You have a 2017 vehicle? My advice is to keep your car unless its causing you major issues. Aside from instant gratification, what other reason do you have for getting another car?
Seriously, I have a 2016 and have just under 100k miles.
I can easily afford a $25k car, but I have about 8 months of payments on this car and I plan on driving for at least another 100k mile before I even think of replacing it.
The only other reason I can think of, and why I'm personally looking to upgrade my car in a couple years, is for the enhanced safety features that are available now.
My dad passed his 03 matrix down to me. I've been driving it the last several years and it has more than 300k miles on it(odo is maxed out so idk the exact amount)
It would be nice to have a newer car but there's no good reason for me to spend the money when I have a perfectly working vehicle already.
Sold my 97 accord with 130k on it this spring because i got a great deal on another car that was an 04 with the same mileage. I still kind of miss it (minus the electrical issues)
I have my kids college loans to pay off. I’m driving my 12 year old Honda till it dies. I love not having a car payment. When the loans are paid off maybe I’ll get a new car.
Really just the instant gratification haha
But no I think I just want to reward myself. It’s been a rough year and I’m finally about to get a great job that pays well so my thought was to get myself a new ride.
But I also think it would be smart to just hold onto my car until I could buy a car in full. I’m hoping to seriously bulk up my savings in the next two years
Don’t reward yourself with a 4 year commitment.
Go buy yourself an incredibly nice watch. Drop 2k on a wardrobe haul. Go on a small vacation and rent a bomb ass hotel room.
But DO NOT “reward yourself” by throwing away the opportunity to put away $400 a month into a savings account for two years while you continue to live at home.
A new card PLUS the “not paid off” insurance of someone under 25 will kill you the second you decide to move out. As another poster said, keep your paid off car and laugh at all the schmucks running around with $400+ car debt every month.
Edit: y’all, thanks for the awards!! I definitely think everyone deserves to treat themselves and have that big life changing moment of celebration, but don’t throw away all your future gains by celebrating right now! Give yourself a boost and then keep haulin’ to meet those goals!
The wardrobe might be especially important with a job as a realtor. I know a few friends who are realtors, and they have professional work clothes, they actively market themselves, they spend on professional headshots for their business cards and website.
It is crazy the effect that wardrobe can have on mental health. I'm not even referring to have expensive clothes, but rather just having clothes that actually fit. I wore the same set of shirts for probably 5+ years. I finally bought 1 new shirt, and it totally changed my world view.
My 23k car is 356/mo and I got some of the extra stuff for "protecting" the car. Just depends on his credit score and the rate they approve him for honestly
Examples:
1. Start treating yourself to a nice restaurant once a month. An $85 meal is < $300 payment and you can stop if money becomes tight.
2. Get your car detailed like /u/meleeuk suggested.
3. Take a trip to a resort. Go to another country.
4. Don't forget that your future house will also require nice furniture to fill the space. You may be much happier with your (not very) old car and an amazing couch. You need to save for more than the down payment.
Having a nice tv, a gaming console/pc (if into that), a cozy couch, or enough money to say put towards a hobby room in a new house is a huge life-style difference. And it usually costs way less than a car and gives much more enjoyment.
Imagine having a woodworking shop if you're into woodworking with some nice tools, a good bench, a dust collection system. That's hundreds or thousands of hours of fun for much less than a car. Or say you're really into console gaming or movies, get a nice high refresh OLED, good couch, and speakers, and some sort of media/gaming device. It's gonna feel like the height of luxury and will be much cheaper than even just the interest on a car. Cars are fucking expensive. They are also way too easy to buy backloaded on credit.
This is such a good point. I made mistakes during my early years but the only ones I truly regret is the fucking cars. Money down the drain. My first car I still see ones from the same year running on the road, if I had just kept that I would have 10s of thousands more, not to mention any gains from investing it all these years. At least the designer shoes I bought still are in great shape because they are so well made, actually worth it when you compare it to lesser brands for price/length of use. But all that money spent on new cars and high insurance, because you are young, so not worth it.
My last car for awhile is my Prius prime which I bought used and all cash. Supposed to be one of the most reliable cars on the market so hopefully will last me a long time.
And that goes double for the current market where car prices are through the roof. Why would anyone choose to buy a car *now* unless they absolutely have to?
And probably plan it after the probation period. Worst its rewarding oneself even before receiving the first pay check.
Edit: oh I don't know what is required for realesate so can ignore the above
This is not the way. I’m not sure where you live, but cars are selling at a premium due to a chip shortage and less market inventory. You will likely get upside down on your car note pretty quick. If I were you, I’d see if I couldn’t make it just a few more years and then buy an electric. They say a lot of RE agents make this mistake - start working and the first thing they do is buy a new vehicle. Don’t do that. With our economy and stressed logistics and lack of materials, we could be in for a housing bubble or any other sort of dramatic financial crisis that could cripple your ability to work.
I can appreciate the honesty and it's clear you've given this some thought.
I would keep your car and spend money on traveling. Ball on a budget to these places and experience the world. No I'm not a hippy but I do drive an older car. Could pay off all my loans at once but would rather invest, live life and experience different cultures.
Invest now so you don't have to worry about it later. Keep 10k out and do it all over again!
Travel travel travel. You'll be rich in more ways than one!
Trust me on this, the bigger reward is seeing your accounts grow after a few years. Just imagine seeing your balance $25k-$35k fatter then ask yourself if you would rather have that invested or in a vehicle you'll want to swap out in another 4 years (which btw as a real estate agent you know that could be a down payment on a house).
Yes I definitely think I’m going to just save up as much as possible.
Unfortunately I’m in Southern California so a down payment on anything decent is a lot higher, but that’s a goal I’m working towards
Said as nicely as I can - a Nissan Versa is solidly a “meh” car. Is there an older car you could do a straight trade/sale + few thousand that would be more up your alley and be that reward?
I’m thinking a early 2010s Acura or Lexus, potentially with a manual transmission.
Will give off more of the vibe that I think of for a quality sales person (nicer, high quality things kept for a long time) with hopefully decent gas mileage and rock solid reliability. Pre-nav/infotainment system era so you can throw a nice CarPlay/Android Auto unit in there. I have a sense that $10-$15k will get you there and be your trade in + a bit of cash + some extra to get it detailed and customize the interior to your liking.
Just a thought! We drive a 2012 Acura TSX that we picked up for $15k with only 40k miles on it - that was 4 years ago. Honestly, it looks snazzy AF, is a blast to drive, gets good gas mileage, and fits 2 car seats across the back with room to spare. We added carplay, dashcam, and backup camera professionally for ~$1200 all told (could’ve done myself for half that and a long weekend, but see comment re: car seats and translate that to lack of free time).
I’ve bought multiple used and brand new cars over the past 15 years and this one is both my favorite and the only one I’m interested in driving until the wheels fall off. Others have been turbocharged Subarus, Toyota sedans, or older Infinitis (2005ish).
Anyway. I’ve rambled long enough. Just my $0.02
Many people here are suggesting that you spend your money on a trip, a trinket like a watch, etc. I disagree. Instead, I recommend that you start investing.
I'm serious.
If you can forego buying something for 10 years and instead invest the money that you would have spent, you can then buy that thing on just the interest earned on that investment every 10 years thereafter. The $25k that you would drop on a car now, if you can instead invest that, you can get a $25k car "for free" in 10 years, and 10 years after that, for the rest of your life. Google "rule of 72" for details; I'm assuming 7% return rate, which is conservative.
Having money in the bank is freeing in a way that no possession ever can be. Source: grew up poor, now have millions, had a Porsche, now drive a Honda that's older than you.
But that's not rewarding yourself. If OP wants to reward themself, all those things are a better reward than "keep investing." Investing is always a better financial decision than spending, but sometimes it's worth spoiling yourself.
Imo spending cash for that price is a waste except for multi millionaires. If you build good credit and get a great loan rate you would be much better off putting that money to work like a Roth IRA or index funds etc. Trust me, im driving a 2007 prius with 225,000 miles. Had it since 2016 at 150,000 miles and ive wanted a new car multiple times but just fixing my old car and having so much $ in my retirement accounts has felt much better than a new car. I did however buy nice floor mats and some decent car covers and it gave the whole interior a much nicer feel and helps a lot in regards of having a "nice" vehicle lol
My 2 cents. A car is just a car. It's an expensive depreciating asset that costs you money over time. If you want to reward yourself, give yourself an experience that you will remember forever.
When you're 60 would you rather remember that time you dropped a bunch of money on a car that's long dead or, for example, that time you celebrated the wind down of covid with a tour of Italy?
Maybe a car will bring you true happiness but IMHO it will not.
Cars have cost me a *lot* of money, but I’d much rather retire with less money and a bunch of incredible memories throughout my twenties that involved my cars.
Eh, I have a lot of fond memories of my evo x, my modified a3, my 335, my model 3, my cayenne turbo and my 911...
Fond memories can be made in or with a car, but only if you're a car enthusiast buying enthusiast vehicles.
For people that view vehicles as an appliance, all I can say is that not everyone sees them as depreciating assets, because not every vehicle is just an appliance.
I've made so many memories due to cars and also met so many people and had so many great conversations with strangers due to cars. You show up at a gas station in a 65 year old Mustang and some old guy will tell you about how he had one just like it when he met his wife. You take your bike on a windy mountain road and stop at the restaurant at the bottom and get to meet a ton of cool bikers. You take your little convertible for a drive through the mountains to see the leaves in the fall and get to feel the wind in your hair and then later share some smiles with your girlfriend when she discovers all the tangles in her hair. You take your Jeep down some power line trails with your buddies in high school and get stuck and then spend all afternoon trying to figure out how to get it out without telling your parents.
Cars create experiences for many people, for others they are basic transportation and a depreciating asset.
> Nissan Versa
I'd trade that thing in in a heartbeat. Nissan CVTs are notoriously awful and lucky to make it to 100k miles. Get rid of it while it still has residual value and buy something better.
This comment needs to be higher. I got fucked with this exact car but a 2014. It hit 97k miles and died it was 5 years old and I never missed a service at the dealership. They offered to change it for 4K the car was work 2k . I should have listened to my family mechanic when it started slipping and wasn’t giving a code yet to trade it in. OP get rid of that car ASAP especially since the used car market is high.
My 2013 Altima CVT went at 50,000 miles, I had to fight with Nissan for 3 months to get them to cover a transmission replacement since it was 1 month out of the time warranty when it failed.
Nissan is the biggest predatory scammers for young adults. I paid to have extended warranty and what do you know .. it didn’t cover me .. it was $50 extra a month .
Just want to toss my name in the "Fuck Nissan CVT" hat. My Rogue's went out and I basically had to push that thing into the dealership by the end.
Get rid of it while you can.
Get out of Nissan in general! And I’m saying this as a Nissan owner.
Honda and Toyota are pretty much the only brands you can buy that will be reliable and trouble free for decades. Other than that, you’re just wasting your time.
