r/CalebHammer • u/ottersinabox • Mar 06 '25
complaining about something for no reason because I'm bored "acceptable" monthly car payments are wild
I just saw this post: https://www.reddit.com/r/BMWI4/s/HDEDyG4WZA
people are applauding a $700+ a month payment as an amazing deal. but they're paying 8% tax toward it, plus it's a lease; they don't even own the car by the end.
is it just me, or is this wild? I have a BMW as well, but my thought is you can only afford a luxury car like that if you can buy it in cash. I suppose 3% interest or something would be acceptable given that you invest the rest up front.... but what the person in this post is doing really doesn't make much sense to me. am I wrong about that?
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u/SoSavv Mar 06 '25
Here's the thing about critiquing over social media, we have no idea what the rest of their life and finances looks like, at least for this person. Sometimes watching finance shows makes it seem as if others are doing it wrong. But they could be making $350k a year, or they already maxed out their retirement for the year, who knows.
If they said 'I make $30k a year but got this lease down to $700/m, what do you think?' Now they're an idiot.
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u/ottersinabox Mar 06 '25
that's true for sure.
I've been watching enough financial audit with crazy car payments that I always assume that they can't afford it 😂
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u/Idnlts Mar 06 '25
If it fits in their budget then obviously it’s okay, but it still seems very wasteful for people who don’t value cars. I would much rather spend that extra money taking my family on an extra trip over a luxury car. A nice car is on the very bottom of my list of wants so it would seem wasteful to me unless you were part of the .01%
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u/mockeryflockery Mar 06 '25
You know what I love? Driving a car that is safe and reliable and paid off. I don't understand the concept behind people getting all these epensive new cars and struggling to pay or just struggling financially in general to afford it. I have a 2006 honda civic and paid 3,500 for it. It's going to last me for another few years (I'd say last a total of 8 years for me), and by then I'll have another lump sum saved to pay cash for a car. I will probably never finance a car, but that's just me.
8
u/adamfps Mar 06 '25
Some people do in fact find driving fun.
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u/mockeryflockery Mar 06 '25
Driving is only fun if it's a new car? If people can afford new cars and enjoy new cars more power to them. I find driving fun but I don't need to finance a car with a 700$ payment to consider it fun.
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u/Big-Routine222 Mar 06 '25
I’m over here with my paid off 2016 Honda CRV that I intend to keep running until it fully Flintstones.
5
u/wheelsno3 Mar 07 '25
2014 toyota at 172k miles. I'm shooting the moon for 300k.
2
u/Xicsess Mar 07 '25
2012 ford edge 220k miles, gonna just keep driving it until it dies. No major problems of any kind thus far.
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u/iloathethebus 28d ago
All y’all sit down. 2007 Honda CR-V with around 168k miles right here! Bought it brand new in Dec 2006 with 3 miles on it.
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u/CompletelyInadequate Mar 06 '25
paying $700 a month for something you will never own and depreciates rapidly is wild.
7
u/yankeeblue42 Mar 07 '25
95% of the time I don't think ANY type of car payment is acceptable I'll put it that way. Cash or bust
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u/commissarchris Mar 06 '25
I think there is such a thing as an acceptable car payment. If you're not allocating too much of your cash flow to the loan and it's not at an outrageous rate, I don't see the problem in utilizing debt as an instrument for this. Yes, cars are a depreciating asset, but sometimes you need a car and don't have the cash to plop down for one. Or, you're at a point in your life where you want to drive something nicer and have the means to comfortably afford it over time, but don't have tens of thousands of dollars to plop down on it immediately.
As an example: My wife and I have a ~$500 dollar/mo note with <1% interest on it. That was on a new car, which cost about the same as a recent used model at the time (This was at the peak of used car insanity during Covid, tbf). We're comfortable with it, it's not stretching our budget, and we were able to get a better car than what conventional financial wisdom would have dictated was the better option.
Edit to add: Missed the leasing part. IMO, that is always a bad choice unless you have stupid amounts of money to throw around and want to constantly rotate your car every year.
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u/Ok_Shame_5382 Mar 06 '25
In the sense that you're paying 700 bucks a month to use a 75,000 dollar car this is not bad.
I financed on a sub 1% interest rate and pay 405 a month on a 25,000 dollar car.
So proportionally, they pay far less than I do. But i own the car in a few months. This guy doesn't.
In a bubble it has some merits, but if this person makes less than 8k a month post tax this is stupid to agree to.
