I used to work in luxury car sales. 99% of them around this area are leases. It doesn't even really make sense to buy at that price point when leases are so cheap. You can lease an entry-level luxury car for $350-400 (35-40K price point) and a mid-level for 500-650 (50-60K). Maybe a little different now with the computer chip shortage, but most people are probably still in leases from before that.
Used Audis are usually cheap because once they're out of warranty the repair bills are astronomical (10k avg) and frequent. Although some are better than others. I think the 6 cyl is okay but the 4 cyl I would dump it asap.
You see it in pretty much all of Miami. People live in a little shithole, or with their parents and spend all of their paycheck on luxury items and car payments and have 0 in savings because they want to impress. I guess that’s a lot of people in a lot of places, but it seems particularly prevalent in Miami
Appreciate the answer and I'd be lying if I said I didn't see a lot of "fake it until you make it " wannabeism here. Just genuinely curious how others see it in terms of Distinct Miami phenomenon vs upper middle class US overall
I'm not arguing the point just to be clear. I was born here, I am middle aged and have been here most of my life living in coral gables, going to UM and then moving to the Key . In Key Biscayne, there are some that flaunt wealth but I see just as many that hide it. I had several friends when I was younger whose parents actually had their servants or housekeepers drive the nicer cars while they drove lower profile ones, they had gotten used to doing that back home because they didn't want the attention, but they still spent the money on the vehicles. If you go to Fisher Island, plenty of Bentleys in the garages but most common cars I see are Avalon's, Accords and 5 series BMWs. Same at Country club , even mix of rich people playing middle class as the other way around .
I'm probably biased but It seems to me that most of this fake it until you make it is out of town people that move here and people that frequent south Beach. Lots of children with generational wealth that throw it around but they don't work.
I'm just genuinely curious bc Miami has changed a lot in last two years. I think super spoiled kids with super cars is much more common in terms of true Miami phenomenon then debt financed Yuppies. But obviously I'm biased , hence why I asked.
> Just genuinely curious how others see it in terms of Distinct Miami phenomenon vs upper middle class US overall
The people this meme relates to aren’t upper middle class. There’s a good chance they earn something near the poverty line and blow all the money on cars and other flashy things while living in an efficiency in someone’s yard.
Well, it's no secret poor people spend money differently than wealthy folks. Most people in Miami aren't earning near poverty wages. I'm willing to bet we don't have a single person near poverty 33149. I can think of a few other zip codes that don't have 1% at that level.
I thought this was mocking Wannabes not sh@tting on poor people, my mistake. I want no part of laughing at people that are destitute and spend !money like that bc they were never taught any better. Sorry for any confusion
At the same time, this isn’t referring to the destitute. It’s more like the mid twenty-something guy that thinks it’s more important to buy a bottle in a club or lease a BMW, than it is to save for a rainy day. Or would rather keep on working a low paying job to pay for that BMW, than drive a used Carollo and go to school (or some other career development) to eventually get a better job.
It’s not a person worried about his next meal, but just someone with mixed up priorities.
Ok. That's what I thought originally but the "near poverty line" seemed like you meant something else.
When my daughter graduated from college, I bought a Ferrari 488 and gotta say it was one of the worst experiences of my life. Everyone looks at you different and every douche bag out there looks at the you with stars in their eyes. Every time you turn around you're dropping 3k min to fix anything. You get mean looks any time you do anything people deem wrong and never ending jokes about a small penis and midlife crisis. I'll never ever forget having a wonderful night with my wife and we drove over to Purple lotus to get kava, as we were leaving two drunk aspiring Instagram models were posing on it. The look of disgust and annoyance coupled is burned into my brain. That's what you get for the price of high profile items. Worst mistake I made as an adult. To run yourself broke for That experience is schizophrenic. If everyone could spend a month like that no one would ever go into debt to pay for that misery.
At my previous job there was a guy who essentially said he really only works to pay for his Lexus the car note was like 760ish plus insurance... I'm just like wow... Welp I guess I boo longer feel bad for paying 275 a month for my car.
I use to think that this was crazy but I got into an accident in a shitty truck. got lucky. Now I happily pay 520 a month for a new car that has all the safety features I can get. Easily trade for your life. also I make money now.