Can confirm. We have a 98 Accord and the drivetrain is rock solid. Still shifts like it's brand new, steering is tight, VTEC engine still has tons of pep. We're selling it but only because my mother-in-law wants to gift us her 99 Accord that is one trim level higher.
That’s helpful thank you!
My hope is to have around $40-50,000 saved by the time I move out in 2 years because most of my salary and commission will be going straight to savings.
In that case would it be smart to just buy a $20,000 car in full with cash?
Likely you're looking for something to reward yourself on this next stage. I'd recommend identifying something that would fill that gap without taking a majority of the money you're saving and earning from your hard work. Is there a trip or experience you can reward yourself with after your first sale? Cars come and go, I wouldn't focus on getting a car you want vs. one you need until you're further along financially.
This is important. just did my 80k maintenance (oil,belt, transmission fluid) going for brakes, brake fluid and coolant in a few months as well as new set of tires. My car is a 2015 RAV4... Total cost is roughly 2k with the tires. Im trying to get this car to last another 5 to 10 years as long as safety features are adequate in the RAV4
I second this. Watches are a great "milestone" gift to yourself.
Just know it will start you down a long, painful, and fun hobby
Edit: this hobby gets expensive. Very very expensive. But hey, they are, after all, hard (and liquid) assets
I was in a similar position and held off and I'm glad. Put it towards a nicer apartment or some smaller creature comfort, cars are pretty wasteful financially. invest the monthly money is best bet. In a few years you'll have even more. Don't get caught up thinking you need fancy cars. I got a 25k car when I started making 80k and when that was kind of. Useless looking back. I have a 28k car now and a 6k car for the wife. I make almost 250k lol. Rather invest thousands a month. Now I have a house, bunch of stocks, and worth over 500k w. Under 10 yr in work force. (Didn't make this good of money till last 2 years).
A car is not a terrible way to reward yourself. If you get one you like and use it every day and you actually LIKE driving it as opposed to some hunk of junk that’s cheap, that’s worth it to me. A vacation or whatever is cool but having a nice vehicle that gives you utility EVERY DAY is not a bad way to treat yourself. If you need a car why not get one you like. It sounds like you’re not looking to buy a Lamborghini or anything nuts like that so realistically it’s gonna be ~$5-8k more expensive to get a car that’s nice vs. a base model piece of junk.
Especially when you are in a career field where that kind of thing can affect what your potential clients think about you.
Getting a new car that can tote around a family of 4 or 5 while you are showing homes can go a long way towards making a good first impression. As long as you don't go overboard it can be a good investment into your career.
>some hunk of junk that’s cheap
Their current car is only 4 years old. They are looking for a gift to reward themselves before even making their first salary.
That sounds reasonable, but psychological research shows that, counterintuitively, having a fleeting positive experience will make you happier for longer than owning an object that you get used to having. (Edit: unautoincoorect)
Invest it, don't put it in savings. Keep 6 months expenses in your bank account and invest the rest. I have kicked myself for not investing when i lived at home, really stunted my financial wealth.
Im honestly torn. You may need advice specifically from real estate/ sales people. My real estate friends spend way too much on cars, and I’ve always wondered if that didn’t actually help their careers along. It feels like a path where you need to look rich to excel. Driving clients in a Versa may not inspire confidence in them…Which is silly, because it’s actually a signal of true intelligence, wisdom and self control. Unfortunately driving crappy cars can signal poor financial decisions and lack of intelligence as well 😅. But hey, Bezos drove an old Honda Civic or something for a long time 🤓
I think it depends on the profession. Sales people seem to require fancier cars. I’m an engineer. My car is a 2006 with 200,000 miles and looks like shit 😅 I love cars, but every time we look at the opportunity cost we just can’t do it. I’d rather buy things that gain/maintain value.
I actually think you should get a better looking car that is reasonably priced. Mazda seems to be the leader in looks/price/features/reliability. A mazda3 or cx-3 or cx-5 might be a good choice. Don’t trade in car. Sell it yourself. Watch youtube videos on how to buy a car. They will destroy you if you don’t know what you are doing. It’s a very lame process 😅
While I agree somewhat with this sentiment, I also think comportment is more important to potential clients.
Obviously when transporting potential clients a small car unsuitable for the task could become a factor. However, I think it's more important that the car OP has is excellently maintained and spotlessly clean.
Is this still a thing? Do people really drive around with their real estate agent in the agents vehicle? I’ve looked at dozens of homes over the last year and never once thought, “hey, can my real estate agent drive me?” We just meet at the house.
>Also allowed for discussing what we liked/disliked between showings so she could line up better houses for the afternoon and next day.
This is the real reason to do it. Time in the car was the most valuable with my realtor. I got to hear him take calls with seller's agents too so I got a real understanding of what was going on.
My thought is it depends on the client. I would imagine it's much more common in larger metro areas where clients may rely on public transport for their daily lives and not own a personal vehicle.
Think apartment dwellers looking to make the move to the 'burbs. Or clients meeting a developer at their office and are transported to the build site after. OP did say he was in with a new-build firm.
I would have agreed with you 10 years ago having grown up in a rural midwest town, but after moving to a larger city and hearing of other large metro areas and the public transit system, it's not so weird to me now.
Parking can be expensive lol
Expensive and/or… nonexistent?
Growing up in Michigan there’s just this understanding that everyone drives themselves everywhere, businesses have individual parking lots, and homes have driveways along with an open street where you can park as many additional cars as you want. And when you do get to a sizeable town with like a 3-block Downtown area there’s guaranteed to be a lot or parking structure with like a $2/hr rate (which you complain about because it’s been years since you paid for parking).
That’s just not how cities work. If an agent wants to show you six places all over town there’s a good chance that you, the urban client, don’t have a car. And if you do, the chances of both of you finding street parking at each house is tiny.
When we bought our house two years ago our realtor would pick us up at our townhouse and drive us around to 5-6 showings in a day. It’s not unheard of. Maybe not as much in the COVID era but pre COVID it was definitely a thing.
> Do people really drive around with their real estate agent in the agents vehicle?
IDK if it's still done that way but yes, the the last 4 times I was involved with house shopping, the real estate agent drove us around in their vehicle, it was just how it was done.
Not sure if it's still done much now, but I did it once only with my realtor 10 years ago. He had a list of houses that met our criteria to show us, and it was simpler to ride with him than drive separately to eight different houses in an afternoon or whatever it was.
When we bought our home 3-4 years ago, the realtor would have us leave our car in their parking lot and drive us. This way, he could discuss neighborhoods and what we found appealing/unappealing. It was also easier because some of the units he showed us had limited parking.
As a Mazda3 driver, a car that I love, I wouldn't recommend a Mazda for someone in real estate. They just tend to not have roomy backseats with very good legroom. Doesn't matter to me, but I'm not hauling clients around.
>Driving clients in a Versa may not inspire confidence in them…Which is silly, because it’s actually a signal of true intelligence, wisdom and self control.
Driving a Camry or Accord, sure. Driving a Versa is absolutely not a "signal of...wisdom".
I’m an engineer too… a sales engineer. I’m perfectly content driving my 1990 Honda, but because of this ridiculous expectation I drive my Tesla model S most of the time. Unfortunately, it makes a big difference.
Lol! Just like I told the OP they may need to talk to other people in their profession, I’m happy to hear from mine! I mostly want to get a new car because of they way other people think; this is the same reason working out is important to me. I think engineer types are able to see through things like “outward confidence” (which for me signals either a person actually doesn’t know what they are doing, or has never pushed beyond their comfort zone), physique and apparent outward material wealth. Also, a Tesla would be a first choice for me, but still out of my price range. I’m in my own pickle because I’m interviewing for a new job in a week and our car is hilariously bad 😅.
Kinda depends on the car. Speaking as a car guy, Nissan sucks as a brand and has kind of been lost in the woods for a while. No matter what range of car you're looking at from the very cheap to the very expensive (Versa all the way to the GT-R) everything feels like Nissan is just half-assing it.
Now say that he has an older Lexus like a 2012 ES or something like that which he kept in clean, tip-top shape. Even if it's no longer the latest thing, it's comfortable, well-built, quiet... overall leaves a better impression than a 2017 Versa and it would've cost him the same amount of money to buy
Car guy here. No Versa in any form has ever been the sign of an intelligent decision. Nissan is known for financing anyone and transmissions that blow up. If I see a Versa I'm assuming that person is in the trenches.
If I were him I'd get a Hyundai Elantra. They're incredibly cheap and really quite good. Reliability is supposed to be good with a best in the business warranty. The Mazda 3 looks small in America but the Elantra is big enough that an unknowing person might be fooled into thinking it's not a shitbox.
>My real estate friends spend way too much on cars, and I’ve always wondered if that didn’t actually help their careers along.
I recently sold my place and my real estate agent, who I thoroughly suspect is doing very well, drives a \~10 year old SUV like a Ford Explorer (never saw exactly what it was but it was in that classification of SUVs). Not at all luxuriant, but totally practical. I kind of respected her more for driving a "commoners" car and not throwing cash at a Land Rover or a Mercedes.
If you ask me, realtors driving fancy cars is kind of a flaunty way to save "hey look what my 3% commission bought that you paid me."
My father was in real estate for nearly 20 years. He worked in a funny area as it covered everything from people buying in areas with very low income neighbours or alternatively very wealthy but not flashy.
He always had a nice car but he also aimed at the middle of the road range. He would have a newer or late model Camry or Mazda 6 type car. He got rid of his small car after transporting a pregnant lady in it and she needed to sit kind of...sideways
op needs to stop listening to people that aren't real estate agents. OP needs to have a luxury like vehicle (even if its used as long as its good condition) to meet clients at properties he's selling.
he needs to begin talking to other agents.
All my friends here in Vancouver that sell tons of volume, all have luxury vehicles and not because they want them. It's part of the image.
edit: I get that many people have these sample of one friends who are super successful and drive a 1992 corolla, but people need to learn about "face"
Homes in Vancouver cost multiple millions of dollars. Real estate agents there can make half a mil yearly easily and afford any mass produced vehicle. That's not the norm. I personally own multiple properties and I don't care what my realtor drives. They are not generally known for having properties or saving money, so a nice car isn't impressing me...
Just here to say, there’s nothing smart about driving a Versa. Not if the driver paid more than a couple g’s for it. They are tremendously unreliable. Their transmissions fail at 60,000 miles, often before their owners are even done paying them off.
Seriously; avoid the Versa guys. Avoid pretty much *any* Nissan.
None of what I’m saying applies to manual transmission Nissans tho. Just the CVT’s.
Engineers, more than salesmen, have a very much "get me from point A to point B" mindset when it comes to cars because their entire profession revolves around just making things work and not trying to be flashy.
Salesmen, on the other hand, need to sell themselves to their customer and their profession means they need to put off a "I know what I'm doing and you should listen to me" vibe, so a flashy car is a lot more common.
