Saving

[Jerry91]

In my opinion it won't be a bad option if you continue paying off the car loan and also save money side by side for your home. Thus, by the time you pay off your car, you will also have a good amount of money saved for the down payment of your home.

[autoxer]

When I was your age, I ran out and bought a WRX. I loved that car, life was great. Then I started saving for a house and realized how much of a handicap that car was. I know you don't want to get rid of it, but it is a huge financial drain and will make getting your own house much more difficult.

new age GTO's are a very limited production car im hoping it will go up in value over time but for now im just going to enjoy it...

Don't count on it, the only GTO's that are appreciating in value were built 4 decades ago. In five years your '05 GTO will probably be worth half of what it is now. If you owe $20,000 and are paying 8% interest for 5 more years, then you will probably pay $5k - $6k in interest. So you are going to shell out $26k more to end up with a car that might be worth $8k. That's $18k pissed away, because you have to have 400HP. You don't have to drive a prius, but keep in mind that your decision to keep this car, is prioritizing it over a house.

things are home for me are not too stable... and im skeptical about draining all of my savings... what should i do?? Save 10 grand then start making double payments??

If things aren't too stable, then why is this car more important than a house? If you go back to school, how are you going to pay for that? If you need to move out and rent an apartment, how are you going to save money?

[feh]

OP - first thing you need to do is educate yourself, so you can answer these questions for yourself. These pages are excellent places to start:

http://www.bogleheads.org/wiki/Bogleheads%C2%AE_personal_finance_planning_start-up_kit

http://www.bogleheads.org/wiki/Bogleheads%C2%AE_investing_start-up_kit

Hopefully you will learn to pay cash for future car purchases. At the very worst, never take a loan of more than 3 years.

[bjl584]

As to the other post i cannot find a similar car for half the price.. you show me a reliable 400 HP 2 door coupe that isnt a vette or a masarati for 10 grand lol thats an 05 or newer.. I know i owe 5,000 more than its worth.. sorry for the grammar im on my phone its easier this way.

Why do you need a car with 400 hp?

There are plenty of coupes out there that cost way less. They don't have 400 hp but they will get you to work just fine, and they will get way better gas mileage along the way.

[bigdaddybus]

A non car enthusiast will never understand a car enthusiast. I understand why you wanted the car, I have a summer car (400+rwhp) and a diesel winter truck with 400 hp and 800 ft lbs of torque. I have spent thousands on mods,track days,and fuel. It's Just How We Are wired.

But I am also a technical analyst who loves math and budgets. The math is pretty simple, more than 10% of your income towards a vehicle is too much. With 2600 a month you should be in car payment of 260 a month or less. This car is really more than you can afford if you were out in the world on your own. Since you live at home with very generous parents you can get by with a big car payment. It's not a a aweful thing, just realize what you are giving up (in this case you can't save as much to get out on your own)

Also, anything over 4% for a car loan now is pretty bad. Your really paying a premium for the car due to your lack of credit/or bad credit.

[MonaroGM]

When I was your age, I ran out and bought a WRX. I loved that car, life was great. Then I started saving for a house and realized how much of a handicap that car was. I know you don't want to get rid of it, but it is a huge financial drain and will make getting your own house much more difficult.



Don't count on it, the only GTO's that are appreciating in value were built 4 decades ago. In five years your '05 GTO will probably be worth half of what it is now. If you owe $20,000 and are paying 8% interest for 5 more years, then you will probably pay $5k - $6k in interest. So you are going to shell out $26k more to end up with a car that might be worth $8k. That's $18k pissed away, because you have to have 400HP. You don't have to drive a prius, but keep in mind that your decision to keep this car, is prioritizing it over a house.


If things aren't too stable, then why is this car more important than a house? If you go back to school, how are you going to pay for that? If you need to move out and rent an apartment, how are you going to save money?

1. Getting rid of the car is going to be a pain in the ass since i owe more than its worth..

2. I dont have to have 400HP i love the red leather,the power, everything about it makes me HAPPY and thats worth more than being cheap.. money is money i may have made a mistake buying it but it makes me HAPPY..i will learn from my mistakes..i will find a way to pay this car off and have money to move out and will not finance again.. im not that far in the hole.

3. If it doesn't go up in value screw it I enjoy every second of driving the car.. IMO if your car doesn't put a smile on your face every time you drive it you've invested in the wrong vehicle.

4. Im going to start using the 800 dollars a month i save towards making car payments and im going to take the 2 grand i get during incometax and put that down on the car as well... does that sound like a good idea?? Then when i owe what its worth ill refinance it.. I thank you all for your input i know i may have made a mistake but im learning as i go and i wont make the same mistake twice.. young a dumb ??

[feh]

But I am also a technical analyst who loves math and budgets. The math is pretty simple, more than 10% of your income towards a vehicle is too much. With 2600 a month you should be in car payment of 260 a month or less. This car is really more than you can afford if you were out in the world on your own. Since you live at home with very generous parents you can get by with a big car payment. It's not a a aweful thing, just realize what you are giving up (in this case you can't save as much to get out on your own)

Yup. The car is clearly a want, not a need. The OP will (hopefully) learn over time that wants need to be pushed further down the list of priorities.

[MonaroGM]

A non car enthusiast will never understand a car enthusiast. I understand why you wanted the car, I have a summer car (400+rwhp) and a diesel winter truck with 400 hp and 800 ft lbs of torque. I have spent thousands on mods,track days,and fuel. It's Just How We Are wired.

But I am also a technical analyst who loves math and budgets. The math is pretty simple, more than 10% of your income towards a vehicle is too much. With 2600 a month you should be in car payment of 260 a month or less. This car is really more than you can afford if you were out in the world on your own. Since you live at home with very generous parents you can get by with a big car payment. It's not a a aweful thing, just realize what you are giving up (in this case you can't save as much to get out on your own)

Also, anything over 4% for a car loan now is pretty bad. Your really paying a premium for the car due to your lack of credit/or bad credit.

anything above 10% of yearly income to much for a car?? god is America in trouble LOL!

[bigdaddybus]

anything above 10% of yearly income to much for a car?? god is America in trouble LOL!

Take a look at this web page, it's a quick budget overview.

http://www.householdbudgetcoach.com/the-nitty-gritty-guidelines-for-family-budget-percentages/

You don't have to tell us the number, but add up your payment, insurance, upkeep, fuel, etc. and get a per month number this car costs you. That is your transportation cost.

It's not bad since your at home, if you were out on your own it might feel like a boat anchor around your neck.

[DisciplinedSaver101]

Is the $5,500 you have saved earning less than 1% in a savings account, or has it been earning 25% interest in the stock market this year? If it's in the stock market, I'd leave it there. If it's in a saving account, I would consider using some of it to pay down the car loan, but not much. That's a nice safety net to have. However, I would consider using a significant portion of your monthly savings of $800 to pay down your car load faster. Especially if you are currently putting that money in a savings account.

Good luck!

[rbusch]

my opinion

Pay off that car loan asap. I don't recommend depleting your savings but you would want to figure an emergency fund and then throw everything else at it. No reason to pay couple thousand in interest on that car loan. If your situation allows pay the car off then save for the best down payment u can. Again the more down the smaller the loan the less interest you pay.