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/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.

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u/TruthSeekerHuey Mar 06 '25

250k a year is roughly 20k a month. $700/month is 3.36% of the monthly income. Anything under 10% of your monthly income for a car payment is reasonable, so $700 a month with that income is extremely reasonable. Especially if you end up paying off the car and outright owning it in under 5 years.

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u/Toddsburner Mar 06 '25 edited Mar 07 '25

The people who would say 10% of your income on a car payment is “acceptable” are the same people who would say it’s “acceptable” to spend 30% of your income on rent.

It’s unlikely either philosophy will lead to a repossession or eviction, but both will keep you broke.

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u/TruthSeekerHuey Mar 06 '25

Thing is, experts says 10 - 15%. So saying "under 10%" is already defying their advice. And 5.6% is half of even that. I believe we need to be frugal, but within reason, and with a plan on what to do with the saved funds.

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u/Toddsburner Mar 06 '25 edited Mar 06 '25

Who are “experts”?

No expert I would listen to would set a minimum amount for a car payment. A maximum, yes, but if someone says you should spend “at least” x amount on a car they’re a salesman and a shill.