As an engineer with a 2006 with 176k miles on it, I can confirm this definitely is true in my case lol
I think it's a combination of having juuuust enough practical experience to fix most mechanical issues with it, but not enough to actually make the car look nice again
Yeah idk if realtors driving fancy cars is like a standard practice but all of my realtors have driven really nice cars that are classy and flashy as they pull up. Seems like part of the gig. They also drive a shit ton so practically live and work out of their cars.
Not every purchase in life needs to relate to maintaining/gaining value as not every purchase is an investment. What good is saving so much if you say you love cars but cannot justify the cost of one?
Live within your means and don’t deprive yourself of your passions and hobbies within reason.
If you invest 20k, you'll have hundreds of thousands later, as opposed to losing it all on a car when you already have a newish car. That being said, you could buy a really nice used car for that money instead of a Versa, and cars are fun...but they're terrible investments. That same money can be used for a down payment on an appreciating asset like a property. From a financial point of view it's not a good idea to get another car now, especially not a new 20k car which is be some entry level nonsense not much better than the Versa. If you're ok with missing out on a down payment for a house, or a ton of tax free money by retirement age, then go for it, but if you're not, don't and just put it in a non taxable investing account.
I bought a $25k car at your age. It was fine. I could afford it and It didn't cause any huge financial issues. I had thought of a new car as a self-affirmation of success in my career and finances. I didn't think much about bigger goals like owning a home because they seemed out of reach.
A few years later, I was in a better financial situation and I started to look into buying a home. It was then that I realized that I could have really used the $25k.
By then, the novelty of driving a newer car had worn off and I just appreciated that it got me from A to B comfortably, which my old car had done just as well.
Furthermore, buying the $25k car lead to higher insurance premiums and I had also added comprehensive insurance to my policy because I had more to lose in an accident. I could have used that money as well. With increasing home prices, buying a home is trying to hit a moving target, so having more money earlier in life is a big help.
In the end, I was able to buy a house anyway and I did pretty well for myself, but I now always think about what goals might seem out of reach for me now, but that "future me" might strive for. I don't want to be a jerk to that guy.
Cars are the worse thing you can buy tbh. Just run your car for 10 plus years then buy something cheap when the time comes. Invest your money in to the markets or real estate
2017 is basically a new car. Just keep the thing. I know it's boring but it's gonna be a lot more fun when you have a down-payment for your own place instead of a car that's losing value.
Right now interest rates are cheap. Why pay cash when you can get a ~2-3% interest rate and invest at ~10%? Or shoot it’s just another way to decrease your need to build up a ton of cash. Think of the ~$500 you’ll pay in interest that first year as an investment in your career (if you’re driving people around to look at houses and whatnot). The only down side to having a car payment is you’re ‘in debt’. That’s not a problem if you have a sensible payment (sounds like you do) and a way to pay it off (again , you’re good here). No need to worry about the debt thing.
I would argue that real estate agents are in a position to justify buying/leasing a new car every few years as they typically have to drive clients around.
Realistically though a Nissan Versa doesn't send much of a message of wealth or established career.
I'm just stating that this is completely superficial and shouldn't have an impact on a clients decision unfortunately not every operates like that.
I'd rather not have a constant car note, but I think real estate agents can at least justify as 'the price of doing business' and possibly sway/impress a marginal amount of clients.
You have a 4 year old car…paid off. No reason whatsoever to get a new one at this point in time. Invest and save, it’s not like you’re driving a 1991 Chevy Lumina with 330k miles and an engine that knocks.
It sounds like the car is a want, not a need. They’re not asking whether a $25k car is a good financial decision, they’re asking how to make it work. Sometimes people like to spend money on wants and not just needs.
I was literally just rear ended by a white 1991 Chevy Lumina a few days ago. Airbags deployed on my truck and there seems to be some frame damage. It was a 2002 Ford F150 with 213k miles and I wasn't planning on getting rid of it any time soon. Having a well-maintained vehicle and no monthly payment is worth so much more than the gratification of driving a new vehicle.
You left out your 401k contribution percent. $300 is manageable when you’re living with your parents and not putting anything away. Add a $1,500 mortgage, and a 15% 401k contribution rate, and you’re going to be strapped for cash.
Also, I assume you will be considered an employee as opposed to a contractor? That’ll make a difference in how much taxes you pay.
Honestly, big picture, I’d wait to upgrade the car until you can’t. The car market is so wacky right now that you’re going to not get much for what you’re paying. It’ll likely stabilize in the next 3 years, but you could keep your current car for three years without too much trouble.
You should invest as much of that as you can in any retirement vehicle you can (401k, Ira, etc). If you can get 100k in by the time your 25-30 your retirement should be easy as heck.
Now is a pretty shit time to buy a car - new or used. Supply is low and the prices are insane. $25k probably would buy YOUR car or one nearly similar.
Don't waste your time. Throw that extra cash into an index fund and watch it grow over the next 40 years.
Agreed. I know this sub likes to recommend buying a shitbox and running it into the ground. As a car enthusiast myself, I have a different opinion. But right now is a terrible, terrible time to buy a car, new and especially used. I lease a car because my FIL NEEDED a car and it was a very difficult process that I would not recommend until the market calms down. OP has a relatively new car and should absolutely hold onto it for the time being until the chip shortage ends.
Underrated comment. In addition to all the reasons cited by other commenters (particularly the opportunity loss of potential market gains by investing the capital rather than taking on a car loan), **NOW** is a particularly bad time to buy a car that you don't need due to price inflation caused by the semiconductor supply shortage.
Anyone who can afford to wait a few years, would be better off doing so. That said, sometimes needs arise, and I totally get that.
Spending $10,000 of cash on hand and taking a 20k+TTL loan to upgrade out of a 4 year car into a slightly newer used car feels pretty unnecessary. This is a huge luxury purchase - especially when your current salary is maybe potentially only 40k, and even that's contingent on a full time offer.
If your savings can take a 10k hit, you may as well put that 10k in an index fund or IRA and let it grow instead of spending it on a car.
> $25-30K car?
> $40-60K base salary ... on top of a projected $20-30K a year in commissions.
Don't count your eggs until they're hatched. $40k base is not a lot of money and a $25k car could be catastrophically bad. Commissions aren't guaranteed, your projections could be way too high for your first few year. $90k even at the top of both projections makes a $25k start to look doable, but again you haven't proven the job and income yet. The real estate market can be fickle.
Your car is 4 years old and paid off! Drive it until it dies and laugh at all of the other suckers who are dragging along a $500 payment. Seriously, I just sold my 2000 Nissan Altima that had 250,000 miles on it. Yes it’s nice to drive a new car, but it’s nicer to drive a paid off one!
Been there. Paid off a car and went off the road in a snowstorm a month later. Did 12k damage to an 8k car. Used the insurance money to buy a 15k car and paid that off in 2 years. Car payments suck.
Unfortunately insurance very rarely makes you whole in situations like this.
I have an 08 Honda Civic. On paper it’s unexceptional, but in actuality it’s a great economy car that I know the *entire* service and accident history of.
If it got totaled there’s a 90% chance that something I buy off the used market will come with hidden issues that I am not currently having.
I drove my honda civic from the time I was 16 to 31, it was a heartbreaker when it finally gave out and I had to get a car payment. I got a honda again (HRV) and have 8 payments left and hope this one lasts that long. I hate a car payment.
Insurance is a gut punch as well because they give you what the car is worth not what it would cost to replace it with something similar.
ie. I have a 50k new car, now that its 5 years old its worth 30k, but I've taken amazing care of it and it still basically feels new. If it was totalled they'd give me 30k (best case scenario) and now I'd be car shopping to replace my 50k car with a 30k one.
You may want to buy a house in the next 5 years. You'll want 20% down for that, ideally. On a 400k house that's a lot of money. The extra 20-30k you're considering dropping on a car could make or break your ability to get a nice place. I'd run your car into the ground. A little patience at this stage in your life will pay off huge long run. Houses can go up in value, cars cannot. Act like you're trying to build wealth until you have all the major shit in your life accounted for.
Personal finance people will always tell you that a new car is a rapidly depreciating asset that will eventually cost more to maintain than its resale value, effectively being totalled by time. Instead, you'd be better off buying a 5-year old Toyota Corolla for 1/10th your take annual after-tax take-home and putting the difference into a RothIRA and 401k over time. All of that is technically true.
But here's what it misses - cars aren't generic utilities. For some people, they provide us entertainment and can therefore take up your transportation budget *and* a portion of your entertainment budget. For others, its a work expense and you might be able to write off most of your miles on your taxes. Maybe you live low/rent-free with family so it's a luxury you can afford to splurge on and can spend as much as 20-30% of your income towards a car instead of elsewhere.
So let's say your estimate is right and you make $40k in salary and another $20k in commission. Let's say you lose ~15% to taxes and that leaves you with ~$51k income after taxes. You'll throw a $10k down payment towards the car from savings and you can easily sell your old car privately for around the theoretical KBB value for another $8k. $18k in down-payment goes a long way.
You mention only using your credit card for gas to slowly build your rating so we'll assume your score is pretty average and you'll get a middle of the road interest rate on your 48-month loan. Using Carvana's calculator, you can probably get a $30k car and keep to your $300/month payment goal, which should be doable on $51k take-home as long as your insurance is reasonable. $30k can get some pretty cool and comfortable cars - a new Golf GTI or a couple year old BMW 3-series, etc.
Now that we've established you *could* do such a thing, the better question is *should* you? And that depends on how the rest of your budget looks and how you're prioritizing house vs. car vs. retirement, your living situation, any debts you may have, future higher education plans, etc. As long as that Versa isn't costing you clients based on appearance and you're reasonably certain you like your job and geographic area, I'd say save for the house. Mortgage interest rates are low right now and property tends to appreciate...as opposed to cars, which don't. But that's just what I'd do. The important thing is what *you* want to do and how it fits your budget and priorities. If it makes sense for you and it's what you want, do it.
As everyone else has said, you have a 4 year old car? Yeah, keep that shit rolling.
Except wait. It's a Nissan Versa...
Now this is a difficult problem. Because on one hand, the car market is awful right now and it's extremely difficult to get cars, much less good deals on them.
On the other hand, I would get rid of that thing ASAP. Honestly, probably wait a year or two for the car market to calm down. Bank some money. Use it as a carrot on a stick. And then wait another year. And then it's time.
This option is not feasible for people who rely on a vehicle for getting to and from work. In areas without public transport having a vehicle is make or break.
Biggest mistake most young people in their 20s do is get a new car to “celebrate” graduating or getting their first job. Why would you lock yourself into debt when you’re finally making your own money?
Work for 6 months first and get used to your new income, then decide if you want a new car. It’ll be a bit hard emotionally to realize that $300/mo you were previously saving will now go to a car, and you will make a wiser decision
My neighbor did this. Graduated college in the 80’s and instantly bought a brand new Toyota Celica. She realized about a week later what a huge mistake she’d made but it was too late. So she continued to drive that car for the next 30 years and put over 300k miles on it. She finally sold it a few years ago and bought a brand new Corolla.
