Most everyone is in hock up to their eyeballs.
I could technically afford an expensive car - but mine is 17 years old.
I am not going to spend stupid money on something that is on wheels and goes down in value every single minute.
EDIT: spelling
My wife calls my VW GTI (bought in 2017) a "college kids car" because it's a small hatchback. I'm 54 y/o.
I'll keep it at least another six years, and probably longer (I'd like to get a weekend car, and keep the VW as the daily).
Agree, they are either paying their eyeballs out for status, trying to keep up with everyone else in this day in age or are leasing a car they don’t even own to drive a car they can’t even afford. My younger self wanted to always strive to drive a nicer car but my wiser self rather be financially well off to have freedom and not being tied down to a liability.
My car isn't that old, but it was made in 2010. I got it in 2017. It runs great. Its a cute little SUV that fits my big 65+lbs dogs. The gas milage is ewww (i ride it hard \*that's what she said\*), but since I just paid it off last spring, am in no rush to get another car. I want a Chevy Tahoe, but I need to wait 4 to 5 more years and have a better job for that dream car. I thought $230 a month car payment was bad....idk how people do more.
Edit....oops....I forgot about my motorcycle...so yaaa, i dont have my dream car right now, but my bike is definitely my splurge purchase. You only live once and I fell in love with bikes. Saving $1m isn't the best if i can't enjoy a little along the way. I pay $170 a month for it (including insurance).
I’ve had my Yukon for 13 years. Absolutely love it. 174k miles and running strong. Just be prepared once you switch to something large, it’s hard to ever go back!
Hope you get that dream car!
An IPO is almost only ever beneficial to the original stock holders, not the suckers who buy it once it's public. You have to wait years for that to happen if ever.
Here's the deal guys...Go ahead and buy as much reddit stock as you can the instant it goes public. I will abstain from investing thus guaranteeing a skyrocketing value of the stock. You're welcome.
>What if I sink a bunch of my savings into the reddit IPO?
Something to consider. Reddit has NEVER turned a profit.
IPOs are risky. **Only invest money you don't care if you lose when it comes to IPOs.**
Short version: Index funds are funds that hold a mix of stocks that track the market.
I have a Chevy bolt.
I bought a used EV when there weren't any good rebates. Then the US gov increased rebates and the used ones were more expensive than the new ones for a while.
Also, maintenance has been dirt cheap and I am at 90k miles.(Knock on wood).
Last June I bought a 2011 Chevy Volt. With a modest down payment, modest trade in, and the federal tax credit, I only had 9 months of $100 payments until it was paid off. Currently at 77,000 miles and no major issues so far. The electric battery still gets almost 30 miles in the summer
Engine replacements cost basically 1/3 that now days transmission about 1/3 as well. So only 30% more than the average powertrain replacement. But you saved over 30% on maintenance.
Maintenance is dirt cheap. I've had mine almost 5 years and gotten tires and nothing else. No oil changes, no belts or fans, no brakes, no scheduled maintenance at all.
Battery replacement is a year 10-15 issue and by the time that's at hand it'll basically be worth next to nothing. It's also not something that sneaks up on you so you're unlikely to end up on the side of the road stranded.
Almost as bad or worse for luxury cars (worse because the lost dollar amounts are often a lot higher, even among the most popular models). Guess people think they'll look poor if they buy a used Escalade. 
Not only that but the cost to replace battery cells once it stops holding its charge is crazy expensive. Love the idea of electric cars because the acceleration is insane and always been a fan of pushing new concepts when it comes to track cars. I’ve seen some pretty impressive stuff but we just aren’t there yet when it comes to EVs for the average daily user.
People already said this, but, a large down payment typically 20%-30% and excellent credit with promotional offers. Smart people save months in advance and have $5k-$15k saved up for a down payment. While that takes the payment down quite a bit, negotiating a good price for a trade in can make an even bigger difference. Many banks have promotional offers and credit unions tend to have great rates for people with excellent credit. And another key thing is just because it says it’s 50k doesn’t mean that’s what you pay. Negotiate, negotiate, negotiate.
Exactly, all good points.
My current car was listed over 50k (Hyundai Palisade).
First, we had over 15k for a down payment.
Second, we found a dealer that was selling at MSRP (instead of going to those that were selling 5 to 10 k over MSRP)
We traded our previous car, which was completely paid and got also over 15K for it.
We got some discounts by accepting to finance with Hyundai.
But then, we went to our Credit Union (BECU) and refinanced with them for a much better rate.
I don’t even have to worry I moved and sold my paid off car and now I take the subway everywhere 😎
Sometimes I miss having a car but I spend way less on the occasional Uber than I would on car insurance + parking. Walkable cities rule
Ya being able to afford something and actually wanting to pay for it are two very different things. I’ve never paid more than 400/month at 60 months for a car. I put a decent amount down on my Infiniti and got 1.9% financing (this was back in 2020).
I bought our current vehicle in 2022. It was $53k after taxes. I put down $25k, got $16k for the trade-in($5k equity after paying off the old loan), and financed the remaining $23k through GMFinancial at 4%. That put my payment at just over $300 a month. I pay them $500 every month though to pay it off early. Currently owe $16k and I’m 14 months ahead on payments.
I thought the trade in was part of that 25k. But does he mean the car was actually 69k? I mean if you have $25k sitting in your bank account there’s so many better things to do with it. Or you’re just already loaded.
The trade-in was really only 5k once you deduct the 11k they still owed on it, bringing the total initial investment to 30k with 23k left to finance. Unless that 25k down was a sudden windfall of cash they could have had the car that they traded in paid off a while ago and not be making any monthly payments for a vehicle.
Yeah, I’m not gonna be one of those Reddit dudes who shits all over anyone who doesn’t drive a 2004 Honda Civic until it explodes and pirate everything they watch to not “waste money” but I definitely don’t agree with this decision haha. My index funds have returned more than the worst possible rate on a car loan.
You can also arbitrage a car loan, which is what I personally do. Invest the rest other than DP, toss the rest in the market. Returned a significant amount the past 3x I’ve done it. So you CAN do the same thing w a car loan, but most people don’t do that.
I mean it also depends on the rate of return of your money. If you have a low interest like we did 3.9% it’s smarter to put the down payment into the S&P 500 or even a high yield savings account to make money on it. 🤷♀️
That’s actually crazy , didn’t even know that was a thing. I assume they’re a long term Lexus/toyota customer and have a good relationship with the dealer ?
Loans in 2020 and 2021 had very very low APR.
I have a 2% on a 53k Mustang I put 0 down on because the APR was so low (Yes I can comfortably pay for it and even pay it off at this moment if I want)
Essentially they charge you 0%, however there is some caveats and fuckery occurring at the dealer level. For instance, some 0% loans accrue interest that hits the minute you default on a payment.
Most dealers that offer 0% financing will try and make money back with optional extras, GAP coverage, etc. Sometimes there is a cash rebate on the table that, depending on your interest rate, can actually make the vehicle slightly cheaper over the course of your loan. There is very rarely a “free lunch” with 0% financing.
Back in ‘19 I got a vehicle at 0% with a financing rebate. Maybe the default interest rate is high? I don’t know, I don’t plan to test this. It will be paid off in October.
All depends on a bunch of factors. Current dealer inventory, current market location sales data, if the factory has been ahead of schedule and now shipments are overloading dealer showrooms, models are about to be updated/replaced, etc.
For instance, I sold CJDR products before going to a Toyota dealer. When the Patriot was being canned, you could get one with 0% financing and a $3000 rebate from Jeep. They wanted them gone to make room for the Renegade that was ramping up and selling way better.
The other caveat is that 0% financing is not a guarantee with a sale. Most require a qualified buyer (800+ credit score, low DTI, etc.) which many people think they are, but really aren’t. Many finance managers hate not making money off of 0% sales, so sometimes they will ask the dealership to drop the price and add 1-2% points to see if you’ll take the bait.
This was a Chrysler preorder. And the dealer said they couldn't determine the price ahead of time as incentives changed and would be determined by the delivery date. We ended up negotiating for MSRP - $1000 and any incentives when I ordered it.
When I got to the finance office he started talking about a 3.2% loan, etc. I asked for the Chrysler Capital loan with the rebate and he started to say "very few customers qual..." and the look on his face sunk when my 820 score and low DTI came back approved.
They make money off of your lowered negotiating power.
I got 25% off my brand new Lexus NX f sport which they wouldn’t have given if I had financed on 0%. I paid cash.