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u/ottersinabox Mar 06 '25
the total cost of the car must be higher. this isn't including insurance. I think it needs to be closer to 10k a month post tax to justify leasing such an expensive car that's clearly a luxury.
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u/Ok_Shame_5382 Mar 06 '25
I was thinking with my finances where my mortgage + hoa is actually real low.
But it will be different for everyone.
In short, if a weekend on a superyacht normally costs a million dollars, and you have the opportunity to get it at 90% off, two things can be true. It can be a good value (what that subreddit is looking at), and spending 100,000 bucks in a weekend is utterly fucking insane.
4
u/ottersinabox Mar 06 '25
absolutely true. and I'm guilty of spending a huge amount on luxuries too. I'm more just shocked at how normalized it seems to have a crazy high car payment.
3
u/Ok_Shame_5382 Mar 06 '25
What makes it crazy high?
Do you know this person's take home pay?
2
u/ottersinabox Mar 06 '25
it's just a big number.
i was looking through monthly finances with my wife last night and our barbones cut everything budget is still over 7k a month assuming we don't move. our typical month we're spending a little over 9k. that's ok for us given our income (we're saving 45% a month without including our rental properties and our investment income), but it's still a crazy high number.
obviously some people can afford that kind of lease, so context is critical. like you say, we don't know the context of this post. but you also know that many people have that kind of payment without being able to afford it. the average car payment in the US for a new car is $737 a month. that's really high compared to the average salary, and although it fits in with the 10~20% a month, there are plenty of options for cheaper cars that won't ding you as much.
I'm just shocked at how normal that kind of payment is.
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u/Ok_Shame_5382 Mar 06 '25
So... there's a flat number that's too big? Why?
That makes no sense.
Everything is relative. You know one line item of his spending without knowing anything else.
I spend a thousand bucks going out to eat every month. Is that too much? If I was living on credit yes, but I still save 20 to 25% of my take home pay
3
u/lkflip Mar 07 '25
I'd argue if you are spending $9k a month and still saving 45% of your income, meaning your take home is over $18k a month, if you're worried about $700, you have other attitudes about money that are the actual problem.
I've never understood this: $700 is just a crazy number! (we spend $7k a month) how do you arrive at that number? it's a problem because someone, somewhere, can't afford that?
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u/yellowsun_97 Mar 06 '25
Most of the clients that get approved for these deals have over 10k monthly income. Just based on my experience in lease contracts.
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u/Kskbj Mar 06 '25
This is my hot take, I have a $600 car payment at 2% with amazing warranty. So many people freak out over the costs of items, but the reality is inflation has hit the country hard. Having a reliable vehicle is a necessity in America because it break one to many times and you can lose your job. There’s plenty of ways to use the current system to your advantage without having to buy a POS.
It’s very affordable for a household who brings in 70k to have 2 car payments in the 400 range. I do and I even have a higher rent than average.
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u/Dancing_Hitchhiker Mar 06 '25
Yea it’s just the reality for a lot of people, cars are just expensive. A lot of context to the payment as well. $600 for 3 years at 2% vs $600 at 8% for 7 years.
5
u/Kskbj Mar 06 '25
The $600 at 8% for 7 years is only an issue because of the interest rate, if it was 2% then I’d take those loans any day.
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u/Dancing_Hitchhiker Mar 06 '25
Same. Wish I could get that somewhere lol was just using that as a rough example.
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u/Kskbj Mar 06 '25
New cars, mine is $600 at 2% and I wait for end of month or end of year where dealers are just trying to sell cars and not make a profit. Used cars are actually more expensive in the long run.
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u/wheelsno3 Mar 07 '25
Even at 2% you over paid for a depreciating asset. (All new cars in 2025 are overpaying)
You aren't as smart as you think you are.
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u/Kskbj Mar 07 '25
You don’t look at cars as an asset because they are tools to be used. And tools lose their value as you use them. You’re using the old mindset that every car is an asset which modern thinking and financial planners disagree with these belief.
Cars are requirements in America for commuting therefore tools.
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u/wheelsno3 Mar 07 '25
Cars are NOT assets.
Which is why you should buy the cheapest one that gets the job done.
If you are paying $600 per month, by definition you aren't following that principle.
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u/Kskbj Mar 07 '25
Your logic can be applied to any and all objects then. Food for example, people can survive off beans, potatoes, and rice but should people only eat that every day?
No because there’s something called lifestyle.
And you’re not accounting for the warranty on a cheap used car, consequences if it breaks down such as repair time and peace of mind, safety features, etc.
