I was just wondering how much money, percentage of your take home pay, is too much to allot for a car payment. and how much you allot for your cars.

 

Well, figure out what bills you have to pay (rent, insurance, etc..) and then compare that with your take home pay. If you are barely able to pay for the car, then it's too much for you to handle. You have to give yourself some wiggle room just in case of an emergency. Just my .02.

 

Doesn't it depend on your priorities?

According to your profile, you are quite young. (20) Thus it also depends on your income and what "financial" goals you have for yourself and your future.

Usually, disposable income should go to saving for a house etc. A House has typically been a very good investment over the long haul. Thus most people try to be a bit conservative in the beginning with cars etc., saving those indulgences for later in life. Yes, it would have been nice to have a nice little sporty thing at 20, but I did want a nice roof over my head and more than cereal to eat. So I stuck with the conservative lower priced cars but not too lower priced. Then there is the insurance to consider until you hit that magic age of 25.

Typically, 20% of take home should be about all you should pay, but even that seems high depending on your income. I would list out your priorities and goals and set a budget and see what you can come up with for a car. You are very young...you have years to own a sporty thing...it's not always just for the young!!

Oh well. 'nuff lecturing.

 

funnyesq makes a some very good points to consider.....

For someone in school who lives at home, a number approaching 100% isn't necessarily unreasonable (although there's a lot to be said for saving). If you're out on your own, then it changes significantly. Plus, you're going to see lots of variation because some people have leases, some have loans (of varying lengths), some own their car outright. A simple percentage won't tell you which category a person is in.

FWIW, my number is almost exactly 10% of take-home, with a loan payment of $503/month. I'm 26, married, just bought a house, funding a 401(k) and settong aside money for other investments. I'm a serious car guy, but that's about all I'm comfortable spending at this time.

 

funnyesq I could not agree more. However if you have plans for college and it is coming out of your pocket, I would consider something else, and save the s2k for a graduation present I got mine at 24 (25now) mostly because I was paying a tad too much for a 99Civ SI, and my s2k only cost me $100/month more. And because my new job (same $ but salary instead of commission) gave me $300/month car allowance, it became a 'no brainer' IMO. Including car allowance about 20% of my income goes to my car, and no regrets so far.
Steve

 

The whole this is rather relative. Too many variables to give a good answer with. Different people have different priorities. Some would put expensive stuff on their S's and others would just leave it as is. Some drive to excess some do not. Some save for a rainy day, others do not. I fall somewhere in between. I do not believe I spend to excess, but at the same time I'm not so conservative as to save only for that rainy day. I do want to enjoy the present but I'm happy with some things others would not be so happy with. This was a bit of an early treat as I was waiting until the big "50" so I did it at 48. To a lot of you that is quite old, but I can assure you that I'm quite young at heart and who the f--k cares what y'all think. I'm enjoying my S and THAT's what IS important.

To a youngin of 20, I'd say he/she has a lot of time to think and save before spending this extravagently...of course to many it's not that extravagent...it is all relative. If you are a trust fund baby...no problem...if you are a high school grad in college scraping together tuition and want the S too, I'd say get the tuition forget about the S until AFTER graduation and until after you hit 25...get a beater until you are 25 and save the insurance...why make the insurance company's rich? People, especially youngins are just to anxious to have things NOW rather than wait. I know, I was young once and I'm also a Pisces...spontaneous is my middle name..>I want it now...but sometimes it is sweeter if you wait...you don't know what is in store in the coming years...maybe there will be a sweeter car for 2006? I don't know...but things change, people change.

 

1/3

 

When you are in your teens and twenties, goals and priorities have a way of changing very quickly. Be very careful about making commitments involving big percentages of your income. Your goals and your vision might change tomorrow.

What seemed like a great thing to do today might become a burden tomorrow.

 

thanks guys for all your input. i've looked at it from every perspective. i never want to make a bad financial decision especially because i am going to school to become a financial planner. I already stick money aside in a 401k company match plan and all that so i have a lil saved but if i scooped up an S it would be almost double my measley car payment right now on a civic.

I tell myself the right thing is to wait till i get out of college and pick up a sweet ride to drive to the office everyday, but sometimes i also tell myself hey get it now while i'm young and dont have a rent payment or any bills currently. 100% debt free other than a car payment. insurance isnt really a big thing i checked with my agent and he said it would only be 95 bucks a month and it would drop even lower when i turn 21 in 4 months.

i guess the smart thing to do would be to just wait, dont have any financial worries while in school and treat myself in the future. but damn its just so hard when i see you guys drivin yours. i get so damn jealous.

this is the only time i wish i had a mommy and daddy who bought me anything i wanted. but nope im sh*t out of luck.

******but hey do you think anyone would actually wanna donate funds to help a fellow brother out ? ***** I'll set up a paypal account if anyone wants to donate (PM me )

 

Alot depends on what you consider is worth in dollars, a drive in the S. But with that you will need to consider how much of your life you would want to sacrifice for it.

I am pretty comfortable with 8% of my monthly take home to go to monthly payment in my current situation. But then again the s2k is only a weekend pleasure vehicle to me, so more than 10% would not sit well with my accountant.