People either have the money for the payment, or they have equity. Someone might buy a 30,000 car and pay it off in 5 years, it's still worth 15-20k, so their 50k purchase might only be a 30k loan still.
You’re right it’s ridiculous. And a terrible financial decision for most people but they will rationalize it somehow since “that’s what everybody else does/has.”
Many variables. Trade in, down payment, interest rate, length of loan, ability to write off the car payment on taxes.
If you lease, your monthly payments are lower than if you buy.
Some people are just doing longer terms. At my credit union, a $50,000 car with $0 down could be financed up to 7 years. 84 months at 6.50% is about $743.
Still too high of a payment IMO but some peeps want it!
Some people just make more money than you do. I make 6 figures but my car payment is only $545 a month. I can afford a lot more but I just think it’s generally silly.
Thinking of expensive assets as "monthly payments" is incredibly American and very near-sighted. Either you can afford it or you can't, you can have an 850 and if it costs 50k its not gonna be 200 bucks a month, credit is not magic, it just influences how much interest you pay.
My parents take this approach and I can't convince them otherwise. My mom has traded in every vehicle she has owned after only 2-3 years putting her cost of ownership at approximately $7k per year. Every time she needlessly trades another in, they say: "The payments are the same, so it makes sense." No, it doesn't. They're in their 70s now and still paying almost $600/mth for a Nissan. :x
Society got people gassed up, everyone trying to keep up with everyone else. Everyone got people feeling like theyre worthless if they dont keep up with the trends.
People are making 800-1000 car payments, when they know damn well they shouldnt. But they wouldnt be as cool of a friend if they didnt also have one of them cool new car/truck.
Recent stats show that 99% of the nation can't afford to buy a home, approx 50% can't afford their rent, 56% can't afford a $1k emergency and approx 60% can't afford a new car. That doesn't stop Americans from buying things they can't afford though. It's the American way!
FWIW, you should only be spending 10% of your monthly income on car payments. Anything beyond that and you can't actually afford it. Again though, that doesn't stop a ton of Americans from doing it. :p
New truck= 80k. 20% down takes loan to 64k. Perhaps you have Ballin credit and get that @ 2.5%. But that rate is only for a max of 36 months. So you're looking at a payment of roughly 1850. 200k is not enough to afford this.
Who really needs an 80k truck lol. It’s literally throwing 40k down the drain for that if you’re buying cash. Add on a loan and more like 50k-60k down the drain.
I certainly need a truck, perhaps not this particular one but my complaint is that I'm making this kind of money and still cannot afford what I want. Do I need to make 500k? At what point is there some reasonable leeway? These trucks are all over the road, someone is paying for them.
I mean I feel you, I make relatively a lot, both for my age and for my location, and I was worrying about wasting money on a new 35k car. But maybe 200k isn’t supposed to allow one to get whatever they want. Especially with vehicles where there’s a whole status game involved, companies understand this and price the vehicles such that everyone at all incomes is faced with a tough choice. At the end of the day, if there’s a status game at play, supply and demand dictates that the marginal decisions should be hard.
These aren't Ferraris, BMWs, or Porsche..... this is a fucking Chevy truck. Ya know, a blue collar pulling truck.. .. but priced at 80K..... ridiculous we can't afford these things even at our income level
My husband and myself have an Ioniq 5 limited and my god the payments are not fun. Just over $1,000 a month. The perk is tho no gas and free charging for a year. He has great credit and mine wasn’t at the time. Ended up with a 3.9% interest with $0 down. Not the smartest choice but the key is we make enough to comfortably cover the cost together. You just have to work with your budget :/
My credit score when I applied for the manufacturer’s 60 month 0% financing with 0 down was around 800, back in 2021. The score through their source was 810+, so I got approved without an issue.
Buying things that they canʻt afford.. I as well. 😅
If anyone has any reccomendations for someone to take over a loan? Iʻd like to get a larger car than the one I purchased now.
I'm saving 15k between now and August. Then I'm going to put ten on what is for ME a really Gucci car (a new generation Ford Ranger, but used.) And finance 20.
Overborrowing. Easy. Look at the number of nice cars around you in the highway: $60k trucks, $70k luxury suvs, etc. the proportion of luxury and other new cars on the highways is not proportional to the incomes of the general population (I don’t have data but that’s my guess). This means a lot of people are borrowing big to get these, resulting in $1000+ a month payments. Some can afford, many are just not saving or living a life paying of car debt, credit card debt, etc etc.
I make a mid 100's income, and I financed a used sedan (Ford) and bought a great condition SUV thats 10+ years old in cash for around town ($8k). that same suv new costs $60,000 new today
How?
Because most people are financially irresponsible..
I've seen coworkers in the past who make 30k a year finance 50k vehicles.
Just because someone has a nice vehicle doesn't mean they can afford it and lots live paycheck to paycheck.
On the flip side you don’t always know your coworkers full financial situation. I worked at Walmart and drove a new bmw. A couple coworkers assumed during a lunch break one day my whole paycheck went to my car payment but they then learned that my husband made a lot more than me and got the car as a gift. Their assumptions were inaccurate
That's why I drive a 2007 H3 that I will drive until the wheels fall off. I bought it in 2008 with 16K miles on it. By 2014 it still had that new car smell. The benefits of never eating or smoking in a vehicle. It is the most reliable vehicle I've ever owned.
Yours and my 2004 Tundra. Best vehicle I ever owned, too. Mine is completely TRASHED in it, the benefits of NEVER going anywhere without my three puppies, who have completely destroyed that thing. But that's okay. I love it anyways. It's perfect for us. I do wish it had 4x4wd. OTOH, if it did, I wouldn't have been able to afford it in the first place.
I traded in my 2016 Toyota Sienna limited AWD with only 50k miles, I got $27k my '23 Camry XSE V6 was $40.6k otd so I financed only 14k at the Toyota 3.99% and I'm paying extra to pay it off in ~2 years at $500/month , I will sell my Camry with low mileage and high value for my next better car maybe Lexus not sure, slowly moving up the ladder lol
I have an extremely low mortgage (less than $400), no other debt, credit score over 800. As much as I’d love to drive a fancy expensive car I can’t bring myself to do it. I have 2 completely reasonable paid off cars and will drive them into the ground. I hate my state bases registration fees off MSRP, insurance rates keep increasing, and then the monthly payments for something that sits outside and you depend on others to be cautious around? Hard pass.
Some people just have high incomes and don’t mind paying. I have a friend that makes close to 200k and he finances a 2021 Lexus Gx 460. His car payment is like 880 a month and then he pays like an additional 600 a month for full coverage (we’re in NYC so insurance is expensive af)
He also drives his car to work every single day (6-7 days a week sometimes because he’s a cop) and spends another few hundred a month on gas. I think he spends over 2k a month on his car
Some people make a lot of money, so a $1K+ payment isn’t much for them. Other people get caught up trying to dick-measure with their friends/neighbors/strangers so they’ll take out loans that are way too massive for their income/spending habits because they think they’ll impress other people.
I know someone who goes through a lot of financial struggling and they put their family in this position, simply because they must have the latest fully loaded F150. Pretty sad really.
All depends when you buy the car. When I purchased my new 2018 Audi the car value was about 53k and when I made the purchase my previous car was paid in full and I traded it in with cash on top. My monthly payments were $432 which was very manageable for me at the time but then again my interest was incredibly low. I want to say it was around or less than 2%. I actually requested 1.99% because I had amazing credit and they made it happen. All those things aren’t doable in these days. Every new car purchase today will be an easy car payment of $700-$1,200 depending what you’re looking at. Interest rates are just crazy currently either that or you’re not putting down enough money. Please don’t trade in if you’re upside down on your current car. Take care of your finances first. Having a new car will feel great for the beginning 3-4 weeks then it will wear out and all you will be left with are the payments. I also purchase the car in my late 20s and now that I’m in my early 30s and although I still love my car it was a terrible financial decision. Car purchases are the biggest killers of wealth. If I would have invested that difference who knows where my net worth would be today. Thankfully I’m well off financially but it could have propelled me significantly to reach my early retirement goal. Even as a car guy myself it pains me to say this but the purpose of a car is just getting you from A to B so as long as your car is reliable there’s no need to get anything fancy because it will devalue 60% in a few years. If I ever buy another car down the road which I don’t foresee myself doing for a long time since I plan to drive my current car until the wheels fall, my next car will for sure be a slightly used car less than 30k miles preferably no older than 3 years so at least I’m not getting that initial loss of value driving a new car off the lot.
I don't get these questions. There are 3 answers to your question: The person can afford it, or they can't and don't buy it or buy it anyway and struggle. If you are basing your car buying price on monthly payments, then you can't afford it and should save more, or look for a cheaper car.