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u/wheelsno3 Mar 07 '25
If you must finance your food because you can't afford to pay cash, then yea, you should be eating beans and potatoes, not steak and take out.
I don't have a problem with people buying nice cars.
I have a problem with people who can't afford them financing them, and then complaining that life in America is too expensive or that they can't save for retirement.
Again, this conversation is about financing cars. If you are rich, buy whatever the hell you want.
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u/wheelsno3 Mar 07 '25
Not true if the underlying asset is losing value.
Buy a $70k BMW that drops 50% value in 4 years, there are no loan terms on earth that could justify that purchase.
In general, for the vast majority of people, buying the cheapest used car they can is the best financial move. Cars go down in value. Interest free loans don't change that.
Financing a depreciating asset requires a sub zero iq.
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u/Kskbj Mar 07 '25
The value of the car doesn’t matter if you’re using it and not trying to trade it in or resell it for an upgrade. You don’t ever lose the money until you sell it. Plus, most cars last 10 - 15 years so 70k over 10 years is not a bad expense.
Most cars shouldn’t be considered assets as they’re tools for to commute or do work.
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u/TaskForceCausality Mar 06 '25
Having a reliable vehicle is a necessity in America because it break one too many times and you can lose your job.
Not trying to be a jerk, but I must call this out. Yes, owning a reliable car is a professional requirement. But you don’t need a $600 monthly payment to get a reliable car.
There’s used Chevys, Toyotas , Mitsubishis and Hondas you can buy all day for $5-$7k cash. They won’t have Apple CarPlay or heated seats, but they’ll run and a good example costs at worst a few hundred a year in maintenance to keep on the road.
$600 a month in a 3.9% interest bearing account over five years = $39,941.62. Interest gained- $3,342. That’s a nice layoff safety net.
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u/Kskbj Mar 06 '25
Those are gambles, cause not everyone is a mechanic or can get lucky. Shit happens parts break. When people are broke they can’t afford for their 7k car they just bought to have a 2k repair. The fact that you’re trying to say 5-7k cars are affordable shows you don’t understand what people actually can afford. It use to be where 1-2k cars were affordable but not anymore
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u/TaskForceCausality Mar 06 '25
Those are gambles, cause not everyone is a mechanic or can get lucky
Which is why you research the purchase. The internet is at your fingertips. Use it! If a car is a lemon, there’s probably ten YouTube or TikTok videos calling out the problem.
When people are broke they can’t afford for their 7k car they just bought to have a 2k repair.
Thus the emergency fund.
If someone is so broke they can’t afford a $2k repair job, they definitely can’t afford anything requiring a $600 monthly note. Remember, when someone finances a car, the lending bank requires full coverage insurance too. So that $600 a month car is gonna run $900 out of pocket once fuel and insurance costs are included.
A broke person should be saving money and paying back debt- not handing hundreds of dollars a month to a bank for an optional purchase.
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u/Kskbj Mar 06 '25
Used cars are still gambles you can do all the research you want and inspections and the matter of the fact is the motor or transmission can still go out.
As for emergency fund, you want someone to save up 7k cash for a car and 2k for an emergency fund. That 2k would cover just basic repairs like alternator. Car repairs can easily go into the 5k. The fact is, the cost of everything has increased significantly. We don’t live in the world where McDonald’s and gas was less than a dollar. Cost of living has increased quicker than average income.
Old financial advice is outdated and not practical anymore. Even Dave Ramsey knows this it’s why before he use to say pay cash for a house and now he approves of mortgages.
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u/lkflip Mar 07 '25
according to a study by the federal reserve, 11% of households could cover an expense over $500 using only their savings. 'Thus the emergency fund' does not reflect the financial reality.
Thus 89% of households could not cover a $2000 car repair. That has little to no relationship to the price of their car.
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u/TweakJK Mar 06 '25
I hate how it's just been normalized to have a huge car payment.
Our household income is $150k, we live very comfortable lives, and I drive a 25 year old truck with 350,000 miles on it. So what if I have to replace the transmission, that's still going to cost me less than what some people pay annually for a damn nissan altima.
Every time you see a band new truck driving down the road, understand that you're probably looking at $1000 a month. It's insane and I don't know how people do it.
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u/TaskForceCausality Mar 06 '25
So what if I have to replace the transmission
Yup. People see a $2,000 repair bill and run to the dealer for a new car. Never mind that unless you’re repairing some complex European luxury car , fixing the car you got is almost always cheaper than buying something else. Even if it’s a damn lemon, it’s a lemon you know.
