Making Auto Purchase Plans as Self Employed

[qsnoodle]

Hey gang,; Can someone help me figure out what a good car budget would be to abide by when you have your own business and $ can fluctuate?

Ive been without a car for 2 years now and buying a new one this week. I cant take it anymore...
Im in business with my husband. Last year we did ok.. i made the error of not seeing his 3 slow months Late summer/early fall which I will plan for this year.

We just paid off 8K in debt in less than 3 weeks and our business is growing this year considerably. ( So far!)

I took an average of our income over the past 4 months period and using that as a yearly income base. Would you base your car budget over the recent months? There are always unknowns but we see things getting better if not maybe having those few short months. Then again... you never know..murphy could move in.

Any ideas on how safe to play your auto cards?

I realize we could save for a car but we pay cash for health ins and other things people dont ( $1000's/mo for health,life disab etc). And we need a care this month asap.

Just looking for some collaboration.

[DebtFree&Broke]

Take your average income from last year and see what fits in your budget. I would say save up for the car so you don't have to pay interest (that's what we are doing right now). But since you can't wait, I suggest that you don't go out and buy a $10,000 car since your income instead predictable. Instead find a good car for around $3000 and pay it off as fast as your budget will allow.

If you can't save for the car because of your $1000 insurance cost, where is the money for the car payment going to come from? Don't buy a car if you can't afford it.

[bjl584]

Rule of thumb if you have to finance is to take out no more than a 36 month loan and have the payment represent no more than 10% of your monthly take home. Your income fluctuates, but you can take a running average over the past 6 months or so and get a devcent idea of your income.

Another option is to save up for something. You've gone 2 years without a car, what's another 6 months or so?

[disneysteve]

i made the error of not seeing his 3 slow months Late summer/early fall which I will plan for this year.

I took an average of our income over the past 4 months period and using that as a yearly income base. Would you base your car budget over the recent months?

You've contradicted yourself. First, you say that you now realize there are a few slow months during the year. Then, you say you want to base your budget off of the past 4 months which don't include those slow months.

I'd say no, it is not okay to base your spending on 4 good months while ignoring the 3 slow months. Why not base your spending on the past 12 months? That will include the good and bad months together.

Once you have that number, then do as bjl584 suggests. Borrow for no more than 36 months with a payment not exceeding 10% of your monthly take home income. And that is a maximum guideline. Even better if you can spend less than that.

[jpg7n16]

Say you didn't come to this forum, what type of car would you be looking at?

How much are you looking to spend?

How much would you be able to spend if you HAD to buy a car with cash? ($500? $4,000? $15k?)

[disneysteve]

We just paid off 8K in debt in less than 3 weeks

Was that the result of some windfall or just out of regular income? If the latter, then you should be in good shape to save up for a month or two and pay cash for the car. If you could pay off 8K in 3 weeks, in another 3 weeks, you could have 8K in cash set aside to buy a nice used car.