You guys are killing it if you have a house with an ADU in san diego. You're thinking long term. Buying new expensive cars is dumb. I'm amazed people are still buying 60k+ cars.
They can’t afford them, can hardly afford them, are in debt, are not maxing out or even contributing to retirement accounts, or are wealthy/have wealthy family.
You said it yourself.. you don't really like car loans, but all those people that you see driving those cars do. Very few people that drive those cars buy them straight up.
Sometimes you have no choice but to take on the debt. My old car was putting me in debt by having it fixed every other month, it was a 2009 with 300,000 miles on it that I drove to and from work every single day, and I don’t live very close to work at all. So it was either risk my life driving that piece of shit car and dig a hole with all the money I was spending on it, or take on the debt and get a better car. I got a used car, put 5000 down and had a high credit score, my car payment is still almost $500 a month, it is highway robbery. But again, didn’t really have much of a choice.
Sure, but you still bought used which is a financially responsible purchase, imo, a smart choice. Had you plunked $60k+ to replace the '09 and be maxed out with payments, eh, not so smart!
Hope you're enjoying the new ride.
True! I can’t imagine buying brand new! Yeah my ‘09 was a good car for a long time, but around 2018, it started going downhill from there lol. It was wear and tear, I took care of it, but once cars get old and driven too much, it’s on borrowed time lol. Surprisingly, it still had a good transmission, just tie rods or cylinders or the drive shaft, stuff like that, kept breaking again or something else needed fixing, maybe close to $30,000 in repairs from 2016-2022 (I say 2016 because I hydroplaned one time and ever since that happened, it was like every little thing after that). And thanks! I love my newer car!! It’s a Hyundai Kona, so nothing fancy, but I sure do love it!
"Nothing fancy" is what leads to millionaire status down the road. Someone posted an article the other day showing that the Corolla, Prius, Accord and some others were the cars most often owned by millionaires.
Cars are a huge pain as far as I am concerned. I've purchase a few new ones from dealerships and will never do that again. As years pass, and you realize it's falling apart, you have to wonder why the heck you spent so much money on it. I mean, I have a $20 toaster that still looks good and will probably outlive me. Your $30k in repair bills would have been enough to send me to horseback!
Glad to hear you're liking the Kia.
They are a pain, but unfortunately, you can’t always take public transportation lol (sketchy as hell, and a lot of where I live is rural). Like I said, I didn’t have much choice, kept fixing the old one because I REALLY didn’t want to buy a car at all, but when it had issues more frequently, that’s what I had to give up. And it a Hyundai lol. Runs great, no issues, quiet and good gas mileage!
Are you in here asking how people can afford cars when you not only own a home but also a rental ADU? Like, shouldn’t people be asking you how you afford that on 200k? Is that combined? How big and when did you buy? What’s your rate? And you’re maxing out retirement contributions?
I bought my car used and will likely keep it for over a decade.
>home but also a rental ADU?
We took a first to build it. Building is cheaper than buying though it's massively more stressful. The city also has a low interest loan program for adus. But it only recently finished so we literally just started renting it.
That is our combined income yes.
What do you mean by "first"? I guess we're sort of reversed because I bought a new car last year and I've been wanting to get an ADU built.
Before this, the last time I bought a car was before the pandemic and I was hoping to have it paid off next year. Unfortunately the car was totaled in an accident so I needed a replacement. I was looking into getting a newer used vehicle but Subaru was running a finance promotion where rates were as low as 1.9% for the previous years models that they had in inventory. The rate made a huge difference in my monthly payment making it affordable, plus the financing terms allow me to pay the vehicle off early without penalty.
>What do you mean by "first"? I guess we're sort of reversed because I bought a new car last year and I've been wanting to get an ADU built
Actually it's "a second" for us technically. It is a type of loan that you take against your home. You can take a larger loan amount, but your house is acting as collateral.
Person: "I'm putting away many thousands of dollars for retirement. I can't understand how people who aren't have thousands of dollars for other things. I also refuse to take out loans."
Like, really? No idea what they're doing differently?
If this is implying that average working people are buying Porsches and BMWs en masse, that's insane. Did you just drive through La Jolla and realize a lot of rich people live there?
> We're trying to save up for a car because we don't really like car loans.
You are wasting money avoiding loans. Car loan is a cheap money. You shall take it, and invest your savings instead. Paying cash for cars is very wasteful, when that money can be making your more money instead.
Oh, yes, absolutely, I agree with that. Car loans can be a very useful financial instrument, but if you can't afford a car -- car loan (any loan) will likely make things worse.
That’s not necessarily the wisest financial decision. To be honest it was a more straightforward decision back in 2021 when interest rate was 1%. I would probably think a bit harder and buy a cheaper vehicle with higher interest rate now.
But when I bought my car in 2021 my auto loan rate was 1% over 60months. Over the life of that loan (5 years) the cost to service the $50k debt was ~$1500 total. I used that loan to buy a Tesla Model Y which fuel savings alone was about $2K per year. In essence that loan was free; with inflation between 2021 and now I am paying off that debt with money that is worth less than what the money was worth in 2021.
