What's your car payment?

[Anonymous]

We have not had a car payment in years and now need to buy or lease a vehicle. Husband wants a pickup to the tune of almost $600 a month. I am hyperventilating at the thought.

On paper we can afford it, but I wouldn't say easily. I feel like we should budget for much less. We are not in agreement.

[Anonymous]

10 pages of DCUM responses: I only pay cash for cars. WHY OH WHY would one do something as silly as have a car payment? You should only buy a car when you have the cash to afford it.

Reality in the world: About $400-$500 / month.

[Anonymous]

There are always posts like this on DCUM. It is impossible to look at a payment in isolation and evaluate whether someone's car buying habits are good or bad financially. In fact just looking at the payment is exactly what car dealers want you to do.

We bought a $24K Honda Accord on a 24 month loan at .9 percent. The payment was $1000 month. The total interest paid on the loan was $500. We paid off the car early and are still driving it 15 years later. I consider that to be a good financial decision.

If we had financed a $60K car for 72 months and bought a new one before or shortly after it was paid off and always had new cars and car payments, that would be a bad financial decision.

So again, the payment in isolation is not the way to be thinking about this.

[Anonymous]

Minivan payment is $315 and we owe about $10K on it so we're going to pay it off in January with combo of bonus and/or tax return.

DH's 16 year old SUV also died recently so we put $20K down on a new truck to bring the payments down to $400.

So right now the total is ~$715 but it'll drop back down again shortly. We usually aim to stay under $400/month and this will be the first time we've ever had more than 1 at a time.

[Anonymous]

Obviously you showed your DH what kind of car you could buy at your preferred “much less” payment. Or did you just whine without doing any homework or offering any alternatives?

[Anonymous]

Bought a ~$30k subaru forester for 48 month, 0% financing. We pay about $600/mo and it will be paid off in about 6 months.

[Anonymous]

$474 which was higher than I felt comfortable with but it's our only non-mortgage debt and was at such a low interest rate I just went with it. We've got 2 more years on it, but in the intervening years have refinanced the mortgage and knocked $500 off, so it's a wash.

[Anonymous]

The real question is do you need a pickup? If you need it then figure out which you can afford. If you could get by with a sedan you're spending unnecessary money here.

[Anonymous]

Don’t forget that your insurance will probably increase too.

[Anonymous]

In a big fan of buying cars with cash only, but I'd also prefer not to have a car in the first place. Money sucking and they're killing us in so many ways.

[Anonymous]

$430, under $10k to go. Hoping to keep it for 10-15 years. Last car was used and lasted 11 +years.

[Anonymous]

Zero. We saved for years knowing we'd need a new vehicle and paid cash.

[Anonymous]

$2k/month on a loaded Lexus RX 450h. 36-month loan at 1.49% APR; on track to pay it off in 16 months.

I know that sounds high, but I'll have it paid off in less than 1.5 years of ownership and will keep it for another 8 years payment-free.

The purists will say pay cash and they're not wrong. I prefer taking an ultra-short, ultra-low interest loan, knocking it out ahead of schedule on a nice reliable vehicle, then keeping it for awhile.

[Anonymous]

The other thing about pick ups is that they are generally hard to find used; and relatively expensive to buy used.

I know many people who have them and do truly need the pick up features that are unavailable in a car. They are towing regularly, and working on construction type projects where they need to transport materials.

On this board when people talk about status symbols vehicles, it is usually a Range Rover or Cayenne. Both for elsewhere in America, the most desirable status symbol is a new large American pick up. Does your family truly need the capabilities of a pick up, or does your DH want one because it is cool?

BTW, I have no problem with people buying $$$ vehicles just because they are cool. However, it sounds like this purchase could impact some of the other financial priorities of your family.

[Anonymous]

Anonymous wrote:Bought a ~$30k subaru forester for 48 month, 0% financing. We pay about $600/mo and it will be paid off in about 6 months.

Unless you put $25k down on this vehicle, you are not going to pay it off in 6 months by paying $600 a month.

OP, we typically buy used cars that we can pay cash for. But a few years ago, I bought a splurge vehicle. Our payments were $640 a month for 5 years and we might have put down around $10k, but I don't remember. Also, we bought a $20k vehicle earlier this year and pay $400 a month on it on a four year loan.

Thing is, cars are expensive. At $600 a month, you're only getting like a $28k vehicle if it's a four year loan, a $36k vehicle on a 5 year loan and a $43k vehicle on a 6 year loan.