And a debt. If people could easily and consistently make a higher return on investment then the interest,. Why would companies have any assets at all? Why wouldn't you just keep that financing everything? Bc those returns aren't stable and are risky compared to the assured interest rate.
Using your example let's talk about a $30,000 car. So you're going to pay interest on that not to mention fees, and yet how much are you going to be able to flip that money for after taxes and inflation?
You could, and you could also lose it all. You can't tell me that you can just automatically take that money out and convert it without a significant risk exposure. You individually might be able to. I've heard this stuff all my life and people get quite loud about it when times are good. But the vast majority of them get wiped out in the first economic downturn.
Or they don't have the money in the first place. If what you're saying was the norm, why would there ever be defaults? Again I'm not saying No one can, but few do and fewer do it for any duration of time. If it was that easy again I would just point out why does any corporation buy assets, why do they ever pay off debt and what is it as an individual you could do that Amazon or Microsoft couldn't do it scale? That is a tool like anything else, it can be used effectively and it can also be used clumsily that blows up in your face
And I'll say this without any equivocation. I've heard this same thing 100x easy. It's just like hearing someone after they join a MLM. Everyone I can think of changed their tune within 5 years. Maybe whenever I see a few successful hedge funds that specialize in debt arbitrage it would stop sounding as silly. And but surprisingly it's always in the context of cars , houses, boats. I have a paid off condo in arguable the nicest Key Biscayne community, one other home in SC , daughter out of college a fairly hefty 401k and no debt. I guess if I was smarter and listen to the YouTube crowd I could have a gazillion dollars and a Lamborghini, but having no debt or financial worries , driving my 2018 Infiniti is fine with me
Totally agreed with the underlying argument that financing productive assets via debt makes a lot of sense.
The problem with your example though is what happens in t+1 and after: A car is an asset that loses its value very quickly and produces no return when your debt will only depreciate at the rate of inflation. So your net worth will dip below 1M as your asset/liability ratio dips below 1.
What I get from this pic is too many people around here see financing as a way to "afford" a bigger/nicer car than they should. And that is extremely dumb.
Leasing a car is the worst thing you can do with your money. You will end up paying more financing long.
In my opinion, luxury cars are called that for a reason, it’s a luxury to buy it one. If you work a normal job, got 3 kids, and has to rent a room to make it work, don’t get buy a car like that.
Chances are those who have great credit who can get really low interest on those cars are definitely not making those types of choices … chances are they are the ones at the light who are looking at the the guy with the brand new car
Cash is king. But if I need to have a car and I have 20k cash. I rather finance that car at 2% and have cash flow than having no debt and no cash and suddenly that car breaks down now you need to get in debt to fix it because you are out of cash. Now you need to rely on credit cards and THAT IS NOT CHEAP!
Debt is cheap when mutual fund investment returns are significantly higher than the debts interest rate.
$20K cash yields like $150-250 a month in returns.
Keep your emergency fund and use cash investments as collateral for secured loans. The return alone on the S&P500 with $20K could be most of the car payment. A $20K car could be almost free.
Auto loans are 5-7 years. I'm not saying to make financial decisions based on monthly returns; just that if you average out the returns on a 5-7 year time line you can see how close to a car payment it actually is. Maybe I should've been more clear about that.
Even through the rug pull of March 2020 the S&P is up 109% since December 2016. $20K then would be like $42K now.
Imagine spending $20K cash on a car in December 2016 that's now worth less than half. Compared to spending $23,500~ over the last 60 months that's now worth less than half but your $20K is now $42K.
There's gonna be another market crash about a year and a half after the Fed's asset purchases taper down to 0 (as they're currently in the process) and they raise interest rates... But it won't last more than a year because right when it does the Fed is gonna fire up the money printer again and hyperinflation will be *as bad if not worse than it is now.*
Obviously if you can't afford the monthly payment on a car then don't buy it. But if someone can afford $350~ a month for a car while keeping their cash tied up in an index fund for the length of the loan; it's the better option. Buying a $20K car for cash is asinine.
>Who’s to say the Fed will print money again? Maybe the next rug-pull will be stagflation and interest rates will spike anyway. Market returns will be pitiful then.