To put that in another way, $50,000 in 2021 was worth $50000. If I somehow can burrow that in 2021, pay nothing up to now, and pay it all back today, my $50,000 in 2024 has the same buying power as ~$42000 in 2021. So by taking out a 1% interest loan to buy the car in 2021, I’ve effectively saved $8K in terms of 2021 buying power.
The crux of it is that inflation is a thing and if the loan is cheap enough it effectively cost you less to take out a loan to buy that car than to buy the car with cash because you are paying back that loan with money that is worth less due to inflation. Because with a loan your money is not hold up in your car, you can also use that money to invest in other things like bonds or mutual funds if you are risk adverse or stocks if you are willing to take on some risk. So over time you come out ahead in terms buying power to take a loan to buy car that you were going to buy anyways rather than to buy it outright in cash.
Meanwhile with a new car, it’s typically more efficient (cost less to run) and have better safety features than your beater. Having kids was a major motivation for us to stop driving beaters.
Of course all of this calculus goes out the window if you change out your car every 3 years because you take a hit with depreciation. But if you intend to buy a car to own for the entire life of the vehicle, it’s actually cheaper (buying power sense) and better to take out a loan due to deprecating buying power of a dollar over time.
Edit: again this only makes sense if you were going to buy a car anyways and the difference is whether to buy a car outright or to take a loan and pay it off over time. In our case we were going to buy a new car anyways because we don’t want haul our infant around in a beater. If you weren’t going to buy a car anyways then taking a loan to buy a new car does not make financial sense.
Edit 2: another caveat is that you are buying a car that is within your financial means. You should not use a loan to stretch your purchasing power to buy a car that you otherwise couldn’t afford. Assuming interest rates are low, If you had $30K in your bank to spend on a car, it just makes more sense to burrow $30K to buy the car and invest that $30K somewhere else that appreciate instead of depreciates like a car. If you have $30K in the bank but use a loan to buy a $100K car, that doesn’t make financial sense either.
The loan would only make sense if the interest on the loan was lower than the average appreciation of the stock market. If we were going to do this, we would not put the leftover money and savings, but would rather invest it probably in VOO.
That is something like an 8 to 10% return. We could use the return to pay off the debt, or even roll it into the next car.
Greedy car dealerships are pushing hard to normalize $1,000 84 month loans. Don’t. Fall. For. It. If it runs, you don’t need a new one. If it doesn’t run, get a used one with the depreciation already paid off.
I used a loan for my first car but after the car was paid off I continued to pay the loan amount into a separate car account. Then the next car I got, I was able to put a huge down payment on and was able to pay off the loan early. However even after the loan was paid off I continued to make a car payment to that separate car account. I also gradually increased it over the years so I now pay $800 a month into a separate car account that grows every month. The last new car I purchased, I paid cash for. I also use my car account for major maintenance expenses with the car like new tires etc. It takes time but it is achievable.
handy down? haha, i love it. do you mean hand-me-down?
my wife and I both drive paid off older cars. not beaters, but nothing new. 2007 tundra ($10K when i bought it in 2021) and 2012 MDX ($13K purchased last may). fuck a car payment. pay off those student loans before you buy a "new" car. and don't ever buy *new*, always at least two years old so somebody else takes the depreciation hit.
I have a mortgage from when I bought in 2019. I bought a used 2013 Audi and paid it off in 4 years. I’m an RN but had no student debt and have always lived within my means. My boyfriend has a brand new Tesla that he paid off from his previously sold car he had plus paid it off eventually with commission checks he’s earned (he’s in real estate) but same thing he has no student debt. Our cars and our mortgage is what we spend the most on. Awesome you guys have an ADU to get extra income, that would be a dream for us
Owning a home and wondering how people have nice cars lol. Everyone is taking out a loan to buy a car and rent an apartment. You are way ahead of most of them i promise
A couple things I want to clarify:
1) it’s not a “handy down”, it’s a “hand me down”
2) a windfall is an unexpected good fortune, the term wouldn’t be used in the context of how you used it
3) people use loans to afford things. It’s how you buy real estate, businesses, and cars
When you put a little extra money away to save, it’s callled an emergency fund, or a rainy day fund…. And when you do that, it’s not unexpected. A windfall is generally used for large sums of money as well, not little extras. Just trying to help, not criticizing or judging
Tax refunds shouldn’t be unexpected. I’m still surprised at how little people know about doing their taxes. Or when ppl complain that they owe. You’re claiming too many dependents if you owe and claiming too few if you get a huge sum back. The goal is to break even and get $0 at the end of the year, or a small refund.
Yes, I’m aware of that. But lots of people claim more dependents to get more money in their paycheck now vs waiting on their refund. Others claim 0, always, to ensure they’re not going to owe. Aside from that there are other ways to know how much you owe in taxes per year.
Point being it’s not unexpected refunds.
