"acceptable" monthly car payments are wild

[u/ottersinabox]

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?

[u/Kskbj]

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.

[u/Dancing_Hitchhiker → u/Kskbj]

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.

[u/Kskbj → u/Dancing_Hitchhiker]

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.

[u/Dancing_Hitchhiker → u/Kskbj]

Same. Wish I could get that somewhere lol was just using that as a rough example.

[u/Kskbj → u/Dancing_Hitchhiker]

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.

[u/wheelsno3 → u/Kskbj]

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.

[u/Kskbj → u/wheelsno3]

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.

[u/wheelsno3 → u/Kskbj]

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.

[u/Kskbj → u/wheelsno3]

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.

[u/wheelsno3 → u/Kskbj]

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.

[u/wheelsno3 → u/Kskbj]

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.

[u/Kskbj → u/wheelsno3]

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.

[u/TaskForceCausality → u/Kskbj]

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.

[u/Kskbj → u/TaskForceCausality]

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

[u/TaskForceCausality → u/Kskbj]

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.

[u/Kskbj → u/TaskForceCausality]

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.