Cost of a car and HHI/NW

[Anonymous]

I bought my first new car at 42. All others had been used and they served me well. I simply promised myself that I will try to keep the car longer and take better care of it. So far so good. It cost $30k in all, including interest I paid on the loan. I wished for a $25k new car all in, but it wasn't that easy to find.
I make $50k max on a good year. According to 20%, I had no business buying it at all.
I'd think more about one's needs and ability to pay for it than HHI/NW.
I even calculated how much the car costs me total with insurance, gas, parking,maintenance and it's about $25 a day after 5 years. Becomes cheaper as time goes by and I can divide the total by more years.

[Anonymous]

HHI ~$200k
Last purchased a 2019 car in 2021 for $19k. Other car was purchased new in 2016 for $28k.

[Anonymous]

Anonymous wrote:

Anonymous wrote:Before pandemic the rule of thumb is total car value less than 20% of your HHI. Obviously it varies a lot by individual situations.

F that. I make $180K and I’m not sticking to a $36K car. I’m single and have no expenses. I’ll be buying a $55K Audi and paying cash.

I'm European and wouldn't get an Audi, or any German or American car, even if it were free. I'd pick from the list of top 15 most reliable cars under $35k that fit my need and be done. You sound like a guy.
If you like fixing cars so much, I'm sure mechanics are in need, and if you like pissing money away ($180k,vow), there's a casino across the river.

[Anonymous]

HHI 700k

Me: Bought a lightly used Volvo in 2019, paid cash $31000, I plan to drive it for another 5-6 years.

DH: BMW X5, paid cash for a new one in 2021, $71000, this is his first and only new car at age 52. He plans to drive it for at least 10-12 years.

[Anonymous]

I guess I did it backwards. Had expensive sports cars when I was young. Now, HHI is $1m+ and we have modest family cars.

[Anonymous]

I'll never forget visiting my family in rural Iowa. There was a house in the neighborhood that looked decrepit. Like, torn up plastic over the windows, siding falling off, sagging porch. This giant, shiny truck pulls up front that had to cost 30-40k and presumably the dad and two kids come out and go into the house. The kids and dad are filthy and wearing dirty ill fitting clothes. But... the family clearly spent their money on this truck and not a livable house and clothes for their kids. In this area of Iowa they could have bought an entirely new house for $90k. I still can't get over it.

[Anonymous]

Love my 5 yo VW that cost $28K new. Only has 60K and will drive another 5 years at least.

[Anonymous]

Anonymous wrote:This is why when you read average and median stats for 401k savings, they're shockingly low. Like half of all Americans have $0 saved for retirement.

Then you go read how the Ford F150 and all of these insanely expensive trucks are top selling cars. Go out and see all of the audis, BMWs, lexus, Teslas etc. on the roads. People in America spend, spend spend, have a debt fueled life, and save very little. Then they have to shell out even more for stupidly expensive repairs and maintenance.

We have a healthy income and drive a completely paid off Mazda that was less than $21k. We will need a new car soon, but I wouldn't feel comfortable buying anything more than a smallish Toyota.

I respectfully disagree. I think there are a lot of people who make enough money to drive luxury cars and still save for retirement and travel and do everything else they want to do. 7.6 million people in the U.S. make over $300K/year.

[Anonymous]

Anonymous wrote:

Anonymous wrote:This is why when you read average and median stats for 401k savings, they're shockingly low. Like half of all Americans have $0 saved for retirement.

Then you go read how the Ford F150 and all of these insanely expensive trucks are top selling cars. Go out and see all of the audis, BMWs, lexus, Teslas etc. on the roads. People in America spend, spend spend, have a debt fueled life, and save very little. Then they have to shell out even more for stupidly expensive repairs and maintenance.

We have a healthy income and drive a completely paid off Mazda that was less than $21k. We will need a new car soon, but I wouldn't feel comfortable buying anything more than a smallish Toyota.

I respectfully disagree. I think there are a lot of people who make enough money to drive luxury cars and still save for retirement and travel and do everything else they want to do. 7.6 million people in the U.S. make over $300K/year.

That’s a very small fraction of the U.S. population.

[Anonymous]

Anonymous wrote:I'll never forget visiting my family in rural Iowa. There was a house in the neighborhood that looked decrepit. Like, torn up plastic over the windows, siding falling off, sagging porch. This giant, shiny truck pulls up front that had to cost 30-40k and presumably the dad and two kids come out and go into the house. The kids and dad are filthy and wearing dirty ill fitting clothes. But... the family clearly spent their money on this truck and not a livable house and clothes for their kids. In this area of Iowa they could have bought an entirely new house for $90k. I still can't get over it.

The truck is probably used for business and is written off.. That would be my guess.

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:This is why when you read average and median stats for 401k savings, they're shockingly low. Like half of all Americans have $0 saved for retirement.