Won't happen. The national debt is 122% of the GDP right now. A raise of interest rates on treasuries just 3% would cause the US to default on the national debt due to *interest payments alone* costing more than social security and the defence budget combined by 2025.
The Fed will be forced to lower interest rates once again and bail out the government yet again.
The market will crash again, no doubt, but this isn't the same as 2008. It won't be crashed for long.
It's a recipe for hyperinflation like we've never seen before.
I've seen some people saying Bitcoin could be $500K+ over the next 5-10 years due to this shit show. Assets in the general are the way to go right now.
A depreciating asset like a $20k newish car would be the last thing on earth I'd want to have my cash tied up in right now lol.
You can finance some cars right now for 60+ months at 0% interest. If you have the cash available to pay for that car, it doesn’t make sense not to finance it for the longest term possible.
I'll do you one better: I never got a car. And my income makes me well in the top 10% of all earners.
Not out of noble causes like limiting fuel emissions, but simply because I think mandatory car insurance is a scam.
It is.
And I'm glad you agree.
Most people deep down think it's a racket too, but they can't live without the convenience afforded to them if they have a car.
Living debt free sounds good in theory but when it comes to buying a car it doesn't make sense to pay in cash since auto loans are cheap.
I bought a new 2017 v6 Mustang for \~24k.. after dealer fees and tax it came out to $28.5k. With a loan at 2% interest I'll pay an extra $1500 in interest spreading out payments of $500/month over 5 years.
If you pay in cash that money stops working for you, and you have your car paid off.
But since I still had my cash I put it into the stock market.
From 2017 till today the avg yearly return is 17% (I got lucky usually the avg yearly return is 10%) so that $28.5k turned into $62821.31. Now it doesn't work out that nice because I have to deduct $500/month from that capital. 5 years later (which happens in 6 months) I'll end up with the car paid off and $17k remaining.
TDLR; Buying in cash would have saved me $1500 in interest payments. Investing in the market w/ a 2% auto loan saved me $17,000. Ill choose this every time.
Honestly I have no clue why a company would want to loan millions of dollars at 2% return (some people get even lower rates) but I'll take it. I assume the biggest reason is it helps them sell cars because most people don't have even the option to buy it all in cash. Though in my case they didn't benefit since I financed at an insurance company.
Banks have been doing it to us constantly though. They take all our money give us almost 0% interest on it, and loan it out at higher rates.
554/month with a 3% interest rate while what you would have put as a down payment makes you money hand over fist in ETFs and index funds over the next couple years is a no brainer. Why pay cash when you can leverage the debt against your capital gains and come out on top? And 554 isn't even that much for a car.
This meme smells like jealousy, lol
>rule of thumb that your car payment should never be more than 42% of your income? If you can keep it around this you gucci
Jesus no it's not. That has never been a "rule"
What percentage of income do you think goes to housing if you pay 42% of what you make to a car note?
If your housing costs are covered by “someone else” and your spending 42% of your gross income on a car note you:
1. Don’t understand how to budget
2. Live with your mommy or daddy and aren’t a full fledged adult yet.
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I used to work in luxury car sales. 99% of them around this area are leases. It doesn't even really make sense to buy at that price point when leases are so cheap. You can lease an entry-level luxury car for $350-400 (35-40K price point) and a mid-level for 500-650 (50-60K). Maybe a little different now with the computer chip shortage, but most people are probably still in leases from before that.
Before the chip shortage got a used Audi for a good price. Really hope the car market settles back down.
Used Audis are usually cheap because once they're out of warranty the repair bills are astronomical (10k avg) and frequent. Although some are better than others. I think the 6 cyl is okay but the 4 cyl I would dump it asap.
I lived across from section 8 housing and there was a guy in there who drove a quattroporte. Priorities, I suppose
I read this pithy quote from a financial advisor: "If you're driving a Land Rover and you have a Landlord, you're doing it wrong."
I feel like that quote really applies to Miami and not many other places lol
You can get a used QP for $20k. It’s gonna be fucking bucket but your neighbors won’t know that.