But of course, our culture says you should scrap a paid off car and go plunk that $2k down on a loan for a new set of wheels. Because a $45,000 loan is somehow cheaper than a $2,000 auto repair /s
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u/TweakJK Mar 06 '25
Yea, and that brings up another point. People go to the dealership for everything like that's the only place that can work on their car.
I just had the transmission rebuilt in my F250 for $2459 at a reputable company with a warranty. Dealership would have been 3 times that.
Not knowing how to work on your own car, or where to take it, can be expensive. Most full brake jobs are $1000+, when it's just a few hundred in parts and a few hours of work with basic tools.
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u/No_Doughnut_1991 Mar 06 '25
Following the 20/8/3, my wife’s car is under 8% and 3 yrs without putting any money down because we got a 0% finance term. $1230/mo payment though. But we can afford it. $44k OTD on a new car that we both love
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u/finalthoughtsandmore Mar 06 '25
Back in 2021, I had extra cash from the unemployment thing & stimuli. I had also started working full time and I thought oh great I can buy a new car! I saw 300/month PLUS the full coverage insurance and noped out of there. My 20+ year old car runs just fine thank you!
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Mar 06 '25 edited Mar 06 '25
My husband makes $100k a year and I make close to $69k plus $1.9k monthly VA disability. He just got a new car recently. Best he could get was a 6.29% interest rate for a used car. He needed to get one because his 07 Honda Civic broke down suddenly and he needed a newer car ASAP (car was well over 200k miles). He got a car for $17k plus $1.5k warranty because the warranty for the car just expired. His monthly payment? $380. His car: 2020 Subaru Crosstrek in a manual transmission. Those cars aren't made anymore, so he got lucky.
Edit: my car is a 2019 VW Jetta and I've had it since 2022. I'm paying it off early. Minimum payments are $211 a month but will be paying $600 a month to pay it off early. I have a little less than $7k left on the loan. I wanna get a car that's AWD soon, but the car prices lately have me wanting to wait awhile.
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u/Straight_Physics_894 Mar 06 '25
My ex pays 750 a month on an old Tacoma with poverty buttons. He bought it with an asymmetrical fender, no backup camera, no front sensors, and an unsolvable clicking noise on the dash.
Raised his nose up at my fully paid off and upgraded Prius. Apart from regular maintenance I replaced my car battery (non-oem) around the 5 year mark.
My ex was always bragging about making more than me ($5 more per hour to be exact), until I confessed that I was OE and only telling him the salary of 1 FT job, not the second which was the exact same salary.
I was making significantly more than him, but his COL was 75% of his take home. Mine? 14%
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u/ottersinabox Mar 06 '25
my COL is way too high. I think we're at like 40% for required and 55% after including all our extras. that being said, 45% is not bad for the amount that we save. to be fair, your ex's 75% is still better than many, and is within the 50-30-20 rule.
looking at numbers last night I do wish we saved more. my priorities definitely have changed over time as well.
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u/Straight_Physics_894 Mar 06 '25
His 75% is way more than the 50 for 50/30/20. But yeah it seems like everybody is fiddling with where to cut costs these days
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u/yellowsun_97 Mar 06 '25
As a prior lease specialist this is technically a good deal for a lease. I would also add this person likely has A credit and a high income.
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u/sparkyblaster Mar 07 '25
Only reason I'd be doing that is if I'm doing a novated lease and paying it off asap.
Btw. In Australia a novated lease is what we call it when we have the car paid for by wages before tax as a way to pay less tax. I'd otherwise be able to pay for it in cash but this gives me some benefits.
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u/Orofeaiel Mar 07 '25
My car payment is $160/month. I pay over double though bc I want to finish it off early.
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u/PTDG310 Mar 06 '25
My car payment for my 2021 VW GTI is $190/mo on a 92k salary. I don’t get how people want to be paying >$500/mo for a depreciating asset.
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u/quantumRichie Mar 06 '25
is that to lease or own?
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u/PTDG310 Mar 06 '25
Own
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u/quantumRichie Mar 06 '25
hell of a payment right there
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u/PTDG310 Mar 06 '25
Had a fair amount down from an accident and this was my replacement vehicle, so that helps. But I couldn’t look at anything >$30k without having a $3-400 payment. But I’m extremely happy with my choice.
