And it’s not just the car note. It’s property taxes (in VA), increased insurance and depreciation.

Average monthly new car payment is now in excess of $700, even with 84 month notes.

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:OP, we are similar. Our HHI is $350K and I drive a base Honda civic that I bought new for $24k. It's a bit tight for our family of 4. But spending $40k on a car at any income is foolish.

How ironic, you call others foolish for spending $40k on a car, but admit to having spent money buying something that doesn't really fully meet your family's needs for transportation.

Sometimes you have to buy things that don't check all the boxes because that's what you can afford. It's better than buying what you can't afford.
No surprise the average American doesn't have $1000 in their savings account because they think it's reasonable to buy $40k+ cars.

We are not talking about the average American, we are taking about the pp who has a 350k HHI, who can most definitely afford a 40k car. Pp also said 40k car is foolish at any income level.

Bc inventory is so low, dealers are easily getting 5-15k over sticker price. You just have to accept that's the current reality.

+1 to the answers that say yes, you're being unnecessarily cheap and you should buy the new car with the $600/mo car note. If you come into any extra $ like a bonus, go ahead and pay it down early if you don't have a good interest rate. You want peace of mind and a car that will meet your needs. Do it!

Anonymous wrote:

Anonymous wrote:OP, we are similar. Our HHI is $350K and I drive a base Honda civic that I bought new for $24k. It's a bit tight for our family of 4. But spending $40k on a car at any income is foolish.

How ironic, you call others foolish for spending $40k on a car, but admit to having spent money buying something that doesn't really fully meet your family's needs for transportation.

Sometimes you have to buy things that don't check all the boxes because that's what you can afford. It's better than buying what you can't afford.
No surprise the average American doesn't have $1000 in their savings account because they think it's reasonable to buy $40k+ cars.

The Volkswagen atlas has some good deals and you can order a 2023 with no mark up. Comes with a long warranty.

If you buy a 2023 now it will hold value. I just bought a Hyundai at Fitz in Gaithersburg with no mark up.

Chevy has some new three rows in your budget

Anonymous wrote:

Anonymous wrote:My standard limit is 2 months' gross salary/income for any single car purchase, and 3 months' gross salary/income for total cars owned. This amount of money is affordable for an expenditure that conservatively amortizes over 10 years. At normal tax/retirement-savings rates, this works out to about 5% of take-home income.

Remember, it's not about the single cash payment or the monthly installment you are paying, but the depreciation you are taking on the car - that's the true expense of owning a car.

To take the OP's income of 300k, that means no more than $50K for any single car purchase, and no more than $75K for total cars owned. Of course, you don't have to spend this much money on a car. You may have other reasons for not wanting an expensive car, but based purely on financial affordability, this is the level of car expenditure you can afford.

I've never heard that but, for us, that seems high. So 360k/12=30000/month*2 = 60k car?

Yes, you'll be able to *afford* such a car. Here's some simple math: If we conservatively peg the useful life of a vehicle to 10 years 100k miles, after which the car is worth $0, then a $60k car will depreciate at a rate of about $500 a month.

Your take-home with a $360K HHI should be around $15k per month after taxes and retirement savings. A $500 car expense is 3.3% of that. The numbers will fluctuate a bit depending on your particular tax situation, but it's not going to be dramatically different from this. And again, this is a *conservative* calculation.

If you don't hold on to cars for 10 years, we can set the time to 5 years. KBB indicates that on average, cars retain 40% of their original cost after 5 years. 60% depreciated over 5 years for a $60k car is $600 a month, or 4% of your estimated take-home income.

Anonymous wrote:OP, we are similar. Our HHI is $350K and I drive a base Honda civic that I bought new for $24k. It's a bit tight for our family of 4. But spending $40k on a car at any income is foolish.

How ironic, you call others foolish for spending $40k on a car, but admit to having spent money buying something that doesn't really fully meet your family's needs for transportation.

Anonymous wrote:My standard limit is 2 months' gross salary/income for any single car purchase, and 3 months' gross salary/income for total cars owned. This amount of money is affordable for an expenditure that conservatively amortizes over 10 years. At normal tax/retirement-savings rates, this works out to about 5% of take-home income.

Remember, it's not about the single cash payment or the monthly installment you are paying, but the depreciation you are taking on the car - that's the true expense of owning a car.

To take the OP's income of 300k, that means no more than $50K for any single car purchase, and no more than $75K for total cars owned. Of course, you don't have to spend this much money on a car. You may have other reasons for not wanting an expensive car, but based purely on financial affordability, this is the level of car expenditure you can afford.

I've never heard that but, for us, that seems high. So 360k/12=30000/month*2 = 60k car?

My standard limit is 2 months' gross salary/income for any single car purchase, and 3 months' gross salary/income for total cars owned. This amount of money is affordable for an expenditure that conservatively amortizes over 10 years. At normal tax/retirement-savings rates, this works out to about 5% of take-home income.

Remember, it's not about the single cash payment or the monthly installment you are paying, but the depreciation you are taking on the car - that's the true expense of owning a car.

To take the OP's income of 300k, that means no more than $50K for any single car purchase, and no more than $75K for total cars owned. Of course, you don't have to spend this much money on a car. You may have other reasons for not wanting an expensive car, but based purely on financial affordability, this is the level of car expenditure you can afford.

OP, we are similar. Our HHI is $350K and I drive a base Honda civic that I bought new for $24k. It's a bit tight for our family of 4. But spending $40k on a car at any income is foolish.

Anonymous wrote:

Anonymous wrote:Always buy used and pay cash. Never buy new. Save your extra money. Live practically and frugally as much as possible. The more you owe, the less freedom you have.

In the current market,low mileage used vehicles that are up to 3 years old, often sell at the same price as a new vehicle. Some used vehicles are actually priced higher than a new vehicle because the used vehicle is on the car dealer's lot ready for delivery rather than waiting 3 to 6 months for a new vehicle to arrive. Additionally, new vehicles come with 3 year warranties.

This has been my direct experence in my current car search. In fact new cars are often a bit cheaper if the manufacturer offers a loyaty or conquest rebate. Also, if the used cars are CPO they seem really marked up.

Anonymous wrote:Our HHI is a bit more than yours ($500K). We bought an Acadia for about 30K. 1 year old, 20K miles, our payment is about 400/month. That thing is a workhorse.

Different PP but we are also cheap with an HHI of about $500K and are on our second Acadia. New 2011 then bought a year-old 2016 with ~15K miles for about $33K. Both have gone over 100,000 miles with minimal problems. The Traverse is even cheaper.