?

If studies are to be trusted, most Americans that think they can afford 2 car payments really can't (or shouldn't).

This is solid advice.

The priorities of some people are in a sad state when instead of saving money for their kid's education they blow money on new vehicles every year to impress the guy next to them at a stoplight.

 

[00clone]

This is solid advice.

The priorities of some people are in a sad state when instead of saving money for their kid's education they blow money on new vehicles every year to impress the guy next to them at a stoplight.

Shh....don't let out the secret...the people who are in payments and mortgages up to their eyeballs are the people who panic and stop buying when the economy stumbles in the slightest, allowing those of us who are responsible to come in and buy stuff at fire sale prices.

:wink:

On a related note, if they ever get cybookie back up and running and if I ever drain my points on a bad bet, I know what thread I'm starting....Buy cash/loan/lease....

 

[dmclone]

It would be nice if we knew everyone's net worth, credit score, amount of debt, income, age, etc. so that I would know who the internet rich guys are before I receive advice. :smile:

On a serious note, I probably lost more in my retirement today then I paid for my first 3 or 4 cars.

 

[wxman1]

Always easier said than done, but I'm in the same boat. I will never buy a new car again unless both the wife and I are retired and financially independent. This coming from a buy that bought a new SUV 10 years ago (and still drive it):

1.SUVs are wastes of money. Unless you need the raised wheelbase for offroading, get a hatchback of some sort. I know they can be pretty dorky, but they are the most efficient form.
2.Don't ever borrow money to buy a new car.

I'm not saying this as a know-it-all, more as someone who has bought new vehicles and learned the hard way. I never carried two car payments, but having two outright owned vehicles for several years I see that cash can do amazing things toward home improvement, extra mortgage payments, in a basic Vanguard total stock fund, REITs or toward a rental property monthly payment.

Stay strong Snowcraig. Find a solid hatchback on Craigslist that allows you to pay cash or pay if in a year or two. The payment, insurance, and fuel cost savings will do wonderful things for you.

This is a debate of utility but SUV's offer a whole lot more than a bigger wheel base. We currently have a hatch back and as soon as we have kids it will be useless due to lack of space for traveling, an SUV will easily handle the job though.

 

[capitalcityguy]

It would be nice if we knew everyone's net worth, credit score, amount of debt, income, age, etc. so that I would know who the internet rich guys are before I receive advice. :smile:

On a serious note, I probably lost more in my retirement today then I paid for my first 3 or 4 cars.

It is not a loss unless you sell.

 

[cloneluke80]

1 decent reliable semi newer car for out of town and family trips (wife's daily driver)

1 junker for in town running around (my daily driver)

0 car payments

My A/C broke 3 years ago and I refuse to fix it, $2500 just not worth it, I guess I am just a cheapo that doesn't care what anyone thinks...

I'll gladly drop $100 per month in maintenance/preventative stuff before I buy a new car.

 

[capitalcityguy]

1 decent reliable semi newer car for out of town and family trips (wife's daily driver)

1 junker for in town running around (my daily driver)

0 car payments

My A/C broke 3 years ago and I refuse to fix it, $2500 just not worth it, I guess I am just a cheapo that doesn't care what anyone thinks...

I'll gladly drop $100 per month in maintenance/preventative stuff before I buy a new car.

I’ll say this, we’d have a lot fewer personal bankruptcies and a lot more people on the path for saving for a successful retirement if more people had your mindset. That said, I too drive a very modest vehicle (not sure it is a “junker” though) to and from work. It is well below what the Jones’ would dictate I should be driving…I’m sure. That said, I’d personally have to draw the line at not fixing the air. But that is me. I’m all for saving $$$ and not hamstringing one’s personal financial situation with car payments, but not at the expense of reasonable comfort. Not having air during humid Iowa summers, would be a “no go” for me. More power to you though.

 

[cloneluke80]

I’ll say this, we’d have a lot fewer personal bankruptcies and a lot more people on the path for saving for a successful retirement if more people had your mindset. That said, I too drive a very modest vehicle (not sure it is a “junker” though) to and from work. It is well below what the Jones’ would dictate I should be driving…I’m sure. That said, I’d personally have to draw the line at not fixing the air. But that is me. I’m all for saving $$$ and not hamstringing one’s personal financial situation with car payments, but not at the expense of reasonable comfort. Not having air during humid Iowa summers, would be a “no go” for me. More power to you though.