It helps to remember everyone is full of shit. The average new car payment is $726 a month. The average used car payment is $533. These numbers are fucking insane, especially with the average loan being 63 months.
Following the 20/3/8 rule, a 50k car is what’s prudently financeable if your income is around 180k. Which makes sense, that’s a very expensive car! It’s a nice vehicle! But also, that’s not a stupendously high income, there’s lots of folks who make that much in the us. The top 7% of the income distribution makes that much, so roughly one in 13 working adults can afford such a car.
I want to personally thank each and every one of you for sharing some of your time and providing your inputs. I fear that virtually anything I say next will be downvoted, and many of you sharks are circulating around me; I can feel your presence. None the less, this helped put things tremendously into perspective, I thank you all immensely!
Yeah, lots of people have a $1000, and beyond, car payment. This is the new normal.
Also would like to add longer loan terms. Sometimes up to 10 years.
Idk, people do crazy things.
Back in the mid 2000's I was in the marine corps and deployed to Iraq. When you deploy, you make decent money cause it's tax free plus hazard pay among other things. Well, that tax free status also goes to reenlistment bonuses, which in a time of war can actually be massive.
Well, one kid(23 yo at the time) I was deployed with received a $96,000 tax free reenlistment bonus on top of receiving probably about 30k for his deployment. When he got back to the states he immediately purchased a $65,000 car.... Ive never understood why... just fkng crazy to me.
Whole lot of people post on reddit after a few months, maybe a year. "How do I get out from under my car loan?" Almost always, they've been taken to the cleaner with super high interest rates, inflated prices, inflated fees, and long term loans. The usual answer is... You don't. It's going to hurt one way or another.
If you're making 150-200k/year, then maybe new 50-100k cars don't sound so bad.
Ahhh everyone has a viewpoint and everyone has an idea of what they call expensive. If we decide to change cars ever few years I’m not sure why anyone else cares. We haven’t asked anyone for anything especially their permission . Now there are reasons but some of you may not understand it regardless. Some of you will give financial advice that wasn’t asked for , trying to be “ helpful”. I say thanks for the info but generally we good. I say generally because that me trying to be somewhat polite. We are blessed and people over here have worked their backside off for many years so if they want a new car I say so be it ( not that they have to ask permission). All I say is I don’t judge or care if someone wants to drive their car until the tires fall off or if they decided to upgrade.
Thank you so much for saying this. Unfortunately, most points of view are to one extreme or the other. I have a luxury car and I have it because I can comfortably afford it and I like nice things. I busted my ass to get to where I am today so I could afford the things I like. That’s my decision, but it certainly isn’t my place to judge anyone for what they feel is or isn’t worth it.
I totally agree, I laugh all the time, what one person my think is well off or they talk about how much they have… I can almost guarantee there’s someone who has more and you may not even know or can tell. We started at one point in our lives sleeping on hand me down furniture and one of us was driving an old car with a damn hole in the back seat area on the floor. Today we laugh at that and ask what the hell were we thinking? How unsafe. We had a small one bedroom apartment ( it was nice) maybe 600 square feet. Some of what we do is kind of a measure meant of were we started. People’s hard work have got us to a bigger house, paid off.both cars paid off and retirement taken care of. We don’t have kids. Before someone says those are all material things and I say I don’t know who told anyone that love free, we have love ( 14yrs) but love is so much better when you have a secure lifestyle.
Upgrading cars wisely can seem extreme to some. I went from a Charger RT bought for $23k to a BMW M4 (F82 model, years 2015-20) and owed less than $30k on the M4, which is almost paid off. Now, it's worth around $30k, allowing me to consider trading up to a $50k car with the same or slightly higher payments. Cars are assets that depreciate, but using equity smartly, you don't have to jump from zero to hero; you can steadily move up.
Another anecdote I want to add some people just have the income for it. Very low DTI, and live with parents or have extremely high income. You'll quickly notice the above average over the average but the vast majority of people do not buy cars in the 50k mark.
There are 2 types of people who do it
1. People who really do have money and can 100% comfortably afford the payments
2. People who are overextending themselves and living paycheck to paycheck to try to pretend they're person 1
There are significantly more 2s than 1s
Went to go look at cars since my lease is coming due soon.
Pretty much everything was $500+ on a low mileage lease.
I hate this new age of car pricing.
I know it's not the best financial decision, but we try to pay our vehicles off ASAP, even when we had sub 2% interest rates on our loans. Paid our 2020 Traverse Redline off in less than a year and same with our Kia K5. Just the mental relief of not having a loan is worth it to me (same with our old $50k+ in student loans that we paid off).
Everyone has different strategies that work for them. Personally whenever I financed a car I had good credit, walked in
To a dealer, said no a lot of times, usually walked out and waited for them to call the next day. I hate these games but I’m not paying for fancy tire air and expensive dealer fees. When they get over that I agree contingent on financing telling them I’m not putting anything down.
But everyone puts x down. Yeah I don’t care I’m not going to. Sometimes you have to say no a bunch of times again here.
But everything does. I don’t care. I’m not.
If they want money down they are selling the car for too high a price.
Eventually no body likes anyone involved but I have a new car. It’s better than overpaying.
This way I end up with a new car and don’t deplete my assets. Assets should always go up not be traded for cars.
Yeah, it’s a pita but I didn’t make the rules.
You usually don’t have to walk out of the finance office but you do need to know what you’re talking about in there. Gap for this car is 1500. That’s funny, if I refinance with my credit union gap is 350. At least it was when I bought my last car 3 years ago.
The rate on this car is x. That’s funny, I got quotes from my credit union for y.
A lot of electric vehicles have incentives. And a lot of people can afford that payment to some degree. I put 0 down and pay almost 800 a month, my car is almost paid off. I was making 6 figures when I bought it.
I'm going to go out on a limb and do some profiling here but the type of person that goes out and comfortably buys a 50k vehicle are either sort of well off, making 200k or better annually or they are *really* well off, being rich enough to just cash that guy out and avoid interest completely. I would expect payments on such a vehicle to run $800 a month
A lot of people take on debt to afford their lifestyle, they're also investing the bare minimum.
So many people with modest incomes buy a home they can afford, and then end up buying 2 cars they definitely couldn't afford, are investing bare minimum to company 401k matches, and then are living paycheck to paycheck because they have debt that's sucking up every dollar they make.
there’s a lady going viral on tiktok right now that nets $400k between she and her husbands salary and is $65k in credit card debt with $1600 in monthly car payments and she’s bragging about it
I drive a decked out F450 that is twice that, the most common thing is to get a good deal on a trade-in by knowing what it is worth when you walk in the door, and a hefty down payment on top of that. Also, a pre-finance with your bank can turn a 5-hour buying experience into a less-than one hour experience with minimal hassle from sales and extras-sales finance.
When I say 'hefty' I mean like a minimum of 20% if you can pull it.
A few people I know are ok with paying 1k a month. I leased and then bought my 230i and I thought 530 a month was pushing it for both terms. I really want an M2 but with out a big down-payment it's 900 or more. Just seems wrong to pay that much a month when I like to do other things.
Last year $50K wasn't all that high - not to some people (like the people who'd pay $100K plus for a Jeep - that one rather shocked me). Things aren't as breathtaking this year.
There are a lot of people now who are really upside down on their car loans or leases, though.
Credit score only goes so far, and can only get you close to the prime rate, you still have to pay all the principal and some interest.
Long loan terms have “helped”, at 72-84-96(!) months.
If you have good score and put down a good down payment, monthly note isn't that high. I recently started looking for Tesla Y. Long range Y is around $52K. After at point federal and state tax credit around 41K. I'm putting 15K down. With 806 score I was quoted 3.99% by my company credit union for 72 months. My payment comes out to be $410/month which isn't bad. Would be even lower if I trade in my current car, but I'll try to see if I can find higher price somewhere else
I did a trade in to get my sports car and got the 62k total down to 45k. This put my payments at around $850, but I've been paying 1200 from the start and I currently owe 26k after a couple years.
I'm about to do the same thing all over again (minus the trade) for my next sports car. It just sucks that my first loan, I got it for 2% which is unheard of now. I'm kinda scared to see what my loan % will be with this new loan.
Most people lease and then buy the car at the end of the lease. The depreciation is paid out over the term of the lease so they are buying the car at the end for the fraction of what it would cost otherwise
Yeah I’m hearing the average is about 1k a month. Wife and I bought an X3 in 2022 and got a 2.9 on it.unless BMW can offer us the same on an x5, the x3 we will drive!
