coltboostin Posted May 13, 2015 Report Share Posted May 13, 2015 The older I get, I seem to live my live in 3-6-12 and 60 month projections on where I want to be financially, and how to get there. Any short term expenditure I look as a percentage of yearly gross to consider if its worth doing. That being said, does anyone else look at car purchases (DD or dedicated toys) int he same way? Or, do you just do to the deal, say I want that, and find someone whom will fiance it? Things are great now, but my wife does not work and probably wont for at least the next 2 years. I am considering stepping up the price point for my car shopping, but hesitate to go over 30% of my yearly gross. Is that a ridiculous way to think about car buying? Quote Link to comment Share on other sites More sharing options...
Draco-REX Posted May 13, 2015 Report Share Posted May 13, 2015 It's been my experience that the smart way to handle your money is rarely fun, and the fun way to handle your money is rarely smart. 1 Quote Link to comment Share on other sites More sharing options...
Littleguy Posted May 13, 2015 Report Share Posted May 13, 2015 For the daily I am pretty strict on my budget and only look at cars that I can afford to buy cash, if it can't be done without a loan it is probably too expensive. For my toy it started out with a budget.....then the budget increased.....now there is no budget, I just want it to be perfect (for me, I give zero shits about what anyone else thinks I should to to it). Quote Link to comment Share on other sites More sharing options...
STEVE-O Posted May 13, 2015 Report Share Posted May 13, 2015 I will never finance a car ever. I also buy very smart as daily or toy it's always a investment. If you can afford it buy it. If you have to question it you can live without it. I also step back and know what I "want" and of what I want is not in my price range I find a way to make that extra money up like working extra hours, flipping a car, side job anything I can so I can justify the added cost Quote Link to comment Share on other sites More sharing options...
nurkvinny Posted May 13, 2015 Report Share Posted May 13, 2015 30% OVER your gross? I'm more into the 25% OF my gross kind of car budget. Strokes and folks and stuff. Quote Link to comment Share on other sites More sharing options...
KillJoy Posted May 13, 2015 Report Share Posted May 13, 2015 but hesitate to go over 30% of my yearly gross. 30% OVER your gross? I'm more into the 25% OF my gross kind of car budget. Strokes and folks and stuff. You guys are within 5%. KillJoy Quote Link to comment Share on other sites More sharing options...
STEVE-O Posted May 13, 2015 Report Share Posted May 13, 2015 You guys are within 5%. KillJoy All depends on their Gross however Quote Link to comment Share on other sites More sharing options...
STEVE-O Posted May 13, 2015 Report Share Posted May 13, 2015 30% OVER your gross? I'm more into the 25% OF my gross kind of car budget. Strokes and folks and stuff. You mis read, he is saying he doesn't want to GO OVER 30%, not 30% over Quote Link to comment Share on other sites More sharing options...
EssFo Posted May 14, 2015 Report Share Posted May 14, 2015 I do short term financing on most of my vehicles. With interest rates being sub 3% I don't hesitate to borrow when I need to especially since my money has a greater return than that. Just my opinion. If you can buy a car and not have to give up things to pay for it (saving money, eating out, buying ammo) then you can probably afford it. Quote Link to comment Share on other sites More sharing options...
Lauren Posted May 14, 2015 Report Share Posted May 14, 2015 The wife's car is always financed and always a new car with full warranty. We keep it in a certain budget. My car are always paid in cash and are toys. I try to keep initial purchase price sub 5k and leave myself an ROI for when I want something else. I also tend to try and find used parts for them so my money goes farther when it comes to modding, plus used parts I can sell for the same if not more when it comes time. Quote Link to comment Share on other sites More sharing options...
coltboostin Posted May 14, 2015 Author Report Share Posted May 14, 2015 For the daily I am pretty strict on my budget and only look at cars that I can afford to buy cash, if it can't be done without a loan it is probably too expensive. For my toy it started out with a budget.....then the budget increased.....now there is no budget, I just want it to be perfect (for me, I give zero shits about what anyone else thinks I should to to it). That seems backwards to me, but you pose a fair argument. 30% OVER your gross? I'm more into the 25% OF my gross kind of car budget. Strokes and folks and stuff. You are misreading what I wrote. but hesitate to go over 30% of my yearly gross. Get it now? Quote Link to comment Share on other sites More sharing options...
Jewtoys Posted May 14, 2015 Report Share Posted May 14, 2015 You're going to get a million different responses, as everyone is going to be in different situations. 75% of my car/bike/watercraft purchase are made knowing I will get sick of them fairly quickly and not own them for too long, so I buy smart. Pretty much 9 times out of 10 I will either break even or make money when I resell so I never focus on it as a percentage of income or anything. Quote Link to comment Share on other sites More sharing options...