Then you go read how the Ford F150 and all of these insanely expensive trucks are top selling cars. Go out and see all of the audis, BMWs, lexus, Teslas etc. on the roads. People in America spend, spend spend, have a debt fueled life, and save very little. Then they have to shell out even more for stupidly expensive repairs and maintenance.

We have a healthy income and drive a completely paid off Mazda that was less than $21k. We will need a new car soon, but I wouldn't feel comfortable buying anything more than a smallish Toyota.

I respectfully disagree. I think there are a lot of people who make enough money to drive luxury cars and still save for retirement and travel and do everything else they want to do. 7.6 million people in the U.S. make over $300K/year.

That’s a very small fraction of the U.S. population.

300K means that you could buy a car for 60K according to the formula someone listed.

[Anonymous]

Anonymous wrote:This is why when you read average and median stats for 401k savings, they're shockingly low. Like half of all Americans have $0 saved for retirement.

Then you go read how the Ford F150 and all of these insanely expensive trucks are top selling cars. Go out and see all of the audis, BMWs, lexus, Teslas etc. on the roads. People in America spend, spend spend, have a debt fueled life, and save very little. Then they have to shell out even more for stupidly expensive repairs and maintenance.

We have a healthy income and drive a completely paid off Mazda that was less than $21k. We will need a new car soon, but I wouldn't feel comfortable buying anything more than a smallish Toyota.

Some families cannot do "smallish" as their only vehicles. Some have multiple kids and pets, and family/friends carpooling. Minivans aren't necessarily cheap either, but 3 row SUVs (which are extremely popular family cars) tend to cost quite a bit even if not European makes. Also, if you spend a lot of time in the car and travel long distance you probably want something comfortable. There is a difference in interior features and comforts between basic cars and entry level luxury cars, people apparently value this for some reason.

[Anonymous]

Anonymous wrote:Car culture is depressing. We are rich because we have only ever purchased one car, it was paid off in one year, it's 14+ years old, cost us 13K, and it has fewer than 90K miles on it. We take the bus, walk or metro most places. Spending 50K a year every few years (not to mention the insurance for an expensive car and fuel) is killing most Americans and then don't even know it.

You realize not everyone lives in walkable areas and especially close to metro, right? We live in a relatively walkable area served by buses, but if using metro/buses (have to take a bus to the metro) it takes 1.5 hours to go somewhere where drive is only 15-20min. We have friends/family who live in more car dependent places, so we have to drive to visit them. We like to go on trips out of town and even travel 100s of miles to vacation destinations vs. flying. We have kids and pets and often drive kid's friends. We used to live in the city where we rarely used a car and it wasn't important. I know exactly what you are talking about. But once you start using your car a lot you start seeing its limitations - too small, can't take all the kids with us in our car, so that means another parent has to drive, which means that this kid may not come if parent is busy, not comfortable enough on long trips, doesn't have enough space for luggage if traveling with pets, etc, etc. Then a need to have a second car.. and you start looking for something you never considered in your life and always frowned upon (the dreaded huge SUV or a minivan ).

[Anonymous]

Anonymous wrote:I hate any percentage rule of thumb. I think it’s better to calculate payment and decide what is comfortable on your net pay in light of other expenses. People are going to place different values on cars and come up with different numbers.

+1

[Anonymous]

Anonymous wrote:

Anonymous wrote:This is why when you read average and median stats for 401k savings, they're shockingly low. Like half of all Americans have $0 saved for retirement.

Then you go read how the Ford F150 and all of these insanely expensive trucks are top selling cars. Go out and see all of the audis, BMWs, lexus, Teslas etc. on the roads. People in America spend, spend spend, have a debt fueled life, and save very little. Then they have to shell out even more for stupidly expensive repairs and maintenance.

We have a healthy income and drive a completely paid off Mazda that was less than $21k. We will need a new car soon, but I wouldn't feel comfortable buying anything more than a smallish Toyota.

Some families cannot do "smallish" as their only vehicles. Some have multiple kids and pets, and family/friends carpooling. Minivans aren't necessarily cheap either, but 3 row SUVs (which are extremely popular family cars) tend to cost quite a bit even if not European makes. Also, if you spend a lot of time in the car and travel long distance you probably want something comfortable. There is a difference in interior features and comforts between basic cars and entry level luxury cars, people apparently value this for some reason.

This is the biggest crock of S of all time. You clearly drink the automotive industry Kool aid convincing you that you need some ridiculously stupid sized SUV etc. 'because I have a family!'. Newsflash: people all over the world have families. People in Europe have families of 4 and 5 and are completely fine driving a smaller wagon. This video completely obliterates this line of logic.

As the video goes on to show, SUVs often have less towing space or just as much towing space as many smaller sized wagons. The auto industry just likes to sell you a massively oversized death machine to make more money off gullible people like you.