Car payment suggestions

[maat55]

I am sure some are to be had, but he has a specific idea/model/make/mileage/years in mind and use prices are around $30K or more.

Dawn

What you want and what you can afford under a good financial plan may be two different things. You need to establish an auto budget and good means at which to pay for them, then decide what you can afford.

I can easily afford to buy a new BMW, but not under my financial plan.

[dawnwes]

Sounds like we would be back to the $25K range though on the mercedes.

How do you like your Jetta tdi?

Dawn

06-07 CDI (diesel) mercedes can be had for under $30k

They will run forever and go like hell (and get 30+mpgs in a full size sedan).

I have my eye out looking a CDI. I still drive a jetta tdi (diesel) but don't really want to part with 50+mpgs

[dawnwes]

Right, which is why I said we had already decided the BMW was out of the question.

Dawn

What you want and what you can afford under a good financial plan may be two different things. You need to establish an auto budget and good means at which to pay for them, then decide what you can afford.

I can easily afford to buy a new BMW, but not under my financial plan.

[maat55]

Right, which is why I said we had already decided the BMW was out of the question.

Dawn

You were saying that a 50k car was out of the question. Do you even have a financial formula that determines how much you will spend on cars?

There are many formulas like: no more than three years payments, no more than 50% of your income tied up in autos, boats etc. combined, cash only.

Your OP question suggests that you have no plan. You might want to make one. Many here have a system they use. Mine is the DR plan. IMO, cars are not as important as retirement and emergency savings.

I personally do not want to have a large amount of debt in case of jobloss or health emergency. You have to decide how much risk you decide you can bare. If I did not want to part with a large part of my savings, I would pay cash for much less car.

[dawnwes]

Well, we had a plan. Then he found the car he wants!

It is fine. We talked it out last night and have decided against the car. We will keep looking.

Job loss isn't a concern, but of course, health issues could always be an unforeseen problem. No amount of emergency fund could really help with that if it were bad, although I could go back to work. We have almost a full 12 months of EF saved. Our retirement is at 15% and has been for 20 years. We do follow a DR type plan, although the plan we have allows for more car/auto percentages. I don't even agree with their percentages. Editing to add: the car we want would even be within the "transportation" percentages on DR and we could still add in gas, upkeep, and tax and insurance and still be within DR recommended guidelines.

I know some say they wouldn't ever buy an expensive car, even if their house were paid off and they had years of savings in the bank and could pay cash. That is fine.

Others say not to spend more than 50% of your income on a car....in that case, we could get the BMW new. We would never go that far.

So, yes, there are many different "plans" and I was curious as to what plans most of you use.

Making a blanket, "I would never spend that much" isn't really helpful to me. Do you make 20K per year? Then yeah, I wouldn't buy much of anything if I were in your shoes either. Making a more concrete statement like, "I would not spend more than 10% of my income on a 3 year loan" is far more helpful.

Dawn