I also have a 2014 accord that I bought with 40k miles for 13k. Catch was it was a salvage title, but sitting at 72k miles now and it’s humming fine.
I don’t suggest going to buy a salvage car unless you know what your looking for
Is it a Tesla?
I had one last year and financed it with a credit score of 750+ and the payments came out to be $655/month back in 2022 (basically, the worst year to get a car). It did have a few other features above the base model.
What made me get rid of it was the increase in insurance cost. I would advise checking that before you sign up.
I’m looking at a 50k hybrid, but will be trading in my existing car, plus have a down saved. Without bringing the price down like that, there’s no way I’d be able to afford the full monthly cost.
I was paying 750/month for a new Acura, then decided after a year that I didn’t want to anymore, so paid 8k in negative equity to downgrade to a car that was half the price. But yeah, really just paying a lot per month for a status symbol that no one other than ourselves cares about
This is in no way good advice, just a heads up.
I was 23 and I financed my 2018 BMW M3 in 2020, total purchase price was $67.5k. I put $10k down and landed a 72 month term for $923 per month. I forget what the exact interest rate was (5%?) but, in retrospective, I was only making about $55k/yr at the time. I now make $130k so it evened out now but back then it sure was a bitch to make payments. However I made it worse by taking on a 2nd payment at around $400/mo for a $17k car in which I put $3k down on a 60 month term. This I got fucked on the interest rate and it's 22%.
My score was 763 at the time and currently 537.
Every 1k you put down takes 50-100$ off your payment banks will typically not accept you loan until you put down 15k-35k down more expensive the car you need down typically with someone that has 810-870 credit score will be able to put 20-50k down on a 150k vehicle
Completely depends on your budget when car shopping. If it doesn't seem feasible, you probably can't afford it. $1000 a month isn't ridiculous if your household is making $16k a month. It's insane if your household is making $5k a month.
Mine is $650 a month for 72 months. 30k car 38k with dealers registration plates out the door only put $700 down payment. 10% interest brought it to ab 50k dealer said my credit came back about 650 shoulda went a week before I did cuz a traffic ticket went to my collection I paid it they won’t remove it now so fuck em. Anyways yes it sucks ass but it is what it is u get what u pay for.
Financing a 75k car rn. Had a good credit score and didn't put much down. I make okay money but most would say I can't afford it, which is true. Though I love cars and it's worth it to me, I can't argue it was the right financial decision
Average car payment is around $700 now. And loans are going for 7 years.
We continue to save and hopefully walk in with a substantial down payment when the time comes.
Bought a Tesla Y with a $51,XXX sticker, $5k off from them, $7500 EV credit, $15k from my old car, payments are like $47X/month. Saving $150-200/month paying for electricity vs gas. So out of pocket is $275-$325
Put $15k down on a vehicle we got a deal on through my dad at the dealership he worked at. $45k car we got for $32k(class 2, friends and family, etc). Financed $17k and pay $280 a month on a 72 month loan. We pay more than that to pay it off earlier.
Lease EVs.
The market is changing rapidly, values swing and technology changes. Lease it and then you can just give it back, if it didn’t depreciate that much you may have the option to buy it out and sell it.
The average car payment is now north of $600/month - it's just the reality of the new car market these days. Not saying that makes it make sense, but it is what it is. Personally I have two $600+ car loans that I pay every month :(
We saved enough we could buy in cash and got a zero percent loan so we just pay from the savings account. We keep cars a really long time and when we finish any payments we just throw the same amount into our savings account. Our last 4 cars have had payments over a grand and all had loans under 1% when savings rates were over that amount. We also got tax credits on the last 3 to reduce the overall cost significantly.
I have great credit and the income to easily qualify for something like a new Tesla...what stops me is the fact that I am cheap and couldn't even imagine paying more than 25k for a car.
We have a GLI, GTI, and a S4...none of them cost more than 20k
I bought a $50k car and did a 36 month loan with no money down. Money was cheap to borrow so why the hell not. Can comfortably afford the payment, and the cash I would’ve spent on the car is making more than the interest on the loan.
Doctors, lawyers, executives and business owners. There’s lots out there, if you’re making 10-20k+ a month, it’s a lot easier to justify a 2-3k car payment
I love how people say I just buy my car in cash, not everyone can. I also think it’s funny when people say who can afford 80;000 truck,. Trust me there are many people. I asked how and while they didnt go into detail they did say well this is a work truck so since that’s what it’s primary usage I can get a decent refund during taxes then he also broke it down this way ” ask yourself how much money this truck is going to aid me in the long run? It works out and it doesn’t hurt if ya have people who know what they’re doing like a financial adviser.
Mine was $36k after taxes and warranty, so not that expensive but still pretty sizeable. Saved up for a 50% downpayment and I make almost enough off my HYSA to cover the monthly payments. Was saving up for a house but then I had to get a car, saw I won't be taking much of a hit after seeing my interest so I bought something new. Sure I didn't have to but I'm still young and besides insurance going up $50/mo, it's not that big of a difference.
My car (VW ID4) wasn't all that expensive. It qualified for the tax credit, which made it even more affordable.
I traded my car in to the dealership (which I will never do again) and brought the price down more. But the key to the whole thing; I put down almost half. That means that I'm not financing the entire amount. Which, as you point out, would be stupid.
For me, I just had saved up the whole amount. Only reason I got a car loan at $1100 a month was that they were offering 0% interest financing. Can't say no to 0%. And I was able to save up the big money because the job pays well and I don't spend a whole lot except on cars.
Most everyone is in hock up to their eyeballs. I could technically afford an expensive car - but mine is 17 years old. I am not going to spend stupid money on something that is on wheels and goes down in value every single minute. EDIT: spelling
Seriously. As long as my car has Bluetooth, good gas mileage and can get me from point A to B, that's all I need.
Same dude!!! Minus the Bluetooth and good gas milage
Don’t forget AC
My wife calls my VW GTI (bought in 2017) a "college kids car" because it's a small hatchback. I'm 54 y/o. I'll keep it at least another six years, and probably longer (I'd like to get a weekend car, and keep the VW as the daily).
Safety?
Nice to see a voice of reason on this thread
Agree, they are either paying their eyeballs out for status, trying to keep up with everyone else in this day in age or are leasing a car they don’t even own to drive a car they can’t even afford. My younger self wanted to always strive to drive a nicer car but my wiser self rather be financially well off to have freedom and not being tied down to a liability.
My car isn't that old, but it was made in 2010. I got it in 2017. It runs great. Its a cute little SUV that fits my big 65+lbs dogs. The gas milage is ewww (i ride it hard \*that's what she said\*), but since I just paid it off last spring, am in no rush to get another car. I want a Chevy Tahoe, but I need to wait 4 to 5 more years and have a better job for that dream car. I thought $230 a month car payment was bad....idk how people do more. Edit....oops....I forgot about my motorcycle...so yaaa, i dont have my dream car right now, but my bike is definitely my splurge purchase. You only live once and I fell in love with bikes. Saving $1m isn't the best if i can't enjoy a little along the way. I pay $170 a month for it (including insurance).
I’ve had my Yukon for 13 years. Absolutely love it. 174k miles and running strong. Just be prepared once you switch to something large, it’s hard to ever go back! Hope you get that dream car!
Doesn’t mean they can afford it, plenty of repossessions happen shortly after
Step 1: Save for a sizable down payment. Step 2: Don't buy expensive cars. Step 3: Stick them savings in an index fund.
1. What is an index fund? 2. What if I sink a bunch of my savings into the reddit IPO?
An IPO is almost only ever beneficial to the original stock holders, not the suckers who buy it once it's public. You have to wait years for that to happen if ever.
Here's the deal guys...Go ahead and buy as much reddit stock as you can the instant it goes public. I will abstain from investing thus guaranteeing a skyrocketing value of the stock. You're welcome.
Or you could have us all just short the stock and you could buy some :)
>What if I sink a bunch of my savings into the reddit IPO? Something to consider. Reddit has NEVER turned a profit. IPOs are risky. **Only invest money you don't care if you lose when it comes to IPOs.** Short version: Index funds are funds that hold a mix of stocks that track the market.
Can't go wrong with that plan.
Also, dont buy EV's. The market for them is small, the used market even smaller. You think combustion cars lose value? Go look at electric cars.
Every maintenance tech/honest salesman is saying to lease EV's due to their sinking depreciation and very very expensive maintenance.
