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Hey guys, so I'm a young professional in my mid 20s and I still have my first car that my parents bought for me after I graduated high school (An old VW Golf GTI It's not bad). I think its time for a change, as it's kind of embarassing to pick up women in it. So currently I'm making around 175k after tax per year, and around 25k in rent is coming to me as well per year, but that's not guaranteed. My total expenses are 4 k a month, sometimes less. So, what would you guys recommend? Preferrably the car would be at least capable in all weather conditions.
Answer
I answered another question kind of like this... This is the answer I gave the other person below. You don't say what your age is, so I can't recalculate the numbers, but you're a young professional â I am sure you can figure out how to work a compound interest calculator. Some other guy said 50% of your income is acceptable... which is over $80k for you. Since you shouldn't have a car loan for more than 3 years, you could buy a 40k car and invest the other 40k...
You can get a lot for 40k. Does it have to be brand new? You could get a 2 year old 5 series or a 3 or 4 year old 750xi for around 40k with AWD. A 2 or 3 year old car has already depreciated a lot in value, and as long as you get a car that is still being made (meaning the body style, etc., hasn't completely changed) no one will know it is old unless you tell them. If you buy it pre-owned from a car dealer, you can probably get an extended warranty, etc. If you don't like BMW, check out the Infiniti M37x or M56x. You can get a 1 or 2 year old one for around half of what they are selling for brand new.
As for a car being suitable for all weather conditions, if you get a car that is AWD and put snow tires on it, you will be fine. The tires are SOOOOOO important. Don't cheap out and just get "all-season" tires. You need winter tires for the winter. Check this out: http://www.youtube.com/watch?v=L2wTg0l3_wI it shows summer vs all season vs winter tires.
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Your car loan shouldn't be for more than 3 years... Since you're 22 now (you didn't give me your age, so i can't recalculate this), if you invested that 40k over the next three years and could average 6-8% over the next 40 years, you would have...
$442,000 â $935,000. Is that car really worth almost an extra $1,000,000? (Accounting for inflation at 2.5%/year, that comes to almost $170,000 â $353,000. So, whatever you could buy for that today, you could buy the same exact thing when you are 65.)
Also, make sure you fully fund your ROTH IRA and your 401(k) to the match (if you get a 401(K) plan through your company) before you even worry about buying a car that is well above your means. You're very young, so now is the time to invest for your retirement... You'll thank me when you are old :) BY THE WAY!!! You can get a Roth IRA even though you don't qualify for one because you make too much money. Open a non-tax-deductible traditional IRA and do ROTH conversions.
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My rule of thumb is don't spend more than 10% of your monthly after-tax income on a car payment... You probably make around 120k/yr after-taxes without counting your rental income. Don't figure your rental income into what you make because at any time your tenants could simply stop paying you. 120k/yr is 10k/month. A 40k car loan with no down payment over three years is going to be around 1150-1200/month depending on the interest rate you get. I think that's perfectly acceptable to go a little over the 10% in your case because you make a larger amount of money than the average person.
Also, count on your gas bill and insurance bill going up with having a luxury car. It shouldn't really affect you too much, but it's something to consider.
I answered another question kind of like this... This is the answer I gave the other person below. You don't say what your age is, so I can't recalculate the numbers, but you're a young professional â I am sure you can figure out how to work a compound interest calculator. Some other guy said 50% of your income is acceptable... which is over $80k for you. Since you shouldn't have a car loan for more than 3 years, you could buy a 40k car and invest the other 40k...
You can get a lot for 40k. Does it have to be brand new? You could get a 2 year old 5 series or a 3 or 4 year old 750xi for around 40k with AWD. A 2 or 3 year old car has already depreciated a lot in value, and as long as you get a car that is still being made (meaning the body style, etc., hasn't completely changed) no one will know it is old unless you tell them. If you buy it pre-owned from a car dealer, you can probably get an extended warranty, etc. If you don't like BMW, check out the Infiniti M37x or M56x. You can get a 1 or 2 year old one for around half of what they are selling for brand new.
As for a car being suitable for all weather conditions, if you get a car that is AWD and put snow tires on it, you will be fine. The tires are SOOOOOO important. Don't cheap out and just get "all-season" tires. You need winter tires for the winter. Check this out: http://www.youtube.com/watch?v=L2wTg0l3_wI it shows summer vs all season vs winter tires.
~~~~~~
Your car loan shouldn't be for more than 3 years... Since you're 22 now (you didn't give me your age, so i can't recalculate this), if you invested that 40k over the next three years and could average 6-8% over the next 40 years, you would have...
$442,000 â $935,000. Is that car really worth almost an extra $1,000,000? (Accounting for inflation at 2.5%/year, that comes to almost $170,000 â $353,000. So, whatever you could buy for that today, you could buy the same exact thing when you are 65.)
Also, make sure you fully fund your ROTH IRA and your 401(k) to the match (if you get a 401(K) plan through your company) before you even worry about buying a car that is well above your means. You're very young, so now is the time to invest for your retirement... You'll thank me when you are old :) BY THE WAY!!! You can get a Roth IRA even though you don't qualify for one because you make too much money. Open a non-tax-deductible traditional IRA and do ROTH conversions.
~~~~~~~
My rule of thumb is don't spend more than 10% of your monthly after-tax income on a car payment... You probably make around 120k/yr after-taxes without counting your rental income. Don't figure your rental income into what you make because at any time your tenants could simply stop paying you. 120k/yr is 10k/month. A 40k car loan with no down payment over three years is going to be around 1150-1200/month depending on the interest rate you get. I think that's perfectly acceptable to go a little over the 10% in your case because you make a larger amount of money than the average person.
Also, count on your gas bill and insurance bill going up with having a luxury car. It shouldn't really affect you too much, but it's something to consider.
Why are pretty women attracted to gangsters?
Q. I watch mob movies and play video games on organized crime. All the pretty women are romantically involved with men in the criminal underworld. The average women are with non-criminal men.
I guess gangsters get all the women.
I guess gangsters get all the women.
Answer
It is true that you are getting your source from movies and video games but on the other hand there is a sense of priority in that lifestyle, the best restaurants, respect out of fear, luxury items, and somehow a belief that her love will change him. Most "gangsters" live a double life and as sociopathic as they may be on the street can be just as loving and gentle at home. Women love power in many forms and their are many woman who will find that lifestyle brash and unacceptable.
It is true that you are getting your source from movies and video games but on the other hand there is a sense of priority in that lifestyle, the best restaurants, respect out of fear, luxury items, and somehow a belief that her love will change him. Most "gangsters" live a double life and as sociopathic as they may be on the street can be just as loving and gentle at home. Women love power in many forms and their are many woman who will find that lifestyle brash and unacceptable.
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Title Post: How much car can I afford, and what car should I get with that budget?
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Rating: 98% based on 9457 ratings. 4,7 user reviews.
Author: Unknown
Thanks For Coming To My Blog
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