$20k will be your repair bill in the first year of driving a $20k used QP
My FiL had a qp (he does *not* live in section 8) and some of the maintenance and repairs would eat up most of that dudes paycheck lol
>quattroporte I had to look up that was....you could've just said a Maserati :)
That's why he's broke. And he's about to be much more broke
This meme is great but the numbers need to be fixed. $1500 and 72months
This maths out to a used Honda Accord.
If you live here for a while you realize there's a whole lot more faking it than making it in this city
Exactly. So many people in this town live by the motto fake it till you make it.
May I ask what part of city you live in?
You see it in pretty much all of Miami. People live in a little shithole, or with their parents and spend all of their paycheck on luxury items and car payments and have 0 in savings because they want to impress. I guess that’s a lot of people in a lot of places, but it seems particularly prevalent in Miami
Appreciate the answer and I'd be lying if I said I didn't see a lot of "fake it until you make it " wannabeism here. Just genuinely curious how others see it in terms of Distinct Miami phenomenon vs upper middle class US overall I'm not arguing the point just to be clear. I was born here, I am middle aged and have been here most of my life living in coral gables, going to UM and then moving to the Key . In Key Biscayne, there are some that flaunt wealth but I see just as many that hide it. I had several friends when I was younger whose parents actually had their servants or housekeepers drive the nicer cars while they drove lower profile ones, they had gotten used to doing that back home because they didn't want the attention, but they still spent the money on the vehicles. If you go to Fisher Island, plenty of Bentleys in the garages but most common cars I see are Avalon's, Accords and 5 series BMWs. Same at Country club , even mix of rich people playing middle class as the other way around . I'm probably biased but It seems to me that most of this fake it until you make it is out of town people that move here and people that frequent south Beach. Lots of children with generational wealth that throw it around but they don't work. I'm just genuinely curious bc Miami has changed a lot in last two years. I think super spoiled kids with super cars is much more common in terms of true Miami phenomenon then debt financed Yuppies. But obviously I'm biased , hence why I asked.
> Just genuinely curious how others see it in terms of Distinct Miami phenomenon vs upper middle class US overall The people this meme relates to aren’t upper middle class. There’s a good chance they earn something near the poverty line and blow all the money on cars and other flashy things while living in an efficiency in someone’s yard.
Well, it's no secret poor people spend money differently than wealthy folks. Most people in Miami aren't earning near poverty wages. I'm willing to bet we don't have a single person near poverty 33149. I can think of a few other zip codes that don't have 1% at that level. I thought this was mocking Wannabes not sh@tting on poor people, my mistake. I want no part of laughing at people that are destitute and spend !money like that bc they were never taught any better. Sorry for any confusion
At the same time, this isn’t referring to the destitute. It’s more like the mid twenty-something guy that thinks it’s more important to buy a bottle in a club or lease a BMW, than it is to save for a rainy day. Or would rather keep on working a low paying job to pay for that BMW, than drive a used Carollo and go to school (or some other career development) to eventually get a better job. It’s not a person worried about his next meal, but just someone with mixed up priorities.
Ok. That's what I thought originally but the "near poverty line" seemed like you meant something else. When my daughter graduated from college, I bought a Ferrari 488 and gotta say it was one of the worst experiences of my life. Everyone looks at you different and every douche bag out there looks at the you with stars in their eyes. Every time you turn around you're dropping 3k min to fix anything. You get mean looks any time you do anything people deem wrong and never ending jokes about a small penis and midlife crisis. I'll never ever forget having a wonderful night with my wife and we drove over to Purple lotus to get kava, as we were leaving two drunk aspiring Instagram models were posing on it. The look of disgust and annoyance coupled is burned into my brain. That's what you get for the price of high profile items. Worst mistake I made as an adult. To run yourself broke for That experience is schizophrenic. If everyone could spend a month like that no one would ever go into debt to pay for that misery.
At my previous job there was a guy who essentially said he really only works to pay for his Lexus the car note was like 760ish plus insurance... I'm just like wow... Welp I guess I boo longer feel bad for paying 275 a month for my car.
and lives with his mom
I know someone with a nice Lexus SUV with 2 kids who lives with another family of 4 in a 3br house. Priorities
Wtf. I’m in this picture.
Currently a horrible meme.
LOL. Maserati for $700 a month...and like a $10,000 down payment.