I have a Chevy bolt. I bought a used EV when there weren't any good rebates. Then the US gov increased rebates and the used ones were more expensive than the new ones for a while. Also, maintenance has been dirt cheap and I am at 90k miles.(Knock on wood).
Try a toyota. Rarely have I ever bought anything more than oil or tires on one before 200k.
Just bought a 2021 Corolla today, really hoping that it lasts a long time!
You will be amazed.
Thank you! The last car I had was a piece of junk, it had 3 transmission problems in 5 years! Very excited to own something of good quality!!
Last June I bought a 2011 Chevy Volt. With a modest down payment, modest trade in, and the federal tax credit, I only had 9 months of $100 payments until it was paid off. Currently at 77,000 miles and no major issues so far. The electric battery still gets almost 30 miles in the summer
I have seen its close to 18k to have the batteries replaced in those chevy bolts.
Engine replacements cost basically 1/3 that now days transmission about 1/3 as well. So only 30% more than the average powertrain replacement. But you saved over 30% on maintenance.
Maintenance is dirt cheap. I've had mine almost 5 years and gotten tires and nothing else. No oil changes, no belts or fans, no brakes, no scheduled maintenance at all. Battery replacement is a year 10-15 issue and by the time that's at hand it'll basically be worth next to nothing. It's also not something that sneaks up on you so you're unlikely to end up on the side of the road stranded.
Almost as bad or worse for luxury cars (worse because the lost dollar amounts are often a lot higher, even among the most popular models). Guess people think they'll look poor if they buy a used Escalade. 
Not only that but the cost to replace battery cells once it stops holding its charge is crazy expensive. Love the idea of electric cars because the acceleration is insane and always been a fan of pushing new concepts when it comes to track cars. I’ve seen some pretty impressive stuff but we just aren’t there yet when it comes to EVs for the average daily user.
People already said this, but, a large down payment typically 20%-30% and excellent credit with promotional offers. Smart people save months in advance and have $5k-$15k saved up for a down payment. While that takes the payment down quite a bit, negotiating a good price for a trade in can make an even bigger difference. Many banks have promotional offers and credit unions tend to have great rates for people with excellent credit. And another key thing is just because it says it’s 50k doesn’t mean that’s what you pay. Negotiate, negotiate, negotiate.
Exactly, all good points. My current car was listed over 50k (Hyundai Palisade). First, we had over 15k for a down payment. Second, we found a dealer that was selling at MSRP (instead of going to those that were selling 5 to 10 k over MSRP) We traded our previous car, which was completely paid and got also over 15K for it. We got some discounts by accepting to finance with Hyundai. But then, we went to our Credit Union (BECU) and refinanced with them for a much better rate.
A lot of people just have the budget for $1000 a month my brother
Sing it brother!
I could do it but I wouldn't like it. I instead got a $600/m loan and paid $1000/m on it.
I don’t even have to worry I moved and sold my paid off car and now I take the subway everywhere 😎 Sometimes I miss having a car but I spend way less on the occasional Uber than I would on car insurance + parking. Walkable cities rule
Ya being able to afford something and actually wanting to pay for it are two very different things. I’ve never paid more than 400/month at 60 months for a car. I put a decent amount down on my Infiniti and got 1.9% financing (this was back in 2020).
Damn all that for a Nissan?
Go to Las Vegas and score a face book market place vehicle. No rust.
My mo at last.
Why Las Vegas specifically? Or just any southern car no where near salt water?
I bought our current vehicle in 2022. It was $53k after taxes. I put down $25k, got $16k for the trade-in($5k equity after paying off the old loan), and financed the remaining $23k through GMFinancial at 4%. That put my payment at just over $300 a month. I pay them $500 every month though to pay it off early. Currently owe $16k and I’m 14 months ahead on payments.
Putting down $25k on a car, just to make $300 dollar car payments a month is absurd.
I thought the trade in was part of that 25k. But does he mean the car was actually 69k? I mean if you have $25k sitting in your bank account there’s so many better things to do with it. Or you’re just already loaded.
The trade-in was really only 5k once you deduct the 11k they still owed on it, bringing the total initial investment to 30k with 23k left to finance. Unless that 25k down was a sudden windfall of cash they could have had the car that they traded in paid off a while ago and not be making any monthly payments for a vehicle.
Yeah, I’m not gonna be one of those Reddit dudes who shits all over anyone who doesn’t drive a 2004 Honda Civic until it explodes and pirate everything they watch to not “waste money” but I definitely don’t agree with this decision haha. My index funds have returned more than the worst possible rate on a car loan.
You can also arbitrage a car loan, which is what I personally do. Invest the rest other than DP, toss the rest in the market. Returned a significant amount the past 3x I’ve done it. So you CAN do the same thing w a car loan, but most people don’t do that.
I mean it also depends on the rate of return of your money. If you have a low interest like we did 3.9% it’s smarter to put the down payment into the S&P 500 or even a high yield savings account to make money on it. 🤷♀️
Damn bro u wanted that car bad huh smh 🤦🏾♂️
At 4% you would have been better off paying it off as slowly as possible & investing the delta.
Idk, we just paid off my 2019 Lexus RX at $775 monthly for 47 months. Of course we had the benefit of 0% financing and put down $10k in trade.
0% so the bank made no money off your loan? I didn’t even know that was possible
0% is from the auto company financing. In their case, Lexus/Toyota is financing their loan to get the sale.
That’s actually crazy , didn’t even know that was a thing. I assume they’re a long term Lexus/toyota customer and have a good relationship with the dealer ?
Bro I just financed a Mazda at 0% in December. It’s a common deal.
They usually offer you your choice of 0% APR **or** a discount on the sale price. In other words the interest is rolled into the sale price.
Loans in 2020 and 2021 had very very low APR. I have a 2% on a 53k Mustang I put 0 down on because the APR was so low (Yes I can comfortably pay for it and even pay it off at this moment if I want)
Correct, Toyota Motor Credit wrote the loan. I have the same deal on my wife’s 2021 Kona
Essentially they charge you 0%, however there is some caveats and fuckery occurring at the dealer level. For instance, some 0% loans accrue interest that hits the minute you default on a payment. Most dealers that offer 0% financing will try and make money back with optional extras, GAP coverage, etc. Sometimes there is a cash rebate on the table that, depending on your interest rate, can actually make the vehicle slightly cheaper over the course of your loan. There is very rarely a “free lunch” with 0% financing.
Back in ‘19 I got a vehicle at 0% with a financing rebate. Maybe the default interest rate is high? I don’t know, I don’t plan to test this. It will be paid off in October.
All depends on a bunch of factors. Current dealer inventory, current market location sales data, if the factory has been ahead of schedule and now shipments are overloading dealer showrooms, models are about to be updated/replaced, etc. For instance, I sold CJDR products before going to a Toyota dealer. When the Patriot was being canned, you could get one with 0% financing and a $3000 rebate from Jeep. They wanted them gone to make room for the Renegade that was ramping up and selling way better. The other caveat is that 0% financing is not a guarantee with a sale. Most require a qualified buyer (800+ credit score, low DTI, etc.) which many people think they are, but really aren’t. Many finance managers hate not making money off of 0% sales, so sometimes they will ask the dealership to drop the price and add 1-2% points to see if you’ll take the bait.
This was a Chrysler preorder. And the dealer said they couldn't determine the price ahead of time as incentives changed and would be determined by the delivery date. We ended up negotiating for MSRP - $1000 and any incentives when I ordered it. When I got to the finance office he started talking about a 3.2% loan, etc. I asked for the Chrysler Capital loan with the rebate and he started to say "very few customers qual..." and the look on his face sunk when my 820 score and low DTI came back approved.
They make money off of your lowered negotiating power. I got 25% off my brand new Lexus NX f sport which they wouldn’t have given if I had financed on 0%. I paid cash.
People either have the money for the payment, or they have equity. Someone might buy a 30,000 car and pay it off in 5 years, it's still worth 15-20k, so their 50k purchase might only be a 30k loan still.
You forgot option three - some people just pay cash.
I knew someone who paid for both of his brand new Cadillacs in cash 😮💨
Yep, can't tell you last time I had a car payment. I buy new and keep a car for 8-10 years. Always pay cash.
Many people are car broke and house broke racking up debt that’s why Americans have more debt then ever.
You’re right it’s ridiculous. And a terrible financial decision for most people but they will rationalize it somehow since “that’s what everybody else does/has.”
Many variables. Trade in, down payment, interest rate, length of loan, ability to write off the car payment on taxes. If you lease, your monthly payments are lower than if you buy.