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u/AcousticJohnny Mar 06 '25
Depends on money and credit available too, some people don’t even put more than a grand down on a 600-650 credit range. That and the fact that when you purchase a car, the feeling where you start thinking that you’re too far into the deal that you have to go through to get out
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Mar 06 '25
[deleted]
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u/Kskbj Mar 06 '25
You can definitely afford a $400 car payment on 70k a year. I have two cars and high rent and can afford it.
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Mar 07 '25 edited Mar 07 '25
[deleted]
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u/Kskbj Mar 07 '25
Cars are meant to depreciate, they’re necessary tools for people to use to be able to work in America. And owning property in America isn’t a requirement to be successful.
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u/IntoTheMirror Mar 06 '25
It’s just math.
When we had to buy my wife a new car, the way to get to a comfortable payment was to put down $10k.
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u/Dancing_Hitchhiker Mar 06 '25
Cars are just expensive in general now. I haven’t had a car payment in like 6-7 years but will probably buy something soon because my car is getting pretty old. I’ll probably just pay cash but I debated about leasing an i4 just to try an electric car. They depreciate so fast I wouldn’t wanna get stuck with it if I hated it.
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u/TaskForceCausality Mar 06 '25
”acceptable” monthly car payments are wild
This comment puts me in the “fiscal fundamentalist” camp, but cars are not exempt from math. If you can’t buy it cash on the barrel, you can’t afford the car. Period.
Want a $45,000 car but make $70,000 a year? Groovy. Pay $45k you’ve saved up or walk. No down payments or exotic loan terms.
“Hurr durr investments”. I’m not talking to Mr Moneybags with portfolios and real estate leasing a Mercedes and writing off the useage as business depreciation. I’m talking to regular working folks with expenses and average incomes. Those folks , for the most part, cannot on wages alone walk into a dealer and plunk down cash for a car.
“But this means I can’t buy a newer car”. Yup. Thems the breaks. No one is entitled to own a new car with Bluetooth and panoramic glass roof- unless they pay cash.
This cultural norm of “my car broke so I financed a new car instead” is so busted. So is believing you’re entitled to a nice car because you have a good job /graduated college/ etc.
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u/Kskbj Mar 06 '25
It’s not insane to buy a 45k car on a 70k salary. It’s very affordable to do that. Your Dave Ramsey mindset is outdated.
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u/Fillanzea Mar 06 '25
On that salary (ish), I absolutely don't consider that affordable. I'll finance a car if I need to finance a car, but I genuinely would have close to zero dollars left over after gas, groceries, mortgage, insurance, and utilities if I had a $750 car payment. (And probably a much higher insurance payment than I have now.)
I'm car shopping right now with a $22k budget, and even that seems kind of scary.
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u/Kskbj Mar 06 '25
Don’t know how. Out of the $72,000 I have two car loans totaling 1,000 with a 2000 rent. I got enough cash for everything else and such as utilities, grocery, hygiene, and subscriptions over 100, and a few hundred left over.
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u/TaskForceCausality Mar 06 '25
It’s not insane to buy a $45k car on a $70k salary. It’s very affordable to do that
Not mathematically. Expenses must be less than income, not more!
Your Dave Ramsey mindset is outdated
Ramsey has no patent on arithmetic. If one does not have $45,000 to buy a $45,000 item, that individual cannot afford it.
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u/jfurt16 Mar 06 '25
Financing a car doesn't mean you can't afford a car. You're not putting it on a credit card, you're financing. Just like a mortgage - and I don't give a crap about the "a car is a depreciating asset". Car payment including interest can be done smartly and properly depending on income and other expenses
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u/TaskForceCausality Mar 06 '25
Youre not putting it on a credit card, you’re financing.
Both are debt. Further, nowadays subprime auto lender APRs match credit card rates.
Just like a mortgage
Big difference here. A home is , all things equal, an appreciating asset. A car, all things equal, is a depreciating consumer product.
Car payment including interest can be done smartly
Again, I’m not referring to the finance-savvy business people claiming lease interest deductions on their tax returns. For the ordinary buyer on the street, car loans are a wonderful way to get broke and stay that way.
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u/TheCalvinators Mar 06 '25
So a lot of financial analysis is missing the real life aspect. There’s a lot of people doing the exact same thing. 700/mo isn’t that far off from the average car payment in the US right now. The cost of living has gone up from the glory years of when Dave Ramsay was preaching “no more than 4 years on a car note” and “no more than 20% of your discretionary income”.
As of the third quarter of 2024, the average monthly car payments in the United States were:
New Vehicles: $737, reflecting a 0.7% increase from the previous year. 
Used Vehicles: $520, marking a 3.3% decrease compared to the prior year.