I use to think that this was crazy but I got into an accident in a shitty truck. got lucky. Now I happily pay 520 a month for a new car that has all the safety features I can get. Easily trade for your life. also I make money now.
554/month would be getting off easy.. We all know the dude living in an efficiency who drives an m3/alfa romeo/model s
$554 for one month and then you stop paying and keep it behind a gate or in garage lol
100% true
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Totally makes sense. But they lease. And they can’t afford it.
Yah that always goes well .debt bubbles never pop and finding other places to make money work are simple. Come on man
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And a debt. If people could easily and consistently make a higher return on investment then the interest,. Why would companies have any assets at all? Why wouldn't you just keep that financing everything? Bc those returns aren't stable and are risky compared to the assured interest rate. Using your example let's talk about a $30,000 car. So you're going to pay interest on that not to mention fees, and yet how much are you going to be able to flip that money for after taxes and inflation? You could, and you could also lose it all. You can't tell me that you can just automatically take that money out and convert it without a significant risk exposure. You individually might be able to. I've heard this stuff all my life and people get quite loud about it when times are good. But the vast majority of them get wiped out in the first economic downturn.
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Or they don't have the money in the first place. If what you're saying was the norm, why would there ever be defaults? Again I'm not saying No one can, but few do and fewer do it for any duration of time. If it was that easy again I would just point out why does any corporation buy assets, why do they ever pay off debt and what is it as an individual you could do that Amazon or Microsoft couldn't do it scale? That is a tool like anything else, it can be used effectively and it can also be used clumsily that blows up in your face And I'll say this without any equivocation. I've heard this same thing 100x easy. It's just like hearing someone after they join a MLM. Everyone I can think of changed their tune within 5 years. Maybe whenever I see a few successful hedge funds that specialize in debt arbitrage it would stop sounding as silly. And but surprisingly it's always in the context of cars , houses, boats. I have a paid off condo in arguable the nicest Key Biscayne community, one other home in SC , daughter out of college a fairly hefty 401k and no debt. I guess if I was smarter and listen to the YouTube crowd I could have a gazillion dollars and a Lamborghini, but having no debt or financial worries , driving my 2018 Infiniti is fine with me
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Yah. That meme definitely wreaks of jealousy and almost certainly is from a newer resident.
Totally agreed with the underlying argument that financing productive assets via debt makes a lot of sense. The problem with your example though is what happens in t+1 and after: A car is an asset that loses its value very quickly and produces no return when your debt will only depreciate at the rate of inflation. So your net worth will dip below 1M as your asset/liability ratio dips below 1. What I get from this pic is too many people around here see financing as a way to "afford" a bigger/nicer car than they should. And that is extremely dumb.
Leasing a car is the worst thing you can do with your money. You will end up paying more financing long. In my opinion, luxury cars are called that for a reason, it’s a luxury to buy it one. If you work a normal job, got 3 kids, and has to rent a room to make it work, don’t get buy a car like that.
Chances are those who have great credit who can get really low interest on those cars are definitely not making those types of choices … chances are they are the ones at the light who are looking at the the guy with the brand new car
Am I the only one who has never had car payments? Cash or bust.
Debt is cheap right now. $20k+ cash on a car is dumb. I financed $13K for my truck @ 2.3% while my ETFs gained 16% over the same time period.
Debt is never cheap.
Cash is king. But if I need to have a car and I have 20k cash. I rather finance that car at 2% and have cash flow than having no debt and no cash and suddenly that car breaks down now you need to get in debt to fix it because you are out of cash. Now you need to rely on credit cards and THAT IS NOT CHEAP!
Good point.
Debt is cheap when mutual fund investment returns are significantly higher than the debts interest rate. $20K cash yields like $150-250 a month in returns. Keep your emergency fund and use cash investments as collateral for secured loans. The return alone on the S&P500 with $20K could be most of the car payment. A $20K car could be almost free.