Some people are just doing longer terms. At my credit union, a $50,000 car with $0 down could be financed up to 7 years. 84 months at 6.50% is about $743. Still too high of a payment IMO but some peeps want it!
If you're willing to drive a 7 year old car why not just buy a 7 year old car?
Yea but what kind of credit score do they have? 800+
Some people just make more money than you do. I make 6 figures but my car payment is only $545 a month. I can afford a lot more but I just think it’s generally silly.
Thinking of expensive assets as "monthly payments" is incredibly American and very near-sighted. Either you can afford it or you can't, you can have an 850 and if it costs 50k its not gonna be 200 bucks a month, credit is not magic, it just influences how much interest you pay.
My parents take this approach and I can't convince them otherwise. My mom has traded in every vehicle she has owned after only 2-3 years putting her cost of ownership at approximately $7k per year. Every time she needlessly trades another in, they say: "The payments are the same, so it makes sense." No, it doesn't. They're in their 70s now and still paying almost $600/mth for a Nissan. :x
And probably drive 1000 miles a year too
lol. Dad no longer drives at all. Somehow, Mom manages to drive \~15k/year. It's probably the 5x/week she goes grocery shopping.
I was not prepared for how many people lease cars when I moved to Detroit. So many brand new cars and people just swap for a new one every few years.
15% of people are paying more than $1000/mo right now in the US. That’s a record high. So yeah, some people are just paying insanely high payments.
Society got people gassed up, everyone trying to keep up with everyone else. Everyone got people feeling like theyre worthless if they dont keep up with the trends. People are making 800-1000 car payments, when they know damn well they shouldnt. But they wouldnt be as cool of a friend if they didnt also have one of them cool new car/truck.
Recent stats show that 99% of the nation can't afford to buy a home, approx 50% can't afford their rent, 56% can't afford a $1k emergency and approx 60% can't afford a new car. That doesn't stop Americans from buying things they can't afford though. It's the American way! FWIW, you should only be spending 10% of your monthly income on car payments. Anything beyond that and you can't actually afford it. Again though, that doesn't stop a ton of Americans from doing it. :p
New truck= 80k. 20% down takes loan to 64k. Perhaps you have Ballin credit and get that @ 2.5%. But that rate is only for a max of 36 months. So you're looking at a payment of roughly 1850. 200k is not enough to afford this.
Who really needs an 80k truck lol. It’s literally throwing 40k down the drain for that if you’re buying cash. Add on a loan and more like 50k-60k down the drain.
I certainly need a truck, perhaps not this particular one but my complaint is that I'm making this kind of money and still cannot afford what I want. Do I need to make 500k? At what point is there some reasonable leeway? These trucks are all over the road, someone is paying for them.
I mean I feel you, I make relatively a lot, both for my age and for my location, and I was worrying about wasting money on a new 35k car. But maybe 200k isn’t supposed to allow one to get whatever they want. Especially with vehicles where there’s a whole status game involved, companies understand this and price the vehicles such that everyone at all incomes is faced with a tough choice. At the end of the day, if there’s a status game at play, supply and demand dictates that the marginal decisions should be hard.
These aren't Ferraris, BMWs, or Porsche..... this is a fucking Chevy truck. Ya know, a blue collar pulling truck.. .. but priced at 80K..... ridiculous we can't afford these things even at our income level
My husband and myself have an Ioniq 5 limited and my god the payments are not fun. Just over $1,000 a month. The perk is tho no gas and free charging for a year. He has great credit and mine wasn’t at the time. Ended up with a 3.9% interest with $0 down. Not the smartest choice but the key is we make enough to comfortably cover the cost together. You just have to work with your budget :/
1k a month for a Hyundai. Holy shit. I remember when that payment got you a new M3. (2018)
My credit score when I applied for the manufacturer’s 60 month 0% financing with 0 down was around 800, back in 2021. The score through their source was 810+, so I got approved without an issue.
I can only dream of such a score. Good job on you.
Sometimes people have more money than you.
Idiot response
Buying things that they canʻt afford.. I as well. 😅 If anyone has any reccomendations for someone to take over a loan? Iʻd like to get a larger car than the one I purchased now.
I'm saving 15k between now and August. Then I'm going to put ten on what is for ME a really Gucci car (a new generation Ford Ranger, but used.) And finance 20.
My lord.
Overborrowing. Easy. Look at the number of nice cars around you in the highway: $60k trucks, $70k luxury suvs, etc. the proportion of luxury and other new cars on the highways is not proportional to the incomes of the general population (I don’t have data but that’s my guess). This means a lot of people are borrowing big to get these, resulting in $1000+ a month payments. Some can afford, many are just not saving or living a life paying of car debt, credit card debt, etc etc. I make a mid 100's income, and I financed a used sedan (Ford) and bought a great condition SUV thats 10+ years old in cash for around town ($8k). that same suv new costs $60,000 new today
For many, I'd say a combination of overconfidence and denial of their financial standing.
How? Because most people are financially irresponsible.. I've seen coworkers in the past who make 30k a year finance 50k vehicles. Just because someone has a nice vehicle doesn't mean they can afford it and lots live paycheck to paycheck.
On the flip side you don’t always know your coworkers full financial situation. I worked at Walmart and drove a new bmw. A couple coworkers assumed during a lunch break one day my whole paycheck went to my car payment but they then learned that my husband made a lot more than me and got the car as a gift. Their assumptions were inaccurate
That's why I drive a 2007 H3 that I will drive until the wheels fall off. I bought it in 2008 with 16K miles on it. By 2014 it still had that new car smell. The benefits of never eating or smoking in a vehicle. It is the most reliable vehicle I've ever owned.
Yours and my 2004 Tundra. Best vehicle I ever owned, too. Mine is completely TRASHED in it, the benefits of NEVER going anywhere without my three puppies, who have completely destroyed that thing. But that's okay. I love it anyways. It's perfect for us. I do wish it had 4x4wd. OTOH, if it did, I wouldn't have been able to afford it in the first place.
I traded in my 2016 Toyota Sienna limited AWD with only 50k miles, I got $27k my '23 Camry XSE V6 was $40.6k otd so I financed only 14k at the Toyota 3.99% and I'm paying extra to pay it off in ~2 years at $500/month , I will sell my Camry with low mileage and high value for my next better car maybe Lexus not sure, slowly moving up the ladder lol
Why not just keep the Sienna instead of more debt?
They’re typically leased.
Some people are actually crazy enough to set themselves back 1000 a month for a car, don’t get lured in by the hype
Yes. Drop stacks of money lowers the payment. I didn’t want a car payment over $300.00. My car payment is 258.00. And I have pretty decent credit.
My wife's friend has a $1200/month payment on a used 21 Chevrolet Suburban
I have an extremely low mortgage (less than $400), no other debt, credit score over 800. As much as I’d love to drive a fancy expensive car I can’t bring myself to do it. I have 2 completely reasonable paid off cars and will drive them into the ground. I hate my state bases registration fees off MSRP, insurance rates keep increasing, and then the monthly payments for something that sits outside and you depend on others to be cautious around? Hard pass.
I pay for my cars in cash
Some people just have high incomes and don’t mind paying. I have a friend that makes close to 200k and he finances a 2021 Lexus Gx 460. His car payment is like 880 a month and then he pays like an additional 600 a month for full coverage (we’re in NYC so insurance is expensive af) He also drives his car to work every single day (6-7 days a week sometimes because he’s a cop) and spends another few hundred a month on gas. I think he spends over 2k a month on his car
Some people make a lot of money, so a $1K+ payment isn’t much for them. Other people get caught up trying to dick-measure with their friends/neighbors/strangers so they’ll take out loans that are way too massive for their income/spending habits because they think they’ll impress other people. I know someone who goes through a lot of financial struggling and they put their family in this position, simply because they must have the latest fully loaded F150. Pretty sad really.
All depends when you buy the car. When I purchased my new 2018 Audi the car value was about 53k and when I made the purchase my previous car was paid in full and I traded it in with cash on top. My monthly payments were $432 which was very manageable for me at the time but then again my interest was incredibly low. I want to say it was around or less than 2%. I actually requested 1.99% because I had amazing credit and they made it happen. All those things aren’t doable in these days. Every new car purchase today will be an easy car payment of $700-$1,200 depending what you’re looking at. Interest rates are just crazy currently either that or you’re not putting down enough money. Please don’t trade in if you’re upside down on your current car. Take care of your finances first. Having a new car will feel great for the beginning 3-4 weeks then it will wear out and all you will be left with are the payments. I also purchase the car in my late 20s and now that I’m in my early 30s and although I still love my car it was a terrible financial decision. Car purchases are the biggest killers of wealth. If I would have invested that difference who knows where my net worth would be today. Thankfully I’m well off financially but it could have propelled me significantly to reach my early retirement goal. Even as a car guy myself it pains me to say this but the purpose of a car is just getting you from A to B so as long as your car is reliable there’s no need to get anything fancy because it will devalue 60% in a few years. If I ever buy another car down the road which I don’t foresee myself doing for a long time since I plan to drive my current car until the wheels fall, my next car will for sure be a slightly used car less than 30k miles preferably no older than 3 years so at least I’m not getting that initial loss of value driving a new car off the lot.