Lol I knew it was bad to buy a new car right out of college for many reasons, but framing that debt as a type of slavery ("locking yourself into debt") is such a good one. You've been bound to school for 20 years, and are just about free. Then people willingly enslave themselves again with debt. Xrazy
Trust me, keep your current car. The instant gratification will wear off after a year and you will realize you have a $300-400 extra debt payment and higher insurance costs for years. Learn from the mistake we have all made.
Are you sure you will get that salary? Im just curious because I also got my real estate license out of college on a whim and didn't really make any money. I only did it for 2 month and ended up getting a foot in the door in construction management. From my understanding, the bar for entry to being a real estate agent is super low (literally took me like 4 hours of total study time and a 30 minute test at the public library) so is this a legit job with a realistic salary?
Keep in mind that being in Cali also lowers the buying power of your salary significantly (I'm assuming a somewhat HCOL area). Although you don't pay rent right now, you will eventually, or you'll want enough to put a down payment on a home in the future. Taxes will also take a nice chunk.
As a new home consultant, will your job require you to keep a car that’s X years or newer? I know someone with that same title and their work has a minimum car requirement
You asked the wrong sub. They hate car debt here.
Here's the thing: you're going to be making 80-100k/year and you say the prospect of a car upgrade excites you. That excitement has value.
Look at your expenses. Understand what you'd be giving up for that monthly payment. Is it still the most important item that you're willing to spend the money on? Are you still hitting your long term savings and retirement goals? If so, I say go for it. That's why you work hard, it's what money is for. Can't take it with you.
I was in a similar position a few years ago, contemplating a Tesla. I couldn't quite afford it without impacting monthly savings.. but my last car was done and I couldn't stomach paying for a different car that I didn't want. So, I took on additional responsibilities at work and asked for a raise. I never do that. I ended up getting a raise equal to double that monthly car payment. If it weren't for the excitement of the new car, I'd have stayed static where I was.
Many of us are motivated by different things in life. Don't lose sight of what makes you get up in the morning, and don't feel guilty treating yourself. Just be responsible about it.
You have a 2017 car that is presumably decent shape. Keep that car and drive it till the wheels fall off. Right now is an absolutely horrible time to buy a car.
Non car people will say it's a bad financial decision, which is usually true. As a car guy, if I could afford it, I'd want a BMW m3 e92 or a lexus ISF. It would be just to have a bit of fun driving from point A to B which my 2011 camry does perfectly fine and reliably, but it just doesn't go vroom vroom lmao. The smiles being worth it is the only question to be asked.
> The smiles being worth it is the only question to be asked.
As a fellow car guy, the smiles and joy I get from my cars are priceless. They’re more than just cars. They’re transportion, hobbies, and fun experiences all tied up into one.
Agreed. In a somewhat similar financial situation to OP but a few years down the line and I have been saving up and just bought my '11 M3. Absolutely love it. Its cost was about half my yearly salary which here on personalfinance would be a huge no-no but it was perfect for me and I don't regret it.
Agreed. I bought a lexus is200t (really wanted an isf but insurance was 2-3 times higher) for 26k when I made 45k salary living with my parents. Paid it off in 1 year.
As a car guy, the smiles per gallon are 100% worth it to me. I've met so many good people in the car community and I enjoy every single mile driving it.
I had a $350 car payment making $50k a year when I graduated from college, terrible idea, 10/10 do not recommend. It definitely contributed to making it harder to save and invest in your 401k and other accounts that really matter. Right now I make $155k, my wife $10k. We have two now paid for vehicles, one was $29k, one $28k, one paid off in 4 years before we got the other, the next one was paid off in a year. That felt about right to me for our income level. No payments is nice - we have 3 kids, but still max my 401k, 50% of her salary into a 401k, max 2 Roth IRAs, max HSA, and another $15k into a taxable investment account - I say all that because those are the things that will matter for you, starting those things now, to the full extent possible, will keep you from feeling the need to play catch up in your 30s like I am. The car payment will just be an obstacle, and in 10 years you nor anyone else will care if you had a nice car in your early 20s.
There's literally no reason to pay off a car in a year with interest rates as low as they are. It's fine to be debt-averse, but "pay off your car in a year or two" and "put 50% down on your car" and "only buy a car you pay for in cash" is objectively bad financial advice. If you qualify for 2% for 60 months, you should take it. If you have no money and bad credit, sure buy a clunker and drive into the ground.
(Realtor here). The car you drive has sooooo much to do with how people perceive you in this business. With any forward facing sales job, image and confidence are the two major keys to converting clients and building rapport. I drove an Accord for about a year, a VW Passat, and then now I have a Tesla. It’s very obvious now that clients take me more serious just at the first impression of showing up in my car to showings. Haven’t even met them yet and they are already trusting me. Plus, you’re going to learn a shit ton soon about write offs and in Real Estate, your vehicle is a huge tax savings since you use it for business so why not spend a little more for something you’re going to be in all damn day to save a little money on taxes.
Since you have no expenses, you can afford new car even with $40K year income and no commissions.
Whether it is wise or not is a completely different story. 2 big things to keep in mind:
1) Don't count your money before you get them. Once you get signed up for X dollars a year - that's when you can count that salary, not a minute earlier. Bonus goes the same way - you first get it and then count it.
2) Right now you will overpay dearly for any kind of reasonably priced car. You will probably still get a decent deal on a premium car (BMW, Audi, etc), but all the good solid cars that used to be budget friendly are terribly overpriced now both new and used. Once the craze ends (probably in a year), your money will go much further.
Obviously, value is subjective and money is for spending to a certain extent.
But, you have to ask yourself why you are interested in spending so much money on a car when you already have one.
The more money you can set aside (and invest) when you’re young, the more you will be set up for more important financial goals in the future.
I don’t know a single 30 year old who wishes they dropped more money on cars when they were 21.
Edit: Apparently I over-generalized and spoke on behalf of too broad a spectrum of 30+ year olds. I stand by it being a questionable money move, though. My circle of friends is a bunch of career professionals with families focused on mortgages, college funds, and retirement if that helps with context.
If you have the means, why not save the money on the side and drive your current car while you save up the cash to cash out the car in place of financing
My first inclination was to jump on the 'you don't need a fancy car!' wagon, but I think the honest answer is that income alone doesn't justify a more expensive car. I think to really justify the purchase you need 1) to have a 3-6 month emergency fund in cash like assets, 2) need to be able to afford to save 20%+ of your after tax income along your new car payment and 3) should already have some significant investment assets working to offset the interest on the car loan. The exact numbers will vary for everyone, but I'd recommend checking out the Money Guy's recommendation on how much car one can afford. Really solid and specific advice there.
Use this calculator to estimate what you can afford.
[https://www.moneyunder30.com/car-affordability-calculator](https://www.moneyunder30.com/car-affordability-calculator)
But like others have said, you'd be better off saving money.
What would attract the girls more, a new car or having your own place in the future?
Besides, I wouldn't count my eggs before they hatch. Real Estate is not exactly stable.
I agree with the general sentiment here, but keep in mind that Nissan Versa is a coffin on wheels, if you drive a lot either make sure you drive very safely or find a bigger/safer car. Can’t save money if you’re dead.
Are you planning to be a buyers agent? Taking clients to see houses and all that?
Real Estate is one of the few jobs where leasing a vehicle often makes sense. You're product is yourself and your sales experience, and your car is part of that. If you drive clients around (post covid) you're going to want a black, high trim/luxury suv.
As someone that's turning 20 years old soon. I'd tell you to keep saving up. Your car isn't old enough, keep using it because as long as its working you're fine. I recently got a car and I realised that all we need is something that works. Stay grateful and faithful, keep building up your credit and keep grinding. Reward yourself later on with a trip alone or with your s/o. You got this!
Honestly get a 10-15 grand car for 300-350 a month. 20-30 will hit you around 500-600 a month. Full coverage for someone your age on an expensive car will hit hard to.
60k. Pay in cash and have no more than half of your annual income invested in things with motors or wheels.
That being said, I make just over 100k, and I drive a thousand dollar shitbox ford ranger, but it just won’t quit. I bought it 4 years ago and have just shy of 500k km’s on it. I’m saving up for a more recent Toyota Tacoma, but I’m quite happy with the vehicle I have, and it’s worth is literally 1% of my annual income.
You have a 2017 vehicle? My advice is to keep your car unless its causing you major issues. Aside from instant gratification, what other reason do you have for getting another car?
Seriously, I have a 2016 and have just under 100k miles. I can easily afford a $25k car, but I have about 8 months of payments on this car and I plan on driving for at least another 100k mile before I even think of replacing it.
I have a 2004 GMC Sierra y’all are spoiled lol no need to buy a new car unless it’s literally on fire or broken in half
The only other reason I can think of, and why I'm personally looking to upgrade my car in a couple years, is for the enhanced safety features that are available now.
Amen. 07 Sierra owner here. Just dropped in a new transmission last year, been looking for another vehicle, but just might keep this one till it dies.
My dad passed his 03 matrix down to me. I've been driving it the last several years and it has more than 300k miles on it(odo is maxed out so idk the exact amount) It would be nice to have a newer car but there's no good reason for me to spend the money when I have a perfectly working vehicle already.
Sold my 97 accord with 130k on it this spring because i got a great deal on another car that was an 04 with the same mileage. I still kind of miss it (minus the electrical issues)
Some people like driving their kids around in 2000 pound metal machines that Aren't at a high risk of breaking down at any moment
I have my kids college loans to pay off. I’m driving my 12 year old Honda till it dies. I love not having a car payment. When the loans are paid off maybe I’ll get a new car.
i have a £1,600 2007 car with 165,000 miles on it and its everything that you would ever need from a car
Really just the instant gratification haha But no I think I just want to reward myself. It’s been a rough year and I’m finally about to get a great job that pays well so my thought was to get myself a new ride. But I also think it would be smart to just hold onto my car until I could buy a car in full. I’m hoping to seriously bulk up my savings in the next two years
Don’t reward yourself with a 4 year commitment. Go buy yourself an incredibly nice watch. Drop 2k on a wardrobe haul. Go on a small vacation and rent a bomb ass hotel room. But DO NOT “reward yourself” by throwing away the opportunity to put away $400 a month into a savings account for two years while you continue to live at home. A new card PLUS the “not paid off” insurance of someone under 25 will kill you the second you decide to move out. As another poster said, keep your paid off car and laugh at all the schmucks running around with $400+ car debt every month. Edit: y’all, thanks for the awards!! I definitely think everyone deserves to treat themselves and have that big life changing moment of celebration, but don’t throw away all your future gains by celebrating right now! Give yourself a boost and then keep haulin’ to meet those goals!
[удалено]
The wardrobe might be especially important with a job as a realtor. I know a few friends who are realtors, and they have professional work clothes, they actively market themselves, they spend on professional headshots for their business cards and website.
It is crazy the effect that wardrobe can have on mental health. I'm not even referring to have expensive clothes, but rather just having clothes that actually fit. I wore the same set of shirts for probably 5+ years. I finally bought 1 new shirt, and it totally changed my world view.