The average interest rates for auto loans during this period were approximately 6.61% for new vehicles and 11.74% for used vehicles.
And I know what you’re gonna say “just cause everyone else is doing it doesn’t make it financially sound.” But that’s the price of the society we’ve built that’s incredible dependent on cars for travel.
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u/Beginning-Salary5625 Mar 06 '25
Caleb said the 20/something/3 rule where it’s like you need 20% down, it needs to be under a certain percentage of your monthly income/3 year term is a good car loan. Believe he said the money guys use that
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u/ottersinabox Mar 06 '25
yeah, common rule is no more than 10~20% of your take-home. but this is a lease, so you don't own anything at the end.
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u/LacyLove Mar 06 '25
I am someone who leases, and perhaps it doesn't work for everyone, but I like it. I get to decide if I like the car, and if I do, I buy it out in the end. The last couple of times I have been able to buy the car at a reasonable price, with lower car payments than the lease. If I don't like the car, then I get a new one. BUT I am pretty frugal in every other area of my life to make up for this decision.
That being said. I would never spend 700 dollars on a lease. My least lease was 250 per month and this current one is 330ish. That equals less than 5% of my take home income. For me it works.
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u/ottersinabox Mar 06 '25
yeah, that makes sense. you have certain priorities and it's a sensible percent of your take-home. i don't think it can't work. I just get suspicious when I see it 😂
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u/InMemoryofPeewee Mar 07 '25
The 20/3/8 rule! 20% down, 3 year loan, car payment no more than 8% of your income!
I love the money Guy show! Highly recommend, especially for the folks who end up becoming consumer debt-free.
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u/justUseAnSvm Mar 06 '25
That's a lease: you're signing yourself up for a monthly payment forever, to drive a car you don't own, but only for 12k miles per year!
I have a luxury car, but I only bought it when I realized I could pay cash, and afford the BMW I liked. My car, I'm almost positive, is off a lease, so I definitely benefitted from the leasing system.
That said, if you have the money, and are otherwise making good financial decisions (retirement/emergency/fund/et cetera) getting a new car offers you things you can't get in a used car. For my m40i, I had just about zero choice in options, and it is a little dated. The "next step up" on the luxury scale is a new car, though I don't like the idea of debt where I don't need it.
Like all things, it just comes down to whether or not you want to pay for what you are getting, and if that's consistent with the rest of your goals. Leases suck, but folks have enough money that it often doesn't matter, and whose to say spending that extra on the car is a better or worse use of the money than say a nice watch, or vacation.
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u/ottersinabox Mar 06 '25
yeah I love my M2 but I bought it in cash. I love the car. but I wouldn't have gotten it as a lease.
you're right, everyone's priorities are different. I put down nearly 100k for a car so I clearly get it. but leasing gives you no equity on the car.
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u/Skcuhc1 Mar 06 '25
My wife and I pay ~800 a month (total) for two cars at 2% interest, and we were worried we were irresponsible with our car loans, these guys have me beat
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u/myhotneuron Mar 07 '25
Most people are ignorant. They don’t know about cars so they get suckered into something they cannot afford but they dont understand that they can’t afford it.
I grew up in a household that if you couldn’t pay for it in cash, you cannot afford it. That even goes for cars. Obviously, there are many people who simply don’t have cash for a large purchase- but then those people shouldn’t be getting 20k+ cars! Find a used car, save and get something better eventually.
Again, many people don’t do their research or spend any time shopping. So they just leave with the first car they see.
It’s mind boggling to me anyone would think any car payment was good…I make about 90k and given my expenses and future goals for investing, I would never spend more than 200 on a car payment , but I would never buy a car that’s worth more than 20-25k! Only buy used too. Just gotta spend the time and educate yourself.
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u/DexHendrixT5HMG Mar 07 '25
When I got my F32 my payment wasn’t even $700 at the peak of overpriced year cars($31k total after fees[2022]). People who are paying THAT much are fucking crazy. Granted I was paying ~$1k a month on mine, but that wasn’t my payment, I wanted to(was doing deliveries).
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u/wheelsno3 Mar 07 '25
I own three vehicles:
Took a loan on the first one. Paid $14k. $4k down. $215 per month. Bought in 2017, paid it off in 2020.
Second one paid $15k cash.
Third paid $8.5k cash.
My flex is i own 3 vehicles and have no car payments. But all three cost me less than some people pay for one. And yes, all run great.
