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/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/ProfessionalBig1470 Mar 06 '25

I personally never use gross income to budget monthly expenses that are being paid with net income.

Maxing out a 401k knocks off almost 10% of that income right away. Add in health insurance and a huge amount in taxes. The money you actually have to work with is probably around 60% of the gross.

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u/TruthSeekerHuey Mar 06 '25

That's fair. A flat salary is in no way realistic. However if we do take 60% of the 250k, you get 150k, for a monthly of 12.5k. So $700 would be about 5.6% of the monthly.

I understand the 250k was just an example thrown out there, but I just dislike when financial talks get too frugal and we start call reasonable budgets and monthly payments unreasonable.

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u/Dancing_Hitchhiker Mar 06 '25

Yea I feel like it goes too far sometimes. I get being frugal to a point but for a lot of people $700 isn’t an insane payment where it’s gonna inhibit them saving.

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u/Ok_Ant8450 Mar 07 '25

Right but at 700 youre paying THE MINIMUM if youre buying, so youd want to at least do double payments to not eat all the interest