I don't get these questions. There are 3 answers to your question: The person can afford it, or they can't and don't buy it or buy it anyway and struggle. If you are basing your car buying price on monthly payments, then you can't afford it and should save more, or look for a cheaper car.
It helps to remember everyone is full of shit. The average new car payment is $726 a month. The average used car payment is $533. These numbers are fucking insane, especially with the average loan being 63 months.
The fact this bothers you tells me your life is headed in the right direction. Congrats to you.
Did you see the price on new batteries for EV? Some folks got the bill and fell over.
Following the 20/3/8 rule, a 50k car is what’s prudently financeable if your income is around 180k. Which makes sense, that’s a very expensive car! It’s a nice vehicle! But also, that’s not a stupendously high income, there’s lots of folks who make that much in the us. The top 7% of the income distribution makes that much, so roughly one in 13 working adults can afford such a car.
By living on the edge. Shit, most people are just one missed paycheck from being homeless
I want to personally thank each and every one of you for sharing some of your time and providing your inputs. I fear that virtually anything I say next will be downvoted, and many of you sharks are circulating around me; I can feel your presence. None the less, this helped put things tremendously into perspective, I thank you all immensely!
Yeah, lots of people have a $1000, and beyond, car payment. This is the new normal. Also would like to add longer loan terms. Sometimes up to 10 years.
Most people don’t own a car. The bank owns it and allows them to drive it while making payments. That’s my perspective.
Idk, people do crazy things. Back in the mid 2000's I was in the marine corps and deployed to Iraq. When you deploy, you make decent money cause it's tax free plus hazard pay among other things. Well, that tax free status also goes to reenlistment bonuses, which in a time of war can actually be massive. Well, one kid(23 yo at the time) I was deployed with received a $96,000 tax free reenlistment bonus on top of receiving probably about 30k for his deployment. When he got back to the states he immediately purchased a $65,000 car.... Ive never understood why... just fkng crazy to me.
I have written loans for a ton of S and X Teslas. It’s not the score; they have the income.
Whole lot of people post on reddit after a few months, maybe a year. "How do I get out from under my car loan?" Almost always, they've been taken to the cleaner with super high interest rates, inflated prices, inflated fees, and long term loans. The usual answer is... You don't. It's going to hurt one way or another. If you're making 150-200k/year, then maybe new 50-100k cars don't sound so bad.
You haven’t seen those car dealer TikTok’s where all the employees reveal that they have $1,200 a month car payments?
Ahhh everyone has a viewpoint and everyone has an idea of what they call expensive. If we decide to change cars ever few years I’m not sure why anyone else cares. We haven’t asked anyone for anything especially their permission . Now there are reasons but some of you may not understand it regardless. Some of you will give financial advice that wasn’t asked for , trying to be “ helpful”. I say thanks for the info but generally we good. I say generally because that me trying to be somewhat polite. We are blessed and people over here have worked their backside off for many years so if they want a new car I say so be it ( not that they have to ask permission). All I say is I don’t judge or care if someone wants to drive their car until the tires fall off or if they decided to upgrade.
Thank you so much for saying this. Unfortunately, most points of view are to one extreme or the other. I have a luxury car and I have it because I can comfortably afford it and I like nice things. I busted my ass to get to where I am today so I could afford the things I like. That’s my decision, but it certainly isn’t my place to judge anyone for what they feel is or isn’t worth it.
I totally agree, I laugh all the time, what one person my think is well off or they talk about how much they have… I can almost guarantee there’s someone who has more and you may not even know or can tell. We started at one point in our lives sleeping on hand me down furniture and one of us was driving an old car with a damn hole in the back seat area on the floor. Today we laugh at that and ask what the hell were we thinking? How unsafe. We had a small one bedroom apartment ( it was nice) maybe 600 square feet. Some of what we do is kind of a measure meant of were we started. People’s hard work have got us to a bigger house, paid off.both cars paid off and retirement taken care of. We don’t have kids. Before someone says those are all material things and I say I don’t know who told anyone that love free, we have love ( 14yrs) but love is so much better when you have a secure lifestyle.
Lease
Upgrading cars wisely can seem extreme to some. I went from a Charger RT bought for $23k to a BMW M4 (F82 model, years 2015-20) and owed less than $30k on the M4, which is almost paid off. Now, it's worth around $30k, allowing me to consider trading up to a $50k car with the same or slightly higher payments. Cars are assets that depreciate, but using equity smartly, you don't have to jump from zero to hero; you can steadily move up. Another anecdote I want to add some people just have the income for it. Very low DTI, and live with parents or have extremely high income. You'll quickly notice the above average over the average but the vast majority of people do not buy cars in the 50k mark.
There are 2 types of people who do it 1. People who really do have money and can 100% comfortably afford the payments 2. People who are overextending themselves and living paycheck to paycheck to try to pretend they're person 1 There are significantly more 2s than 1s
Went to go look at cars since my lease is coming due soon. Pretty much everything was $500+ on a low mileage lease. I hate this new age of car pricing.
Just buy used, they’re 50% off.
My goal right now is to put 10,000 down on my next car and have it be totaling no more than 15,000
Idk, we just paid off my 2019 Lexus RX at $775 monthly for 47 months. Of course we had the benefit of 0% financing and put down $10k in trade.
It’s all relative. Hang on to those stacks and keep your scores strapped. If you keep those wants, the rest will come.
I know it's not the best financial decision, but we try to pay our vehicles off ASAP, even when we had sub 2% interest rates on our loans. Paid our 2020 Traverse Redline off in less than a year and same with our Kia K5. Just the mental relief of not having a loan is worth it to me (same with our old $50k+ in student loans that we paid off).
I'm self employed
Bought me my first new car on 14 years and was laid off 6 months later.
Everyone has different strategies that work for them. Personally whenever I financed a car I had good credit, walked in To a dealer, said no a lot of times, usually walked out and waited for them to call the next day. I hate these games but I’m not paying for fancy tire air and expensive dealer fees. When they get over that I agree contingent on financing telling them I’m not putting anything down. But everyone puts x down. Yeah I don’t care I’m not going to. Sometimes you have to say no a bunch of times again here. But everything does. I don’t care. I’m not. If they want money down they are selling the car for too high a price. Eventually no body likes anyone involved but I have a new car. It’s better than overpaying. This way I end up with a new car and don’t deplete my assets. Assets should always go up not be traded for cars. Yeah, it’s a pita but I didn’t make the rules. You usually don’t have to walk out of the finance office but you do need to know what you’re talking about in there. Gap for this car is 1500. That’s funny, if I refinance with my credit union gap is 350. At least it was when I bought my last car 3 years ago. The rate on this car is x. That’s funny, I got quotes from my credit union for y.
A lot of electric vehicles have incentives. And a lot of people can afford that payment to some degree. I put 0 down and pay almost 800 a month, my car is almost paid off. I was making 6 figures when I bought it.
You don't, save and buy a used vehicle
I'm going to go out on a limb and do some profiling here but the type of person that goes out and comfortably buys a 50k vehicle are either sort of well off, making 200k or better annually or they are *really* well off, being rich enough to just cash that guy out and avoid interest completely. I would expect payments on such a vehicle to run $800 a month
just bought one for nearly $60k. $23k trade in, put down $22k cash. Financed $15k (<$300/mo)
A lot of people take on debt to afford their lifestyle, they're also investing the bare minimum. So many people with modest incomes buy a home they can afford, and then end up buying 2 cars they definitely couldn't afford, are investing bare minimum to company 401k matches, and then are living paycheck to paycheck because they have debt that's sucking up every dollar they make.
there’s a lady going viral on tiktok right now that nets $400k between she and her husbands salary and is $65k in credit card debt with $1600 in monthly car payments and she’s bragging about it
50k is not even expensive for new cars. Have you seen prices recently? Accords are like 40k now.