Diamonds Posted May 14, 2015 Report Share Posted May 14, 2015 I don't understand the "gross income percentage thing" - 30k new grads are buying 20k cars - 150k earners can afford a car that cost more than 45k because the the "break even" required to live. Are you saying "spend 30% of your gross income per year" on your car hobby? iE - if you make 100k you spend 30k per year on car stuff? Or are you saying that if you make 100k a year that you are driving a 30k Car (or, 30k in carS) Quote Link to comment Share on other sites More sharing options...
coltboostin Posted May 14, 2015 Author Report Share Posted May 14, 2015 You're going to get a million different responses, as everyone is going to be in different situations. 75% of my car/bike/watercraft purchase are made knowing I will get sick of them fairly quickly and not own them for too long, so I buy smart. Pretty much 9 times out of 10 I will either break even or make money when I resell so I never focus on it as a percentage of income or anything. So, why don't I get a beater Gallardo? That's really the argument. Also that mentality only lasts so long. We can just pass cars endlessly around the car community for the sale resale value. Eventually, someone is going to lose. Its like a shitty game of hot potato. Or, buy this, put 2 car seats in it, drive it for 3 years, and break even. http://www.autotrader.com/cars-for-sale/vehicledetails.xhtml?zip=44131&endYear=2010&modelCode1=CTS&sortBy=derivedpriceASC&showcaseOwnerId=0&startYear=2007&makeCode1=CAD&engineCodes=8CLDR&engineCode=8CLDR&searchRadius=0&trim1=CTS%7CV&mmt=%5BCAD%5BCTS%5BCTS%257CV%5D%5D%5B%5D%5D&listingId=391763457&Log=0 Quote Link to comment Share on other sites More sharing options...
Turbs3000 Posted May 14, 2015 Report Share Posted May 14, 2015 I would think of it as what the payments are as a percentage of your monthly income. Also assuming your saying you make 6 figures and are talking 30-40k cars you practically have to pull the trigger so that you can depreciate it against your taxable income. Quote Link to comment Share on other sites More sharing options...
coltboostin Posted May 14, 2015 Author Report Share Posted May 14, 2015 I don't understand the "gross income percentage thing" - 30k new grads are buying 20k cars I think that mentality is a big part of the american Debt problem. I see that as a dumb move, most dont. Are you saying "spend 30% of your gross income per year" on your car hobby? iE - if you make 100k you spend 30k per year on car stuff? Or are you saying that if you make 100k a year that you are driving a 30k Car (or, 30k in carS) #2. Quote Link to comment Share on other sites More sharing options...
coltboostin Posted May 14, 2015 Author Report Share Posted May 14, 2015 I would think of it as what the payments are as a percentage of your monthly income. Also assuming your saying you make 6 figures and are talking 30-40k cars you practically have to pull the trigger so that you can depreciate it against your taxable income. Its not a house lol. The only way you can pull that shit is if you sneak it into some LLC or Schedule A and hope you dont get Audited. Quote Link to comment Share on other sites More sharing options...
Diamonds Posted May 14, 2015 Report Share Posted May 14, 2015 (edited) Wait, so if you make 100k you are saying that you are only going to drive a 30k car? That's like 650/month... Do you have a bad gambling/gun/women problem that doesn't allow for more cash each month to pay a car note? Now that I think about it.. I need a better car Edited May 14, 2015 by Diamonds Quote Link to comment Share on other sites More sharing options...
Jewtoys Posted May 14, 2015 Report Share Posted May 14, 2015 So, why don't I get a beater Gallardo? That's really the argument. Also that mentality only lasts so long. We can just pass cars endlessly around the car community for the sale resale value. Eventually, someone is going to lose. Its like a shitty game of hot potato. Or, buy this, put 2 car seats in it, drive it for 3 years, and break even. http://www.autotrader.com/cars-for-sale/vehicledetails.xhtml?zip=44131&endYear=2010&modelCode1=CTS&sortBy=derivedpriceASC&showcaseOwnerId=0&startYear=2007&makeCode1=CAD&engineCodes=8CLDR&engineCode=8CLDR&searchRadius=0&trim1=CTS%7CV&mmt=%5BCAD%5BCTS%5BCTS%257CV%5D%5D%5B%5D%5D&listingId=391763457&Log=0 Like I said, it usually works 9 out of 10 times in my favor but for the times it doesn't, it's not that big of a deal. It's a much better method than some % of income crap.... Gallardo prices have slightly risen since last year, I was going to scoop one up myself but came to the realization it would be a pointless purchase as the performance of that car is out dated and much better buys for that money. Also if you're having to contemplate a purchase for 27k, like the car listed maybe you shouldn't purchase it............. Quote Link to comment Share on other sites More sharing options...