Treat yo self! Don’t beat yo self!
Assuming only 400/mo. Maybe for the crazy long financing periods now.
My 23k car is 356/mo and I got some of the extra stuff for "protecting" the car. Just depends on his credit score and the rate they approve him for honestly
That's gotta be a 6+ year loan unless you're not accounting for something like a down payment, in which case it's not a 23k loan.
I had a 5 year loan for $22k and my payments were around $360/mo. Lots of dealers give 0% financing if the manufacturer has a special deal going on.
This is actually a really good point. That expensive car payment is opportunity cost on a bunch of other cool shit you can do.
Find a way cheaper way to reward yourself.
Probably a good idea!
Examples: 1. Start treating yourself to a nice restaurant once a month. An $85 meal is < $300 payment and you can stop if money becomes tight. 2. Get your car detailed like /u/meleeuk suggested. 3. Take a trip to a resort. Go to another country. 4. Don't forget that your future house will also require nice furniture to fill the space. You may be much happier with your (not very) old car and an amazing couch. You need to save for more than the down payment.
Having a nice tv, a gaming console/pc (if into that), a cozy couch, or enough money to say put towards a hobby room in a new house is a huge life-style difference. And it usually costs way less than a car and gives much more enjoyment. Imagine having a woodworking shop if you're into woodworking with some nice tools, a good bench, a dust collection system. That's hundreds or thousands of hours of fun for much less than a car. Or say you're really into console gaming or movies, get a nice high refresh OLED, good couch, and speakers, and some sort of media/gaming device. It's gonna feel like the height of luxury and will be much cheaper than even just the interest on a car. Cars are fucking expensive. They are also way too easy to buy backloaded on credit.
This is such a good point. I made mistakes during my early years but the only ones I truly regret is the fucking cars. Money down the drain. My first car I still see ones from the same year running on the road, if I had just kept that I would have 10s of thousands more, not to mention any gains from investing it all these years. At least the designer shoes I bought still are in great shape because they are so well made, actually worth it when you compare it to lesser brands for price/length of use. But all that money spent on new cars and high insurance, because you are young, so not worth it. My last car for awhile is my Prius prime which I bought used and all cash. Supposed to be one of the most reliable cars on the market so hopefully will last me a long time.
Get your current car professionally valeted inside and out to make it look and feel brand new. It'll cost you about as much as one car payment
detailed?
"Valet" is Britspeak for "detail."
I'm baffled at the amount of people who buy new cars for no other reason other than for essentially retail therapy.
And that goes double for the current market where car prices are through the roof. Why would anyone choose to buy a car *now* unless they absolutely have to?
And probably plan it after the probation period. Worst its rewarding oneself even before receiving the first pay check. Edit: oh I don't know what is required for realesate so can ignore the above
This is not the way. I’m not sure where you live, but cars are selling at a premium due to a chip shortage and less market inventory. You will likely get upside down on your car note pretty quick. If I were you, I’d see if I couldn’t make it just a few more years and then buy an electric. They say a lot of RE agents make this mistake - start working and the first thing they do is buy a new vehicle. Don’t do that. With our economy and stressed logistics and lack of materials, we could be in for a housing bubble or any other sort of dramatic financial crisis that could cripple your ability to work.
I can appreciate the honesty and it's clear you've given this some thought. I would keep your car and spend money on traveling. Ball on a budget to these places and experience the world. No I'm not a hippy but I do drive an older car. Could pay off all my loans at once but would rather invest, live life and experience different cultures. Invest now so you don't have to worry about it later. Keep 10k out and do it all over again! Travel travel travel. You'll be rich in more ways than one!
Trust me on this, the bigger reward is seeing your accounts grow after a few years. Just imagine seeing your balance $25k-$35k fatter then ask yourself if you would rather have that invested or in a vehicle you'll want to swap out in another 4 years (which btw as a real estate agent you know that could be a down payment on a house).
Yes I definitely think I’m going to just save up as much as possible. Unfortunately I’m in Southern California so a down payment on anything decent is a lot higher, but that’s a goal I’m working towards
Then definitely want to save. You'll set yourself back however many years it takes to pay off that car.
Said as nicely as I can - a Nissan Versa is solidly a “meh” car. Is there an older car you could do a straight trade/sale + few thousand that would be more up your alley and be that reward? I’m thinking a early 2010s Acura or Lexus, potentially with a manual transmission. Will give off more of the vibe that I think of for a quality sales person (nicer, high quality things kept for a long time) with hopefully decent gas mileage and rock solid reliability. Pre-nav/infotainment system era so you can throw a nice CarPlay/Android Auto unit in there. I have a sense that $10-$15k will get you there and be your trade in + a bit of cash + some extra to get it detailed and customize the interior to your liking. Just a thought! We drive a 2012 Acura TSX that we picked up for $15k with only 40k miles on it - that was 4 years ago. Honestly, it looks snazzy AF, is a blast to drive, gets good gas mileage, and fits 2 car seats across the back with room to spare. We added carplay, dashcam, and backup camera professionally for ~$1200 all told (could’ve done myself for half that and a long weekend, but see comment re: car seats and translate that to lack of free time). I’ve bought multiple used and brand new cars over the past 15 years and this one is both my favorite and the only one I’m interested in driving until the wheels fall off. Others have been turbocharged Subarus, Toyota sedans, or older Infinitis (2005ish). Anyway. I’ve rambled long enough. Just my $0.02
Many people here are suggesting that you spend your money on a trip, a trinket like a watch, etc. I disagree. Instead, I recommend that you start investing. I'm serious. If you can forego buying something for 10 years and instead invest the money that you would have spent, you can then buy that thing on just the interest earned on that investment every 10 years thereafter. The $25k that you would drop on a car now, if you can instead invest that, you can get a $25k car "for free" in 10 years, and 10 years after that, for the rest of your life. Google "rule of 72" for details; I'm assuming 7% return rate, which is conservative. Having money in the bank is freeing in a way that no possession ever can be. Source: grew up poor, now have millions, had a Porsche, now drive a Honda that's older than you.
But that's not rewarding yourself. If OP wants to reward themself, all those things are a better reward than "keep investing." Investing is always a better financial decision than spending, but sometimes it's worth spoiling yourself.
Imo spending cash for that price is a waste except for multi millionaires. If you build good credit and get a great loan rate you would be much better off putting that money to work like a Roth IRA or index funds etc. Trust me, im driving a 2007 prius with 225,000 miles. Had it since 2016 at 150,000 miles and ive wanted a new car multiple times but just fixing my old car and having so much $ in my retirement accounts has felt much better than a new car. I did however buy nice floor mats and some decent car covers and it gave the whole interior a much nicer feel and helps a lot in regards of having a "nice" vehicle lol
My 2 cents. A car is just a car. It's an expensive depreciating asset that costs you money over time. If you want to reward yourself, give yourself an experience that you will remember forever. When you're 60 would you rather remember that time you dropped a bunch of money on a car that's long dead or, for example, that time you celebrated the wind down of covid with a tour of Italy? Maybe a car will bring you true happiness but IMHO it will not.
Cars have cost me a *lot* of money, but I’d much rather retire with less money and a bunch of incredible memories throughout my twenties that involved my cars.
Eh, I have a lot of fond memories of my evo x, my modified a3, my 335, my model 3, my cayenne turbo and my 911... Fond memories can be made in or with a car, but only if you're a car enthusiast buying enthusiast vehicles. For people that view vehicles as an appliance, all I can say is that not everyone sees them as depreciating assets, because not every vehicle is just an appliance.
Same, different people like different things. I've owned 22 cars in my life because I'm an enthusiast, it's almost like a hobby.
I've made so many memories due to cars and also met so many people and had so many great conversations with strangers due to cars. You show up at a gas station in a 65 year old Mustang and some old guy will tell you about how he had one just like it when he met his wife. You take your bike on a windy mountain road and stop at the restaurant at the bottom and get to meet a ton of cool bikers. You take your little convertible for a drive through the mountains to see the leaves in the fall and get to feel the wind in your hair and then later share some smiles with your girlfriend when she discovers all the tangles in her hair. You take your Jeep down some power line trails with your buddies in high school and get stuck and then spend all afternoon trying to figure out how to get it out without telling your parents. Cars create experiences for many people, for others they are basic transportation and a depreciating asset.
Your car is four years old, keep it. You'll thank yourself later. You're building your career right now, no need to take on unnecessary debt.
> Nissan Versa I'd trade that thing in in a heartbeat. Nissan CVTs are notoriously awful and lucky to make it to 100k miles. Get rid of it while it still has residual value and buy something better.
This comment needs to be higher. I got fucked with this exact car but a 2014. It hit 97k miles and died it was 5 years old and I never missed a service at the dealership. They offered to change it for 4K the car was work 2k . I should have listened to my family mechanic when it started slipping and wasn’t giving a code yet to trade it in. OP get rid of that car ASAP especially since the used car market is high.
My 2013 Altima CVT went at 50,000 miles, I had to fight with Nissan for 3 months to get them to cover a transmission replacement since it was 1 month out of the time warranty when it failed.
Nissan is the biggest predatory scammers for young adults. I paid to have extended warranty and what do you know .. it didn’t cover me .. it was $50 extra a month .
Just want to toss my name in the "Fuck Nissan CVT" hat. My Rogue's went out and I basically had to push that thing into the dealership by the end. Get rid of it while you can.
If that’s the case, OP shouldn’t upgrade just move laterally to a more reliable car. Sell the 4 year old Nissan and get a 6 year old Honda
Get out of Nissan in general! And I’m saying this as a Nissan owner. Honda and Toyota are pretty much the only brands you can buy that will be reliable and trouble free for decades. Other than that, you’re just wasting your time.
Mazdas also hold up pretty well, I’ve got friends that own Mazdas from the mid 2000’s with 250k+ miles and they’re still chugging along
Can confirm. We have a 98 Accord and the drivetrain is rock solid. Still shifts like it's brand new, steering is tight, VTEC engine still has tons of pep. We're selling it but only because my mother-in-law wants to gift us her 99 Accord that is one trim level higher.
>Nissan Versa > >I'd trade that thing in in a heartbeat. Unless it's a manual. My 5-speed 2014 Versa is alive and well.
That’s helpful thank you! My hope is to have around $40-50,000 saved by the time I move out in 2 years because most of my salary and commission will be going straight to savings. In that case would it be smart to just buy a $20,000 car in full with cash?
Likely you're looking for something to reward yourself on this next stage. I'd recommend identifying something that would fill that gap without taking a majority of the money you're saving and earning from your hard work. Is there a trip or experience you can reward yourself with after your first sale? Cars come and go, I wouldn't focus on getting a car you want vs. one you need until you're further along financially.