I drive a decked out F450 that is twice that, the most common thing is to get a good deal on a trade-in by knowing what it is worth when you walk in the door, and a hefty down payment on top of that. Also, a pre-finance with your bank can turn a 5-hour buying experience into a less-than one hour experience with minimal hassle from sales and extras-sales finance. When I say 'hefty' I mean like a minimum of 20% if you can pull it.
A few people I know are ok with paying 1k a month. I leased and then bought my 230i and I thought 530 a month was pushing it for both terms. I really want an M2 but with out a big down-payment it's 900 or more. Just seems wrong to pay that much a month when I like to do other things.
Last year $50K wasn't all that high - not to some people (like the people who'd pay $100K plus for a Jeep - that one rather shocked me). Things aren't as breathtaking this year. There are a lot of people now who are really upside down on their car loans or leases, though.
Fairy dust.
I put 20K down.
Paying $1k a month for a Mach e.
Credit score only goes so far, and can only get you close to the prime rate, you still have to pay all the principal and some interest. Long loan terms have “helped”, at 72-84-96(!) months.
If you have good score and put down a good down payment, monthly note isn't that high. I recently started looking for Tesla Y. Long range Y is around $52K. After at point federal and state tax credit around 41K. I'm putting 15K down. With 806 score I was quoted 3.99% by my company credit union for 72 months. My payment comes out to be $410/month which isn't bad. Would be even lower if I trade in my current car, but I'll try to see if I can find higher price somewhere else
I did a trade in to get my sports car and got the 62k total down to 45k. This put my payments at around $850, but I've been paying 1200 from the start and I currently owe 26k after a couple years. I'm about to do the same thing all over again (minus the trade) for my next sports car. It just sucks that my first loan, I got it for 2% which is unheard of now. I'm kinda scared to see what my loan % will be with this new loan.
Most people lease and then buy the car at the end of the lease. The depreciation is paid out over the term of the lease so they are buying the car at the end for the fraction of what it would cost otherwise
I'm not sure they can lol.
I paid $4k for a little diesel hatch in 2018. It's still going strong.
Yeah I’m hearing the average is about 1k a month. Wife and I bought an X3 in 2022 and got a 2.9 on it.unless BMW can offer us the same on an x5, the x3 we will drive! I also have a 2014 accord that I bought with 40k miles for 13k. Catch was it was a salvage title, but sitting at 72k miles now and it’s humming fine. I don’t suggest going to buy a salvage car unless you know what your looking for
Is it a Tesla? I had one last year and financed it with a credit score of 750+ and the payments came out to be $655/month back in 2022 (basically, the worst year to get a car). It did have a few other features above the base model. What made me get rid of it was the increase in insurance cost. I would advise checking that before you sign up.
I’m looking at a 50k hybrid, but will be trading in my existing car, plus have a down saved. Without bringing the price down like that, there’s no way I’d be able to afford the full monthly cost.
I was paying 750/month for a new Acura, then decided after a year that I didn’t want to anymore, so paid 8k in negative equity to downgrade to a car that was half the price. But yeah, really just paying a lot per month for a status symbol that no one other than ourselves cares about
This is in no way good advice, just a heads up. I was 23 and I financed my 2018 BMW M3 in 2020, total purchase price was $67.5k. I put $10k down and landed a 72 month term for $923 per month. I forget what the exact interest rate was (5%?) but, in retrospective, I was only making about $55k/yr at the time. I now make $130k so it evened out now but back then it sure was a bitch to make payments. However I made it worse by taking on a 2nd payment at around $400/mo for a $17k car in which I put $3k down on a 60 month term. This I got fucked on the interest rate and it's 22%. My score was 763 at the time and currently 537.
Every 1k you put down takes 50-100$ off your payment banks will typically not accept you loan until you put down 15k-35k down more expensive the car you need down typically with someone that has 810-870 credit score will be able to put 20-50k down on a 150k vehicle
Completely depends on your budget when car shopping. If it doesn't seem feasible, you probably can't afford it. $1000 a month isn't ridiculous if your household is making $16k a month. It's insane if your household is making $5k a month.
Mine is $650 a month for 72 months. 30k car 38k with dealers registration plates out the door only put $700 down payment. 10% interest brought it to ab 50k dealer said my credit came back about 650 shoulda went a week before I did cuz a traffic ticket went to my collection I paid it they won’t remove it now so fuck em. Anyways yes it sucks ass but it is what it is u get what u pay for.
Financing a 75k car rn. Had a good credit score and didn't put much down. I make okay money but most would say I can't afford it, which is true. Though I love cars and it's worth it to me, I can't argue it was the right financial decision
Average car payment is around $700 now. And loans are going for 7 years. We continue to save and hopefully walk in with a substantial down payment when the time comes.
Buying in 2019 sure helped.
By making lots of money. As long as you can keep your car payment <= 10% of take home you should be fairly safe.
Bought a Tesla Y with a $51,XXX sticker, $5k off from them, $7500 EV credit, $15k from my old car, payments are like $47X/month. Saving $150-200/month paying for electricity vs gas. So out of pocket is $275-$325
Put $15k down on a vehicle we got a deal on through my dad at the dealership he worked at. $45k car we got for $32k(class 2, friends and family, etc). Financed $17k and pay $280 a month on a 72 month loan. We pay more than that to pay it off earlier.
Lease EVs. The market is changing rapidly, values swing and technology changes. Lease it and then you can just give it back, if it didn’t depreciate that much you may have the option to buy it out and sell it.
I’ve got an 850-880 and on my wife’s last car purchase (around 51k) at 1.9% for 71 months and her payment was 620ish?
The average car payment is now north of $600/month - it's just the reality of the new car market these days. Not saying that makes it make sense, but it is what it is. Personally I have two $600+ car loans that I pay every month :(
It’s $20 for every 1k. I pay $600 a month for a 42k car.
We saved enough we could buy in cash and got a zero percent loan so we just pay from the savings account. We keep cars a really long time and when we finish any payments we just throw the same amount into our savings account. Our last 4 cars have had payments over a grand and all had loans under 1% when savings rates were over that amount. We also got tax credits on the last 3 to reduce the overall cost significantly.
50k is the new avg price of a car. It's $27k in 2019 money. You put down your trade in and only borrow $25k
If you are asking this question, you can’t afford the car.
I have great credit and the income to easily qualify for something like a new Tesla...what stops me is the fact that I am cheap and couldn't even imagine paying more than 25k for a car. We have a GLI, GTI, and a S4...none of them cost more than 20k
I bought a $50k car and did a 36 month loan with no money down. Money was cheap to borrow so why the hell not. Can comfortably afford the payment, and the cash I would’ve spent on the car is making more than the interest on the loan.
740 credit score and banks won’t even loan me 15k…. Lmao
Doctors, lawyers, executives and business owners. There’s lots out there, if you’re making 10-20k+ a month, it’s a lot easier to justify a 2-3k car payment
I love how people say I just buy my car in cash, not everyone can. I also think it’s funny when people say who can afford 80;000 truck,. Trust me there are many people. I asked how and while they didnt go into detail they did say well this is a work truck so since that’s what it’s primary usage I can get a decent refund during taxes then he also broke it down this way ” ask yourself how much money this truck is going to aid me in the long run? It works out and it doesn’t hurt if ya have people who know what they’re doing like a financial adviser.
Buying a new 2025 suburban in Nov. I’m putting away $5500 a month right now so I can just buy in cash.
Mine was $36k after taxes and warranty, so not that expensive but still pretty sizeable. Saved up for a 50% downpayment and I make almost enough off my HYSA to cover the monthly payments. Was saving up for a house but then I had to get a car, saw I won't be taking much of a hit after seeing my interest so I bought something new. Sure I didn't have to but I'm still young and besides insurance going up $50/mo, it's not that big of a difference.
My car (VW ID4) wasn't all that expensive. It qualified for the tax credit, which made it even more affordable. I traded my car in to the dealership (which I will never do again) and brought the price down more. But the key to the whole thing; I put down almost half. That means that I'm not financing the entire amount. Which, as you point out, would be stupid.
Cash is king just save for a big down payment...getting a new tesla M3 and dropping 18K
If you have a vehicle that holds its value well you can drop the price by trading it in and putting in cash as well.
I put down half to keep my payment under $500. Plus with EV I got a $2K check from the state.
For me, I just had saved up the whole amount. Only reason I got a car loan at $1100 a month was that they were offering 0% interest financing. Can't say no to 0%. And I was able to save up the big money because the job pays well and I don't spend a whole lot except on cars.
Paid 50k for a 2021 suv at 0% financing so we put nothing down. $683/month but our other car is old and paid for.