Funny thing is, once you save enough money to pay cash for a new car, by the time you have that chunk of change, you don't want to part with it so you say "let's wait another year" and stretch out your cars even more!

 

[acoustimac]

My question is...why buy new? Get rid of the depreciation and buy a 1-2 year old vehicle with 25k on it. I'm not a big fan of the Durango, but that is your choice.

 

[capitalcityguy]

Funny thing is, once you save enough money to pay cash for a new car, by the time you have that chunk of change, you don't want to part with it so you say "let's wait another year" and stretch out your cars even more!

THIS.


As I commented earlier, it is really a pychological barrier to have to pay cash for a vehicle. Most of us HATE laying out that much hard earned cash for something. That is why financing is such a beautiful thing (from the perspective of the car dealership/auto makers) ,as it is so much less painful for the consumer....and thus people tend to overspend.

 

[Agclone91]

Both of our car's are paid off. I am looking to replace my 17 year old civic late this spring or sometime this summer. However my wife now has a home day care and wouldn't mind having something that she can take the kids somewhere in, I am hoping to figure out some way to write part of that off though. We have some decisions to make since we need a bigger vehicle to get back and forth to Iowa when we want and with what we want.

To me it all comes down to what you can/want to afford. If you have the money available and won't be upset about not being able to use that for something else than go for it.

Wouldn't her day care company just have to buy it from your family, then write it off as a business expense?

 

[VTXCyRyD]

Both of our car's are paid off. I am looking to replace my 17 year old civic late this spring or sometime this summer. However my wife now has a home day care and wouldn't mind having something that she can take the kids somewhere in, I am hoping to figure out some way to write part of that off though. We have some decisions to make since we need a bigger vehicle to get back and forth to Iowa when we want and with what we want.

To me it all comes down to what you can/want to afford. If you have the money available and won't be upset about not being able to use that for something else than go for it.

Late 90s or early 2000s Suburban or minivan can be bought really cheap. I have a 1999 Suburban in good shape that probably isn't worth more than $2500-$3000. No, it's not for sale.

I figure Suburbans are cheap because people consider them more of a gas hog than a pick-up. They aren't. Same gas mileage, just a bigger tank. I can drive close to 700 miles on the highway between fill-ups (42 gallon tank). Granted, my 1999 Suburban gets 16-17 mpg and a newer one can get close to 20mpg but the newer one will cost over 10x more.

 

[Incyte]

Middle class family with two new 2013 vehicles? Seems pretty asinine to me.

I'd rather write checks to my early retirement account than to car payments but to each his own.

 

[capitalcityguy]

Wouldn't her day care company just have to buy it from your family, then write it off as a business expense?

It sounds like he's talking about a small in-home daycare business, not a full blown brick and mortar outfit. My guess is they'll still use the vehicle for their own personal family use too.

I think what is needed is to do a little research and you'll find that it is probably as staightforward as tracking mileage. If you use tax software like Turbotax, it steps you through this pretty well.

 

[ISUAlum05]

This is solid advice.

The priorities of some people are in a sad state when instead of saving money for their kid's education they blow money on new vehicles every year to impress the guy next to them at a stoplight.

Perhaps some parents believe their children should pay for their own college education, should they desire one?

 

[kingcy]

Paying a car payment is the hardest check to write. Glad we are done with that. It sucks knowing you always owe more than the car is worth.

 

[capitalcityguy]

Perhaps some parents believe their children should pay for their own college education, should they desire one?

We don't plan to pay for 100% of our daughter's college, but we do hope to be able to pick up at least the tuition. Yes, there may be a belief that kids should pay their own way but the reality is this means many are leaving college hamstrung with student loan debt of $40,000 or more. That's a tough life lesson IMO that will affect serveral aspects of their adult life including how early they'll be able to start to afford to save for retirement.

 

[stateofmind]

It would be nice if we knew everyone's net worth, credit score, amount of debt, income, age, etc. so that I would know who the internet rich guys are before I receive advice. :smile:

On a serious note, I probably lost more in my retirement today then I paid for my first 3 or 4 cars.

Dang, thanks for making me go check. I've lost $10,000 over the last couple of weeks. But I'm still up around 20% since same time last year. I better take the penalties and cash out and buy a couple more cars...