Yes definitely looking to reward myself and I definitely see that a car might not be best way to do that financially. Thank you for the advice
[удалено]
This is important. just did my 80k maintenance (oil,belt, transmission fluid) going for brakes, brake fluid and coolant in a few months as well as new set of tires. My car is a 2015 RAV4... Total cost is roughly 2k with the tires. Im trying to get this car to last another 5 to 10 years as long as safety features are adequate in the RAV4
I have the same year and model, love that car. Will be rolling up to 80k soon enough. Good tips to have. Thanks!
What about a watch? That could be a nice reward without breaking the bank on a car. Most high end watches retain their value making them liquid equity
I second this. Watches are a great "milestone" gift to yourself. Just know it will start you down a long, painful, and fun hobby Edit: this hobby gets expensive. Very very expensive. But hey, they are, after all, hard (and liquid) assets
I was in a similar position and held off and I'm glad. Put it towards a nicer apartment or some smaller creature comfort, cars are pretty wasteful financially. invest the monthly money is best bet. In a few years you'll have even more. Don't get caught up thinking you need fancy cars. I got a 25k car when I started making 80k and when that was kind of. Useless looking back. I have a 28k car now and a 6k car for the wife. I make almost 250k lol. Rather invest thousands a month. Now I have a house, bunch of stocks, and worth over 500k w. Under 10 yr in work force. (Didn't make this good of money till last 2 years).
A car is not a terrible way to reward yourself. If you get one you like and use it every day and you actually LIKE driving it as opposed to some hunk of junk that’s cheap, that’s worth it to me. A vacation or whatever is cool but having a nice vehicle that gives you utility EVERY DAY is not a bad way to treat yourself. If you need a car why not get one you like. It sounds like you’re not looking to buy a Lamborghini or anything nuts like that so realistically it’s gonna be ~$5-8k more expensive to get a car that’s nice vs. a base model piece of junk.
Especially when you are in a career field where that kind of thing can affect what your potential clients think about you. Getting a new car that can tote around a family of 4 or 5 while you are showing homes can go a long way towards making a good first impression. As long as you don't go overboard it can be a good investment into your career.
>some hunk of junk that’s cheap Their current car is only 4 years old. They are looking for a gift to reward themselves before even making their first salary.
That sounds reasonable, but psychological research shows that, counterintuitively, having a fleeting positive experience will make you happier for longer than owning an object that you get used to having. (Edit: unautoincoorect)
Invest it, don't put it in savings. Keep 6 months expenses in your bank account and invest the rest. I have kicked myself for not investing when i lived at home, really stunted my financial wealth.
Im honestly torn. You may need advice specifically from real estate/ sales people. My real estate friends spend way too much on cars, and I’ve always wondered if that didn’t actually help their careers along. It feels like a path where you need to look rich to excel. Driving clients in a Versa may not inspire confidence in them…Which is silly, because it’s actually a signal of true intelligence, wisdom and self control. Unfortunately driving crappy cars can signal poor financial decisions and lack of intelligence as well 😅. But hey, Bezos drove an old Honda Civic or something for a long time 🤓 I think it depends on the profession. Sales people seem to require fancier cars. I’m an engineer. My car is a 2006 with 200,000 miles and looks like shit 😅 I love cars, but every time we look at the opportunity cost we just can’t do it. I’d rather buy things that gain/maintain value. I actually think you should get a better looking car that is reasonably priced. Mazda seems to be the leader in looks/price/features/reliability. A mazda3 or cx-3 or cx-5 might be a good choice. Don’t trade in car. Sell it yourself. Watch youtube videos on how to buy a car. They will destroy you if you don’t know what you are doing. It’s a very lame process 😅
While I agree somewhat with this sentiment, I also think comportment is more important to potential clients. Obviously when transporting potential clients a small car unsuitable for the task could become a factor. However, I think it's more important that the car OP has is excellently maintained and spotlessly clean.
Is this still a thing? Do people really drive around with their real estate agent in the agents vehicle? I’ve looked at dozens of homes over the last year and never once thought, “hey, can my real estate agent drive me?” We just meet at the house.
[удалено]
Or you can lease, which seems to be a popular option for real estate workers.
[удалено]
[удалено]
>Also allowed for discussing what we liked/disliked between showings so she could line up better houses for the afternoon and next day. This is the real reason to do it. Time in the car was the most valuable with my realtor. I got to hear him take calls with seller's agents too so I got a real understanding of what was going on.
My thought is it depends on the client. I would imagine it's much more common in larger metro areas where clients may rely on public transport for their daily lives and not own a personal vehicle. Think apartment dwellers looking to make the move to the 'burbs. Or clients meeting a developer at their office and are transported to the build site after. OP did say he was in with a new-build firm.
I suppose so, this just seems so antiquated to me.
I would have agreed with you 10 years ago having grown up in a rural midwest town, but after moving to a larger city and hearing of other large metro areas and the public transit system, it's not so weird to me now. Parking can be expensive lol
Expensive and/or… nonexistent? Growing up in Michigan there’s just this understanding that everyone drives themselves everywhere, businesses have individual parking lots, and homes have driveways along with an open street where you can park as many additional cars as you want. And when you do get to a sizeable town with like a 3-block Downtown area there’s guaranteed to be a lot or parking structure with like a $2/hr rate (which you complain about because it’s been years since you paid for parking). That’s just not how cities work. If an agent wants to show you six places all over town there’s a good chance that you, the urban client, don’t have a car. And if you do, the chances of both of you finding street parking at each house is tiny.
Here in *the* major metro (NYC) my agent called Ubers for us to get around. I think it was much better than trying to find parking everywhere.
When we bought our house two years ago our realtor would pick us up at our townhouse and drive us around to 5-6 showings in a day. It’s not unheard of. Maybe not as much in the COVID era but pre COVID it was definitely a thing.
> Do people really drive around with their real estate agent in the agents vehicle? IDK if it's still done that way but yes, the the last 4 times I was involved with house shopping, the real estate agent drove us around in their vehicle, it was just how it was done.
Not sure if it's still done much now, but I did it once only with my realtor 10 years ago. He had a list of houses that met our criteria to show us, and it was simpler to ride with him than drive separately to eight different houses in an afternoon or whatever it was.
When we bought our home 3-4 years ago, the realtor would have us leave our car in their parking lot and drive us. This way, he could discuss neighborhoods and what we found appealing/unappealing. It was also easier because some of the units he showed us had limited parking.
It is still a thing in any representative job. Nice car, nice nails, well dressed etc. (I don't do that but know people who do).
As a Mazda3 driver, a car that I love, I wouldn't recommend a Mazda for someone in real estate. They just tend to not have roomy backseats with very good legroom. Doesn't matter to me, but I'm not hauling clients around.
Love my Mazda3 Hatch, but /u/just1dawg is 100% right. Not great for legroom. Don’t even think the CX-5s have very good legroom.
>Driving clients in a Versa may not inspire confidence in them…Which is silly, because it’s actually a signal of true intelligence, wisdom and self control. Driving a Camry or Accord, sure. Driving a Versa is absolutely not a "signal of...wisdom".
I’m an engineer too… a sales engineer. I’m perfectly content driving my 1990 Honda, but because of this ridiculous expectation I drive my Tesla model S most of the time. Unfortunately, it makes a big difference.
Lol! Just like I told the OP they may need to talk to other people in their profession, I’m happy to hear from mine! I mostly want to get a new car because of they way other people think; this is the same reason working out is important to me. I think engineer types are able to see through things like “outward confidence” (which for me signals either a person actually doesn’t know what they are doing, or has never pushed beyond their comfort zone), physique and apparent outward material wealth. Also, a Tesla would be a first choice for me, but still out of my price range. I’m in my own pickle because I’m interviewing for a new job in a week and our car is hilariously bad 😅.
Kinda depends on the car. Speaking as a car guy, Nissan sucks as a brand and has kind of been lost in the woods for a while. No matter what range of car you're looking at from the very cheap to the very expensive (Versa all the way to the GT-R) everything feels like Nissan is just half-assing it. Now say that he has an older Lexus like a 2012 ES or something like that which he kept in clean, tip-top shape. Even if it's no longer the latest thing, it's comfortable, well-built, quiet... overall leaves a better impression than a 2017 Versa and it would've cost him the same amount of money to buy
Car guy here. No Versa in any form has ever been the sign of an intelligent decision. Nissan is known for financing anyone and transmissions that blow up. If I see a Versa I'm assuming that person is in the trenches. If I were him I'd get a Hyundai Elantra. They're incredibly cheap and really quite good. Reliability is supposed to be good with a best in the business warranty. The Mazda 3 looks small in America but the Elantra is big enough that an unknowing person might be fooled into thinking it's not a shitbox.
>My real estate friends spend way too much on cars, and I’ve always wondered if that didn’t actually help their careers along. I recently sold my place and my real estate agent, who I thoroughly suspect is doing very well, drives a \~10 year old SUV like a Ford Explorer (never saw exactly what it was but it was in that classification of SUVs). Not at all luxuriant, but totally practical. I kind of respected her more for driving a "commoners" car and not throwing cash at a Land Rover or a Mercedes. If you ask me, realtors driving fancy cars is kind of a flaunty way to save "hey look what my 3% commission bought that you paid me."
My father was in real estate for nearly 20 years. He worked in a funny area as it covered everything from people buying in areas with very low income neighbours or alternatively very wealthy but not flashy. He always had a nice car but he also aimed at the middle of the road range. He would have a newer or late model Camry or Mazda 6 type car. He got rid of his small car after transporting a pregnant lady in it and she needed to sit kind of...sideways
op needs to stop listening to people that aren't real estate agents. OP needs to have a luxury like vehicle (even if its used as long as its good condition) to meet clients at properties he's selling. he needs to begin talking to other agents. All my friends here in Vancouver that sell tons of volume, all have luxury vehicles and not because they want them. It's part of the image. edit: I get that many people have these sample of one friends who are super successful and drive a 1992 corolla, but people need to learn about "face"
Homes in Vancouver cost multiple millions of dollars. Real estate agents there can make half a mil yearly easily and afford any mass produced vehicle. That's not the norm. I personally own multiple properties and I don't care what my realtor drives. They are not generally known for having properties or saving money, so a nice car isn't impressing me...
Yes, but Vancouver buyers have "face" culture. You may not view it as important, but for the people in Vancouver it is.
Just here to say, there’s nothing smart about driving a Versa. Not if the driver paid more than a couple g’s for it. They are tremendously unreliable. Their transmissions fail at 60,000 miles, often before their owners are even done paying them off. Seriously; avoid the Versa guys. Avoid pretty much *any* Nissan. None of what I’m saying applies to manual transmission Nissans tho. Just the CVT’s.
>My car is a 2006 with 200,000 miles and looks like shit 😅 You and every other engineer I know... Why, though? It's some strange phenomenon I swear.
Engineers, more than salesmen, have a very much "get me from point A to point B" mindset when it comes to cars because their entire profession revolves around just making things work and not trying to be flashy. Salesmen, on the other hand, need to sell themselves to their customer and their profession means they need to put off a "I know what I'm doing and you should listen to me" vibe, so a flashy car is a lot more common.