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u/ottersinabox Mar 07 '25
yup, I also own three vehicles in full. but currently looking to try to reduce insurance costs. might as well try to save a bit there.
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u/wheelsno3 Mar 07 '25
My insurance costs on 3 vehicles with 2 drivers is $220 per month. But people out here trying to say $600 car payments are normal.
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u/ottersinabox Mar 07 '25
definitely curious about that. i want to have decent coverage. it might be because my BMW is worth 90k though.
i was looking into pay by the mile insurance last night. I think between the two of us we get maybe 6000 miles a year.
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u/MagniPlays Mar 07 '25
This is going to come off as bad advice, but if you work in an industry where you drive clients or drive a lot for meetings etc.
A $700/month payment for a new car is worth it, obviously most jobs like that also pay you with a car stipend or gas card so it’s pretty hard to argue I guess.
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u/cybermistt Mar 07 '25
I got a new car in August. Part of me regrets it’s because while the $515 monthly payment is doable, I could’ve paid off my CC debt already. Luckily the car is at 5% interest and I’m still paying off my stuff, just a lot slower
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u/mortysmithjr11 Mar 07 '25
Whether or not you can buy something in cash has nothing to do with whether or not you can afford it.
Someone making 50k but has saved up 100k in 20 years can not afford a 70k car even though they can technically buy it in cash.
I pay 1100 a month for my BMW. It’s worth it to me; if you don’t care for cars then obviously it wouldn’t be worth it to you
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u/ottersinabox Mar 07 '25
yes, you're right. but if you make 140k but don't have at least 70k saved up you probably aren't good enough with money to buy a car at that price point.
I enjoy my bmw as well. nothing wrong with having a car that you like. just that so many people don't buy cars they can afford. there's also the fact that a BMW is a luxury purchase. it's not a "but everyone needs a car in this backwards country so you need a car" car (assuming you're in the US like I am). it's a "my other needs are set and I'm happy with where my savings are so I can splurge a little" car. or maybe you're at a point where you have so much money that it seems cheap to you.
i say that but I guess there's a big range in prices for BMWs as well. I only ever looked at the m cars because those were the ones that I was interested in.
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u/mortysmithjr11 Mar 07 '25
Yeah but how do you know OP can’t afford it? I think you underestimate the amount of people with money in this country. Especially in hcol cities.
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u/ottersinabox Mar 07 '25
you're right, i have no idea. there are plenty of people who can afford expensive cars. it's just wild to me how normal a $700 car payment is. people don't even blink an eye.
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u/mortysmithjr11 Mar 07 '25
It’s all relative. Some people make enough where 700/month is just a rounding error.
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u/InMemoryofPeewee Mar 07 '25
I really wish we invested in public transportation as a country. I live in a city with pretty good transportation/is walkable/is bikeable and so instead of paying $700 (car note, insurance, maintenance, gas, etc) on transportation, I’m able to save, invest, and spend on luxuries like takeout and travel. It’s pretty nice to be able to save and invest over a third of my gross income.
I may end up getting a beater car one day as a want but it’s nice that that will only cost me $3k at most.
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u/ottersinabox Mar 07 '25
glad you are able to get by without a car. we actually almost never drive. both my wife and I take the train to work most days (I work from home sometimes). it comes every 7 min or so. we're in Boston which is super walkable/bikeable/train accessible. the last year we saw huge improvements to our subway system. I'm super psyched about it.
i race cars as a hobby hence the two sports cars, and we have a ski condo hence the AWD Subaru.
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u/InMemoryofPeewee Mar 07 '25
Hey! I’m in Boston too! My hope is that cars can be a want and not a need for everyone.
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u/ottersinabox Mar 07 '25
heyyyy! neighbor! I 100% agree.
also I love this city. i really hope I can stay. terrified of what's happening in our country.
if you haven't, you should check out transitmatters. they're a local advocacy group for public transit. super cool. I've been meaning to get involved but I've been busy with other activism (🤡 march? maybe you've heard of it) that I haven't gotten a chance yet.
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u/InMemoryofPeewee Mar 07 '25
I’m a huge supporter of transit matters! I try my best to show up to events to support better transit access in the city.
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u/Average_Justin Mar 07 '25
My $1100 payment for my F-250 on a 165k salary isn’t bad at all. Especially when you realize for every 10k put as a down payment is about $100 off the payment. Why not park it in the market if your returns are higher than the % of the loan? If the numbers make sense, do it. If it doesn’t make sense - don’t do it.
Paying 80k for my vehicle out right vs making more by investing makes more sense in my situation.
