Play Suze Orman - Can I Afford It?

[Wino]

This is a perfect example of the "you can afford the payments" mentality.

No. You cannot afford the car. It doesn't matter that you can afford the payments. If you buy it, you will regret it within 2 years.

[ideasonfinancing]

Pretend you're Suze Orman (or don't - I don't care) and tell me if I can afford it.

Want: Tesla Model S at $88,000 before tax credits
Cost: $1,300/month for 72 months at 1.99% (yes I can get a loan at that rate for this car)

Income: $165,000 pre tax and about $107,000 after tax ($8,900/month).
Cash Assets: Basically nothing, like $5,000, but that's only because I just started my job.

Expenses:
Rent: $2,200
Student Loans: $85,000 total, and about $1,000/month for 10 years at 6.8%

Bonus:
My income for the year in which I buy the car will be $117,000 after tax because of the combined state and federal tax credits.

No, it is not happening. No matter how good the deal is. You do not have enough savings yet. Maybe in a couple more years, you can slap your brand new Tesla on all of us but not now. You have to save more and focus more on the more important needs and wants.

[Reggie]

I think the biggest problem is that you are spending money before you earn it. That's a decent income, but it isn't guaranteed. What happens if you lose the job after six months and need to take a 50% pay cut? Don't think it could happen? Ask the thousands who lost their homes between 2007-2009 after they were laid off.

[feh]

This is a perfect example of the "you can afford the payments" mentality.

No. You cannot afford the car. It doesn't matter that you can afford the payments. If you buy it, you will regret it within 2 years.

Yup. It's troubling that the OP even asked this question.

OP - please do some reading on personal finance. I can't recommend books, but I can recommend this board, as well as bogleheads.org. Your salary puts you in a very enviable position; your question indicates if you don't change your mindset, you're going to waste the opportunities in front of you.

[disneysteve]

Why do I seem to be the only one here who thinks OP was a troll? New poster whose user name was based on the question being asked, and a completely ridiculous question at that. I suspect he did it just to watch everybody go nuts responding.

[MonkeyMama]

I didn't reply - seemed trolly. Don't feed the trolls.

[Wino]

Why do I seem to be the only one here who thinks OP was a troll? New poster whose user name was based on the question being asked, and a completely ridiculous question at that. I suspect he did it just to watch everybody go nuts responding.

I took the original post at face value. I didn't see the one response from the OP until just now reviewing the thread. Had I seen that, I probably would have likewise smelled a troll.

[canigetacar]

Haha. No, not a troll, but perhaps only 50% serious with the question (so maybe that does make me a troll?) I do seriously want the car, and like to believe I could go through with the purchase, but honestly I'd probably chicken out before I signed any contracts. Anyway, I will heed your advice and not make this purchase. I have a well-running junker now and there's an allure to driving it around in the presence of nicer cars for the showoff factor (really not that much different than wanting a nice car to show off - funny how it works both ways). I'm going to take the money I could have spent on a car payment and just start adding that to my savings for a home. Then I'll go in as deep into a mortgage as I possibly can! JK (not really). All the best to those who responded!

[canigetacar]

Holy crap! No way. You cannot afford it! I have more money and less debt than you and I'm freaking out to save even more money. Save save save! Buy a car in another year after you have an emergency fund.

Wow. You worry too much.

[scfr]

You want an expensive car. You need an adequate emergency fund, a savings plan for future expenditures, and adequate retirement account contributions on a regular basis.

Take care of your needs first.

Congrats on the new job.

Agree! Ask again in 5 years. In the meantime, pay down the student loans and save at least 50% of your income (split between retirement and other savings). If you still have a high-income job 5 years from now with good future prospects, then you'd probably get completely opposite responses from the forum members.

[dawnwes]

Start your job.

Keep your job.

Start saving $1,300 plus the insurance costs for THAT car in a savings account every month for 3 years. Don't touch it for anything else.

Then see if you really still want that kind of car.

Dawn

PS: We do have friends who got that particular car this summer. But I am quite sure his income is more than double yours.