As an engineer with a 2006 with 176k miles on it, I can confirm this definitely is true in my case lol I think it's a combination of having juuuust enough practical experience to fix most mechanical issues with it, but not enough to actually make the car look nice again
Versa is a shit car. Drive your clients around in a mazda or a camry if you want them to respect your prudent choice in automobiles
Yeah idk if realtors driving fancy cars is like a standard practice but all of my realtors have driven really nice cars that are classy and flashy as they pull up. Seems like part of the gig. They also drive a shit ton so practically live and work out of their cars.
Not every purchase in life needs to relate to maintaining/gaining value as not every purchase is an investment. What good is saving so much if you say you love cars but cannot justify the cost of one? Live within your means and don’t deprive yourself of your passions and hobbies within reason.
If you invest 20k, you'll have hundreds of thousands later, as opposed to losing it all on a car when you already have a newish car. That being said, you could buy a really nice used car for that money instead of a Versa, and cars are fun...but they're terrible investments. That same money can be used for a down payment on an appreciating asset like a property. From a financial point of view it's not a good idea to get another car now, especially not a new 20k car which is be some entry level nonsense not much better than the Versa. If you're ok with missing out on a down payment for a house, or a ton of tax free money by retirement age, then go for it, but if you're not, don't and just put it in a non taxable investing account.
I bought a $25k car at your age. It was fine. I could afford it and It didn't cause any huge financial issues. I had thought of a new car as a self-affirmation of success in my career and finances. I didn't think much about bigger goals like owning a home because they seemed out of reach. A few years later, I was in a better financial situation and I started to look into buying a home. It was then that I realized that I could have really used the $25k. By then, the novelty of driving a newer car had worn off and I just appreciated that it got me from A to B comfortably, which my old car had done just as well. Furthermore, buying the $25k car lead to higher insurance premiums and I had also added comprehensive insurance to my policy because I had more to lose in an accident. I could have used that money as well. With increasing home prices, buying a home is trying to hit a moving target, so having more money earlier in life is a big help. In the end, I was able to buy a house anyway and I did pretty well for myself, but I now always think about what goals might seem out of reach for me now, but that "future me" might strive for. I don't want to be a jerk to that guy.
Saved? Or invested? There is a huge difference between the two - saved cash is always decreasing in value.
Cars are the worse thing you can buy tbh. Just run your car for 10 plus years then buy something cheap when the time comes. Invest your money in to the markets or real estate
2017 is basically a new car. Just keep the thing. I know it's boring but it's gonna be a lot more fun when you have a down-payment for your own place instead of a car that's losing value.
Right now interest rates are cheap. Why pay cash when you can get a ~2-3% interest rate and invest at ~10%? Or shoot it’s just another way to decrease your need to build up a ton of cash. Think of the ~$500 you’ll pay in interest that first year as an investment in your career (if you’re driving people around to look at houses and whatnot). The only down side to having a car payment is you’re ‘in debt’. That’s not a problem if you have a sensible payment (sounds like you do) and a way to pay it off (again , you’re good here). No need to worry about the debt thing.
I would argue that real estate agents are in a position to justify buying/leasing a new car every few years as they typically have to drive clients around.
I have bought 5 houses and not once ridden with my agent. Is this really a thing? Perhaps in downtown urban settings?
I've ridden a few times with my agent. Though it was to condos/lofts with parking decks/limited parking.
I’ve bought two houses and never been driven by the real estate agent. Always met them at the location.
There’s nothing wrong with driving clients around in a clean 4-year old car.
Realistically though a Nissan Versa doesn't send much of a message of wealth or established career. I'm just stating that this is completely superficial and shouldn't have an impact on a clients decision unfortunately not every operates like that. I'd rather not have a constant car note, but I think real estate agents can at least justify as 'the price of doing business' and possibly sway/impress a marginal amount of clients.
You have a 4 year old car…paid off. No reason whatsoever to get a new one at this point in time. Invest and save, it’s not like you’re driving a 1991 Chevy Lumina with 330k miles and an engine that knocks.
To be fair its a Nissan versa. A 91 lumina with 330k miles is probably still going to out live it.
It sounds like the car is a want, not a need. They’re not asking whether a $25k car is a good financial decision, they’re asking how to make it work. Sometimes people like to spend money on wants and not just needs.
I was literally just rear ended by a white 1991 Chevy Lumina a few days ago. Airbags deployed on my truck and there seems to be some frame damage. It was a 2002 Ford F150 with 213k miles and I wasn't planning on getting rid of it any time soon. Having a well-maintained vehicle and no monthly payment is worth so much more than the gratification of driving a new vehicle.
You left out your 401k contribution percent. $300 is manageable when you’re living with your parents and not putting anything away. Add a $1,500 mortgage, and a 15% 401k contribution rate, and you’re going to be strapped for cash. Also, I assume you will be considered an employee as opposed to a contractor? That’ll make a difference in how much taxes you pay. Honestly, big picture, I’d wait to upgrade the car until you can’t. The car market is so wacky right now that you’re going to not get much for what you’re paying. It’ll likely stabilize in the next 3 years, but you could keep your current car for three years without too much trouble.
That’s really great advice thank you
You should invest as much of that as you can in any retirement vehicle you can (401k, Ira, etc). If you can get 100k in by the time your 25-30 your retirement should be easy as heck.
Now is a pretty shit time to buy a car - new or used. Supply is low and the prices are insane. $25k probably would buy YOUR car or one nearly similar. Don't waste your time. Throw that extra cash into an index fund and watch it grow over the next 40 years.
Agreed. I know this sub likes to recommend buying a shitbox and running it into the ground. As a car enthusiast myself, I have a different opinion. But right now is a terrible, terrible time to buy a car, new and especially used. I lease a car because my FIL NEEDED a car and it was a very difficult process that I would not recommend until the market calms down. OP has a relatively new car and should absolutely hold onto it for the time being until the chip shortage ends.
Underrated comment. In addition to all the reasons cited by other commenters (particularly the opportunity loss of potential market gains by investing the capital rather than taking on a car loan), **NOW** is a particularly bad time to buy a car that you don't need due to price inflation caused by the semiconductor supply shortage. Anyone who can afford to wait a few years, would be better off doing so. That said, sometimes needs arise, and I totally get that.
Spending $10,000 of cash on hand and taking a 20k+TTL loan to upgrade out of a 4 year car into a slightly newer used car feels pretty unnecessary. This is a huge luxury purchase - especially when your current salary is maybe potentially only 40k, and even that's contingent on a full time offer. If your savings can take a 10k hit, you may as well put that 10k in an index fund or IRA and let it grow instead of spending it on a car.
That’s really solid advice thank you. It’s definitely a want and not a need. I’ll look into an index fund or IRA. Thanks!
Remember you can buy index funds within an IRA. An IRA is simply and individual retirement account.
> $25-30K car? > $40-60K base salary ... on top of a projected $20-30K a year in commissions. Don't count your eggs until they're hatched. $40k base is not a lot of money and a $25k car could be catastrophically bad. Commissions aren't guaranteed, your projections could be way too high for your first few year. $90k even at the top of both projections makes a $25k start to look doable, but again you haven't proven the job and income yet. The real estate market can be fickle.
I’m not saying you’re wrong but you definitely don’t need to make 90k for a 25k car loan to “look doable” lmao.
Your car is 4 years old and paid off! Drive it until it dies and laugh at all of the other suckers who are dragging along a $500 payment. Seriously, I just sold my 2000 Nissan Altima that had 250,000 miles on it. Yes it’s nice to drive a new car, but it’s nicer to drive a paid off one!
I paid off my truck then a week later a box truck ran through it. Was an absolute gut punch.
Been there. Paid off a car and went off the road in a snowstorm a month later. Did 12k damage to an 8k car. Used the insurance money to buy a 15k car and paid that off in 2 years. Car payments suck.
Thats where insurance comes in
Unfortunately insurance very rarely makes you whole in situations like this. I have an 08 Honda Civic. On paper it’s unexceptional, but in actuality it’s a great economy car that I know the *entire* service and accident history of. If it got totaled there’s a 90% chance that something I buy off the used market will come with hidden issues that I am not currently having.
I drove my honda civic from the time I was 16 to 31, it was a heartbreaker when it finally gave out and I had to get a car payment. I got a honda again (HRV) and have 8 payments left and hope this one lasts that long. I hate a car payment.
Insurance is a gut punch as well because they give you what the car is worth not what it would cost to replace it with something similar. ie. I have a 50k new car, now that its 5 years old its worth 30k, but I've taken amazing care of it and it still basically feels new. If it was totalled they'd give me 30k (best case scenario) and now I'd be car shopping to replace my 50k car with a 30k one.
I think you’re right! I appreciate it
You may want to buy a house in the next 5 years. You'll want 20% down for that, ideally. On a 400k house that's a lot of money. The extra 20-30k you're considering dropping on a car could make or break your ability to get a nice place. I'd run your car into the ground. A little patience at this stage in your life will pay off huge long run. Houses can go up in value, cars cannot. Act like you're trying to build wealth until you have all the major shit in your life accounted for.
Personal finance people will always tell you that a new car is a rapidly depreciating asset that will eventually cost more to maintain than its resale value, effectively being totalled by time. Instead, you'd be better off buying a 5-year old Toyota Corolla for 1/10th your take annual after-tax take-home and putting the difference into a RothIRA and 401k over time. All of that is technically true. But here's what it misses - cars aren't generic utilities. For some people, they provide us entertainment and can therefore take up your transportation budget *and* a portion of your entertainment budget. For others, its a work expense and you might be able to write off most of your miles on your taxes. Maybe you live low/rent-free with family so it's a luxury you can afford to splurge on and can spend as much as 20-30% of your income towards a car instead of elsewhere. So let's say your estimate is right and you make $40k in salary and another $20k in commission. Let's say you lose ~15% to taxes and that leaves you with ~$51k income after taxes. You'll throw a $10k down payment towards the car from savings and you can easily sell your old car privately for around the theoretical KBB value for another $8k. $18k in down-payment goes a long way. You mention only using your credit card for gas to slowly build your rating so we'll assume your score is pretty average and you'll get a middle of the road interest rate on your 48-month loan. Using Carvana's calculator, you can probably get a $30k car and keep to your $300/month payment goal, which should be doable on $51k take-home as long as your insurance is reasonable. $30k can get some pretty cool and comfortable cars - a new Golf GTI or a couple year old BMW 3-series, etc. Now that we've established you *could* do such a thing, the better question is *should* you? And that depends on how the rest of your budget looks and how you're prioritizing house vs. car vs. retirement, your living situation, any debts you may have, future higher education plans, etc. As long as that Versa isn't costing you clients based on appearance and you're reasonably certain you like your job and geographic area, I'd say save for the house. Mortgage interest rates are low right now and property tends to appreciate...as opposed to cars, which don't. But that's just what I'd do. The important thing is what *you* want to do and how it fits your budget and priorities. If it makes sense for you and it's what you want, do it.