Got-Boost? Posted May 14, 2015 Report Share Posted May 14, 2015 Everyone's situation is so different that it's hard to say which is really the right choice or more right. Any financial person will tell you to buy the cheapest possible car you can buy in cash and keep working up into nicer cars as you have the cash to do so. However, those people also only see cars as transportation and nothing more. I don't car shop based on a % of my income. It's based more on the complete direction I'm headed and family needs. I tend to keep a lot more extra money in the budget now with family responsibilities for saving, investing, kids, vacation, etc.. I honestly just don't have the time anymore to play like I use to. Same reason I haven't really found a car that I've just got to have and can enjoy. I don't really see the point in spending $50-80-100K+ for a car that's just going to sit in my garage and collect dust. Quote Link to comment Share on other sites More sharing options...
dq driver Posted May 14, 2015 Report Share Posted May 14, 2015 I've look at it the same way and a few other ways. Lately my focus is on the following: 1) Debt to Income ratio, monthly = (total debt payments/ gross income) ; Being from a mortgage financing background you know this ratio/term. If you're above 43%, you probably won't get a qualified mortgage. What are you comfortable with? 2) Debt Ratio, overall = (Total Debt / Total Assets) ; how much debt are you willing to take on in your big picture? Most "advisers" would recommend not spending anymore than 20% of your gross yearly income on a vehicle, and would prefer it if was more like 10%. You're a car guy, you tend to do your research and get good deals, and can maintain them. This is a positive and a negative, because you desire more and are most likely going to go as much as 40-50% because it doubles as enjoyment/hobby in addition to the typical commuting. Quote Link to comment Share on other sites More sharing options...
Buteo Posted May 14, 2015 Report Share Posted May 14, 2015 For me it's been a pickle. I would love to go get a Ferrari 430 scud or 458 and enjoy the hell out of it. But having a vehicle like that in my line of work is bad for business...a 911 is more acceptable and cayman even more so hence my choice of the GT4. Once I get to "fuck you" money, a place where you can walk away if everything goes to shit and still be financially golden, then I'll grab that Ferrari. And like someone else mentioned, only finance below 3% if you do. Keep your money working for you. Quote Link to comment Share on other sites More sharing options...
tdyguy2k Posted May 14, 2015 Report Share Posted May 14, 2015 So, why don't I get a beater Gallardo? That's really the argument. Also that mentality only lasts so long. We can just pass cars endlessly around the car community for the sale resale value. Eventually, someone is going to lose. Its like a shitty game of hot potato. Or, buy this, put 2 car seats in it, drive it for 3 years, and break even. http://www.autotrader.com/cars-for-sale/vehicledetails.xhtml?zip=44131&endYear=2010&modelCode1=CTS&sortBy=derivedpriceASC&showcaseOwnerId=0&startYear=2007&makeCode1=CAD&engineCodes=8CLDR&engineCode=8CLDR&searchRadius=0&trim1=CTS%7CV&mmt=%5BCAD%5BCTS%5BCTS%257CV%5D%5D%5B%5D%5D&listingId=391763457&Log=0 That's actually a real good price for that car. You won't find many V's below $30K, even with that mileage. And it's 550+ horsepower and torque. Quote Link to comment Share on other sites More sharing options...
Diamonds Posted May 14, 2015 Report Share Posted May 14, 2015 Ok, here's a question... Based on your income (assuming all other spending/bills aren't out of whack, what multiple of your household income can you spend on a house? I am looking for a house right now. I make "X" and I am looking at houses that are 2.5X.... Is that okay? I'm looking for a "rule of thumb" answer. Not a "everybody is different" answer. Quote Link to comment Share on other sites More sharing options...
Turbs3000 Posted May 14, 2015 Report Share Posted May 14, 2015 Ok, here's a question... Based on your income (assuming all other spending/bills aren't out of whack, what multiple of your household income can you spend on a house? I am looking for a house right now. I make "X" and I am looking at houses that are 2.5X.... Is that okay? I'm looking for a "rule of thumb" answer. Not a "everybody is different" answer. 2-4 Quote Link to comment Share on other sites More sharing options...
Recommended Posts
Join the conversation
You can post now and register later. If you have an account, sign in now to post with your account.