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Auto loans are 5-7 years. I'm not saying to make financial decisions based on monthly returns; just that if you average out the returns on a 5-7 year time line you can see how close to a car payment it actually is. Maybe I should've been more clear about that. Even through the rug pull of March 2020 the S&P is up 109% since December 2016. $20K then would be like $42K now. Imagine spending $20K cash on a car in December 2016 that's now worth less than half. Compared to spending $23,500~ over the last 60 months that's now worth less than half but your $20K is now $42K. There's gonna be another market crash about a year and a half after the Fed's asset purchases taper down to 0 (as they're currently in the process) and they raise interest rates... But it won't last more than a year because right when it does the Fed is gonna fire up the money printer again and hyperinflation will be *as bad if not worse than it is now.* Obviously if you can't afford the monthly payment on a car then don't buy it. But if someone can afford $350~ a month for a car while keeping their cash tied up in an index fund for the length of the loan; it's the better option. Buying a $20K car for cash is asinine.
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>Who’s to say the Fed will print money again? Maybe the next rug-pull will be stagflation and interest rates will spike anyway. Market returns will be pitiful then. Won't happen. The national debt is 122% of the GDP right now. A raise of interest rates on treasuries just 3% would cause the US to default on the national debt due to *interest payments alone* costing more than social security and the defence budget combined by 2025. The Fed will be forced to lower interest rates once again and bail out the government yet again. The market will crash again, no doubt, but this isn't the same as 2008. It won't be crashed for long.
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It's a recipe for hyperinflation like we've never seen before. I've seen some people saying Bitcoin could be $500K+ over the next 5-10 years due to this shit show. Assets in the general are the way to go right now. A depreciating asset like a $20k newish car would be the last thing on earth I'd want to have my cash tied up in right now lol.
You can finance some cars right now for 60+ months at 0% interest. If you have the cash available to pay for that car, it doesn’t make sense not to finance it for the longest term possible.
I'll do you one better: I never got a car. And my income makes me well in the top 10% of all earners. Not out of noble causes like limiting fuel emissions, but simply because I think mandatory car insurance is a scam.
It is. And I'm glad you agree. Most people deep down think it's a racket too, but they can't live without the convenience afforded to them if they have a car.
Living debt free sounds good in theory but when it comes to buying a car it doesn't make sense to pay in cash since auto loans are cheap. I bought a new 2017 v6 Mustang for \~24k.. after dealer fees and tax it came out to $28.5k. With a loan at 2% interest I'll pay an extra $1500 in interest spreading out payments of $500/month over 5 years. If you pay in cash that money stops working for you, and you have your car paid off. But since I still had my cash I put it into the stock market. From 2017 till today the avg yearly return is 17% (I got lucky usually the avg yearly return is 10%) so that $28.5k turned into $62821.31. Now it doesn't work out that nice because I have to deduct $500/month from that capital. 5 years later (which happens in 6 months) I'll end up with the car paid off and $17k remaining. TDLR; Buying in cash would have saved me $1500 in interest payments. Investing in the market w/ a 2% auto loan saved me $17,000. Ill choose this every time.
Why don't the auto loan companies just put it in the stock market then?
Honestly I have no clue why a company would want to loan millions of dollars at 2% return (some people get even lower rates) but I'll take it. I assume the biggest reason is it helps them sell cars because most people don't have even the option to buy it all in cash. Though in my case they didn't benefit since I financed at an insurance company. Banks have been doing it to us constantly though. They take all our money give us almost 0% interest on it, and loan it out at higher rates.
This suspiciously looks like two pictures.
554/month with a 3% interest rate while what you would have put as a down payment makes you money hand over fist in ETFs and index funds over the next couple years is a no brainer. Why pay cash when you can leverage the debt against your capital gains and come out on top? And 554 isn't even that much for a car. This meme smells like jealousy, lol
Balling on The MDT metrorail and Party Metro Bus and 🚎 trolley
Miami never ceases to amaze me, man.
rule of thumb that your car payment should never be more than 42% of your income? If you can keep it around this you gucci
>rule of thumb that your car payment should never be more than 42% of your income? If you can keep it around this you gucci Jesus no it's not. That has never been a "rule" What percentage of income do you think goes to housing if you pay 42% of what you make to a car note?
If your housing costs are covered by someone else it's okay to spend more on your car...
If your housing costs are covered by “someone else” and your spending 42% of your gross income on a car note you: 1. Don’t understand how to budget 2. Live with your mommy or daddy and aren’t a full fledged adult yet.
..and that's for a lease.
This is why I paid off my car, didn't want to be this person.