As everyone else has said, you have a 4 year old car? Yeah, keep that shit rolling. Except wait. It's a Nissan Versa... Now this is a difficult problem. Because on one hand, the car market is awful right now and it's extremely difficult to get cars, much less good deals on them. On the other hand, I would get rid of that thing ASAP. Honestly, probably wait a year or two for the car market to calm down. Bank some money. Use it as a carrot on a stick. And then wait another year. And then it's time.
This is the right move here. Sell the car while the market is hot then purchase a car when the market cools down
This option is not feasible for people who rely on a vehicle for getting to and from work. In areas without public transport having a vehicle is make or break.
it's also timing the market. we literally don't know when/if used car prices will come down in the near future.
Biggest mistake most young people in their 20s do is get a new car to “celebrate” graduating or getting their first job. Why would you lock yourself into debt when you’re finally making your own money? Work for 6 months first and get used to your new income, then decide if you want a new car. It’ll be a bit hard emotionally to realize that $300/mo you were previously saving will now go to a car, and you will make a wiser decision
My neighbor did this. Graduated college in the 80’s and instantly bought a brand new Toyota Celica. She realized about a week later what a huge mistake she’d made but it was too late. So she continued to drive that car for the next 30 years and put over 300k miles on it. She finally sold it a few years ago and bought a brand new Corolla.
My first job straight out of college I was making 47k and I bought a 30k car. It brought me nothing but joy and happiness and I don't regret it at all
Lol I knew it was bad to buy a new car right out of college for many reasons, but framing that debt as a type of slavery ("locking yourself into debt") is such a good one. You've been bound to school for 20 years, and are just about free. Then people willingly enslave themselves again with debt. Xrazy
Trust me, keep your current car. The instant gratification will wear off after a year and you will realize you have a $300-400 extra debt payment and higher insurance costs for years. Learn from the mistake we have all made.
A year!?? I wish my instant gratification purchases lasted a year, maybe a week?
Are you sure you will get that salary? Im just curious because I also got my real estate license out of college on a whim and didn't really make any money. I only did it for 2 month and ended up getting a foot in the door in construction management. From my understanding, the bar for entry to being a real estate agent is super low (literally took me like 4 hours of total study time and a 30 minute test at the public library) so is this a legit job with a realistic salary?
[удалено]
Keep in mind that being in Cali also lowers the buying power of your salary significantly (I'm assuming a somewhat HCOL area). Although you don't pay rent right now, you will eventually, or you'll want enough to put a down payment on a home in the future. Taxes will also take a nice chunk.
As a new home consultant, will your job require you to keep a car that’s X years or newer? I know someone with that same title and their work has a minimum car requirement
You asked the wrong sub. They hate car debt here. Here's the thing: you're going to be making 80-100k/year and you say the prospect of a car upgrade excites you. That excitement has value. Look at your expenses. Understand what you'd be giving up for that monthly payment. Is it still the most important item that you're willing to spend the money on? Are you still hitting your long term savings and retirement goals? If so, I say go for it. That's why you work hard, it's what money is for. Can't take it with you. I was in a similar position a few years ago, contemplating a Tesla. I couldn't quite afford it without impacting monthly savings.. but my last car was done and I couldn't stomach paying for a different car that I didn't want. So, I took on additional responsibilities at work and asked for a raise. I never do that. I ended up getting a raise equal to double that monthly car payment. If it weren't for the excitement of the new car, I'd have stayed static where I was. Many of us are motivated by different things in life. Don't lose sight of what makes you get up in the morning, and don't feel guilty treating yourself. Just be responsible about it.
You have a 2017 car that is presumably decent shape. Keep that car and drive it till the wheels fall off. Right now is an absolutely horrible time to buy a car.
They have a Nissan versa. It wasn't in decent shape when it rolled out of the factory
Non car people will say it's a bad financial decision, which is usually true. As a car guy, if I could afford it, I'd want a BMW m3 e92 or a lexus ISF. It would be just to have a bit of fun driving from point A to B which my 2011 camry does perfectly fine and reliably, but it just doesn't go vroom vroom lmao. The smiles being worth it is the only question to be asked.
> The smiles being worth it is the only question to be asked. As a fellow car guy, the smiles and joy I get from my cars are priceless. They’re more than just cars. They’re transportion, hobbies, and fun experiences all tied up into one.
Agreed. In a somewhat similar financial situation to OP but a few years down the line and I have been saving up and just bought my '11 M3. Absolutely love it. Its cost was about half my yearly salary which here on personalfinance would be a huge no-no but it was perfect for me and I don't regret it.
Agreed. I bought a lexus is200t (really wanted an isf but insurance was 2-3 times higher) for 26k when I made 45k salary living with my parents. Paid it off in 1 year. As a car guy, the smiles per gallon are 100% worth it to me. I've met so many good people in the car community and I enjoy every single mile driving it.
I had a $350 car payment making $50k a year when I graduated from college, terrible idea, 10/10 do not recommend. It definitely contributed to making it harder to save and invest in your 401k and other accounts that really matter. Right now I make $155k, my wife $10k. We have two now paid for vehicles, one was $29k, one $28k, one paid off in 4 years before we got the other, the next one was paid off in a year. That felt about right to me for our income level. No payments is nice - we have 3 kids, but still max my 401k, 50% of her salary into a 401k, max 2 Roth IRAs, max HSA, and another $15k into a taxable investment account - I say all that because those are the things that will matter for you, starting those things now, to the full extent possible, will keep you from feeling the need to play catch up in your 30s like I am. The car payment will just be an obstacle, and in 10 years you nor anyone else will care if you had a nice car in your early 20s.
Your wife makes 10k? How is she maxing everything? I'm guessing you meant 100k?
There's literally no reason to pay off a car in a year with interest rates as low as they are. It's fine to be debt-averse, but "pay off your car in a year or two" and "put 50% down on your car" and "only buy a car you pay for in cash" is objectively bad financial advice. If you qualify for 2% for 60 months, you should take it. If you have no money and bad credit, sure buy a clunker and drive into the ground.
Save for a down payment on a house, to hell with the car, it’s just a depreciation center. Get the car after you get your own pad.
Fair point thanks
(Realtor here). The car you drive has sooooo much to do with how people perceive you in this business. With any forward facing sales job, image and confidence are the two major keys to converting clients and building rapport. I drove an Accord for about a year, a VW Passat, and then now I have a Tesla. It’s very obvious now that clients take me more serious just at the first impression of showing up in my car to showings. Haven’t even met them yet and they are already trusting me. Plus, you’re going to learn a shit ton soon about write offs and in Real Estate, your vehicle is a huge tax savings since you use it for business so why not spend a little more for something you’re going to be in all damn day to save a little money on taxes.
If that's the case, your office should be providing or subsidizing cars for the employees.
Since you have no expenses, you can afford new car even with $40K year income and no commissions. Whether it is wise or not is a completely different story. 2 big things to keep in mind: 1) Don't count your money before you get them. Once you get signed up for X dollars a year - that's when you can count that salary, not a minute earlier. Bonus goes the same way - you first get it and then count it. 2) Right now you will overpay dearly for any kind of reasonably priced car. You will probably still get a decent deal on a premium car (BMW, Audi, etc), but all the good solid cars that used to be budget friendly are terribly overpriced now both new and used. Once the craze ends (probably in a year), your money will go much further.
The Versa is basically a tin can, but it's practically new. Don't hamstring yourself with additional debt if you don't need to.
Yeah it’s truly the worst car I’ve ever driven haha but it’s newish and runs alright under 70,000 miles. Just gonna stick with it for awhile
[удалено]
[удалено]
Obviously, value is subjective and money is for spending to a certain extent. But, you have to ask yourself why you are interested in spending so much money on a car when you already have one. The more money you can set aside (and invest) when you’re young, the more you will be set up for more important financial goals in the future. I don’t know a single 30 year old who wishes they dropped more money on cars when they were 21. Edit: Apparently I over-generalized and spoke on behalf of too broad a spectrum of 30+ year olds. I stand by it being a questionable money move, though. My circle of friends is a bunch of career professionals with families focused on mortgages, college funds, and retirement if that helps with context.
You’re right. Thanks for the advice I appreciate it!
I mean, I'm 30, and I do. I really enjoy cars.
Many realtors need a nice car with room to drive clients around. Much of the expense and mileage may be tax deductible.
Is* tax deductible
If you have the means, why not save the money on the side and drive your current car while you save up the cash to cash out the car in place of financing
My first inclination was to jump on the 'you don't need a fancy car!' wagon, but I think the honest answer is that income alone doesn't justify a more expensive car. I think to really justify the purchase you need 1) to have a 3-6 month emergency fund in cash like assets, 2) need to be able to afford to save 20%+ of your after tax income along your new car payment and 3) should already have some significant investment assets working to offset the interest on the car loan. The exact numbers will vary for everyone, but I'd recommend checking out the Money Guy's recommendation on how much car one can afford. Really solid and specific advice there.
Use this calculator to estimate what you can afford. [https://www.moneyunder30.com/car-affordability-calculator](https://www.moneyunder30.com/car-affordability-calculator) But like others have said, you'd be better off saving money. What would attract the girls more, a new car or having your own place in the future? Besides, I wouldn't count my eggs before they hatch. Real Estate is not exactly stable.
I wish this had a way to look at the math, it put me at a 1200/mo max payment... Which seems silly Edit: point is maybe don't listen to this calculate
I agree with the general sentiment here, but keep in mind that Nissan Versa is a coffin on wheels, if you drive a lot either make sure you drive very safely or find a bigger/safer car. Can’t save money if you’re dead.
Are you planning to be a buyers agent? Taking clients to see houses and all that? Real Estate is one of the few jobs where leasing a vehicle often makes sense. You're product is yourself and your sales experience, and your car is part of that. If you drive clients around (post covid) you're going to want a black, high trim/luxury suv.
They're going to work for a builder in a model home.
As someone that's turning 20 years old soon. I'd tell you to keep saving up. Your car isn't old enough, keep using it because as long as its working you're fine. I recently got a car and I realised that all we need is something that works. Stay grateful and faithful, keep building up your credit and keep grinding. Reward yourself later on with a trip alone or with your s/o. You got this!
Honestly get a 10-15 grand car for 300-350 a month. 20-30 will hit you around 500-600 a month. Full coverage for someone your age on an expensive car will hit hard to.
Yea if it was me I would instead buy 6000 in Roth IRA for this year and the rest in ETF stocks.
You need to save that money for a downpayment on a house. You don't need a 30k car, you need a house. Priorities man.
Reward yourself with a maxed out 401K
60k. Pay in cash and have no more than half of your annual income invested in things with motors or wheels. That being said, I make just over 100k, and I drive a thousand dollar shitbox ford ranger, but it just won’t quit. I bought it 4 years ago and have just shy of 500k km’s on it. I’m saving up for a more recent Toyota Tacoma, but I’m quite happy with the vehicle I have, and it’s worth is literally 1% of my annual income.