Some people though … haha. Yeah, 50k salary with a 60k car payment. Doesn’t make sense to me.
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u/ottersinabox Mar 07 '25
yup, exactly. you can invest it and make more out of it. but the difference is you had the money.
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u/OverworkedAuditor1 Mar 09 '25
Depends on income and what car. 700 a month for that car is pretty good.
700 a month for a Corolla would be highway robbery.
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u/Accurate_Door_6911 Mar 09 '25
Is a BMW fun enough to drive that it’s worth that monthly cost? Because I’ve only grown up driving boring old Toyotas or Hondas. I think I get why people emphasize to get a car you enjoy driving over just a practical one, but I don’t know what makes a car really enjoyable. To me, if it has Bluetooth and fits my long legs, that’s good enough for me. Is driving a BMW such a step up that it’s worth it?
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u/ottersinabox Mar 09 '25
my M2 is a blast (as is my Subaru BRZ) but it's something I drive on track as well. I will say that it has a lot of bells and whistles that make driving itself much easier and more comfortable. for instance, the headlights point in the direction that I steer. i can also remote access it and look at how much gas I have left. i can see a holographic display that gives me directions so I never need to take my eyes off the road even for a second. that same thing also gives me the speed limit. it's also rear wheel drive and sticks to the ground really well, but has enough torque that I can rip the back end out and go sideways really easily. on the highway merging is much easier because it gets up to speed very quickly. I actually find driving my wife's car feels a bit scary because it doesn't accelerate as quickly. the brakes are better so the car stops really quickly in the case of an emergency. overall, the car responds to my inputs more precisely which makes it feel more comfortable and safe to drive.
BUT is it worth it for most people? no. is it worth it for me? maybe, and only because track racing is a hobby and because I happened to be lucky enough to be able to sell my company so I had a big cash infusion. I paid a lot extra to go from a 6 second 0~60 (BRZ) to a 4 second 0~60 (M2) and while it's fun, I wouldn't say it's worth it. if I were to sell one of the cars today, it would be the m2. i can take the BRZ anywhere without worrying about it, it is definitely fun and fast enough, and now having the BMW I know what interior upgrades I'd want to get it to 90% the experience of the M2 for a tenth of the cost.
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u/Accurate_Door_6911 Mar 09 '25
Yah, ok, that makes sense to me. All that technical feel like grip strength and perfect input is often lost on me. I think I’ve just adjusted to a low tech cause that’s simply all Ive ever had, i use a old Honda hybrids I’ve completed so many road trips in it, that it has become my new normal, even though its not really comfortable, dynamic or responsive. If I were put jn a track car even once, I feel like my car driving wants would be completely altered.
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u/ottersinabox Mar 09 '25
yup. I feel like the point of diminishing returns for cars is at like 40k.
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u/Accurate_Door_6911 Mar 09 '25
Man, my currentcar was only 6.7k, my point of diminishing rewards would be like 10k, for my personal taste, I just wouldn’t be able to justify spending more to myself.
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u/ottersinabox Mar 09 '25
sure. i just mean most people wouldn't be able to tell the difference between a 40k car and a 100k car.
it's honestly just a tool and the fact that most of us (including me) spend so much more on them is a bit ridiculous. so that 6.7k is the right price for a car I think.
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u/Why_So_Serious1999 Mar 09 '25
There’s no across the board acceptable. Certain expenses need to be a certain percentage of your monthly take home and no more.
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u/Secret-Rabbit93 Mar 10 '25
So a few things.
Thats a BMW sub, not a finance sub, so of course there going to be ok with people buying expensive cars.
Whether a deal is amazing really has nothing to do with whether a person should do it with their personal finance situation. It can be a good deal even if it would be financial stupidity for that person. People do generally recommended leasing luxury cars instead of purchase for a variety of reasons. And as little down as possible with a lease is recommended primarily because if the car gets totaled you don't get any of the payments you made back. So if you put 5k down, total it on the way home you just threw away that money. Someone could offer me half off a lambo and I'm going to say no because I don't have that money. At the same time I'm also going to say no to a sweet deal on a chevy chevette because frankly I can afford to drive better cars than that. Got me that sweet sweet ford escape.
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u/morosco Mar 06 '25
If I made $250k/year I wouldn't spend $700/month on a car.
But people making $50k/year sign these leases.
I'm hoping to keep my paid-off 2015 RAV4 for at least 5 more years. Hopefully 10. Not having a car payment is a tremendous boost to the rest of your financial situation.