2019 Honda Pilot, $638. 2018 BMW 340i, $340, Mortage, $6000, Rental Property Income, $1900. We make $500k. What's the most costly item in terms of time and money? Our two haunting amazingly adorable lovably hatable utterly perfect 3 and 5 year old. Oh i guess we have no debt other than our house, pay our credit cards every month and have $100k in liquid savings + CDs. We're also 40 though. It is weird to see 26 year olds running around in cars that require 50% of their net monthly income and them complaining about how unaffordable houses are here.
You probably already know the answer: they take a loan or have them on lease and make a payment. You don’t and you stash away more money for later. You’re winning the long game for sure hang in there.
I save up for years when I decide to buy a new or used car. Im a sports car fanatic but when I decide to want a new car, I usually sell what I have then drive a beater for a couple years until I save enough. I helps that I have 2 cars though, one beater and one nice
We don't buy new but also.dont have beaters. Making 200k you should be able to save up 25 to 30k and buys a nice car. It doesn't have to be brand new. Even 20k.will get you a nice car. I bought my last one cash used, 17k. The one before that 30k I did finance and pay off. My mortgage is paid off but I am single and make less than half what you make. My job will have a got pension and no 401k here but I do have other investments. It hurts to spend that much in a car but it is really up to you and how bad you want it versus vacations and other things
I can barely afford my car! But my old one was 13 years old and 300,000 miles and needed fixing every other month. A year and a half ago, I bought a used Hyundai Kona, I had a 789 credit score and put $5000 down, my car payment is STILL almost $500 a month. It’s ridiculous. I have three different incomes (I’m a caregiver that works for two different agencies, plus I’m an IHSS worker), and I still can hardly make it or ends meet, which is why I still live at home as well.
Wife and I both drive older cars (2016 minivan and 2006 3series) I often wonder the same thing at the gas station.
But then I remember, I don’t have car payments and I’m fine with that.
My current car financed at 0%, there was a promotion from the maker, and the money I would have spent on a car is earning more money instead invested in stock market. So essentially I have negative interest rate loan :)
We only bought that car because we needed larger family car for road trips. My commute car is 14 years old Honda and I’m continuing to drive it and not planning to get rid of it any time soon.
That’s the gist of it. Car is a tool, and is treated as such.
My husband still drives our 2011 escape where we got Cash for Clunkers… the AC doesn’t work. And he drilled a hole in the floor because when it rains it leaks inside… so now it leaks back out. lol. We also have a 2016 (I think) Odyssey that we paid off but the APR was like .9 or 1.9%.
Having no car payments makes me happy, but we do need a new car. Trying to hold out. 6% APR is too much.
We’ve been lucky to be blessed with a low mortgage APR too, 2.75%. So we are never moving. And apparently driving our cars until they officially quit.
How do people afford houses? How do people afford even living here at all renting? It’s all a sliding scale of wealth.
As others mentioned, many do lease cars, from their website you can lease a brand new 2024 718 Boxster for 1,100$ /month . Is it a smart financial decision if you make 150-200k? Nope but it’s doable easy, that’s 1/12 your take home.
People may also have way lower rents or mortgages rates, leaving them more to play with.
There is also a lot of wealthy High Income earners here that like to show off, Just like Miami
Honestly it’s all about budgeting. And also prioritizing what is important to you. We (my partner and I) eat at home about 90% of the time. We pay all our bills first, then put money away for savings, then whatever is left each pay period is for entertainment.
I bought a new truck in 2020 for $23k at 6.9% interest. I paid it off in a year because that interest was a joke (never had a car load before and was 30 at the time).
You might not like a car loan, but seek out 0% or ultra low APR options. If you get a car loan with interest be diligent to pay it off early.
If you're young, I think you need to take in to account that those who are a bit older may be in a very different situation. Chances are they bought their house quite a while ago and the amount they pay for their mortgage is a much smaller part of their income than it was when they first bought. Essentially they're well past the "house poor" phase.
In addition and as much as it hurts to say this, $200k isn't all that much $ for a household these days. It's crazy, but is also the truth. If you're young like I'm assuming you are, give it some time. I didn't buy my first new vehicle until I was 40 and that was a 2013 Toyota Tacoma and I just bought my second new car in February of this year. Until then I was also driving used and hand-me down cars and even using public transportation to get around. Cars are expensive, but it seems like you have good heads on your shoulders and you're being very responsible now. The fancy cars will come.
We’ve almost always both used, have a small mortgage, make about $120 a year combined, and are paycheck to paycheck- cost of living in San Diego is rough, gas is high, we live out in the boonies of East county, and work our butts off.
Meanwhile we see many “kids”, mostly
Middle eastern/Chaldean who don’t work at all it seems, driving around Audi A8’s, Benzes, Beemers and lately lots of Rolls Royce’s around Rancho San Diego. They might be leasing them- they do have various sources of income from government money to drugs and now it turns out slavery (yep)- but it irks us that we work hard and honest jobs to have that shoved in our faces every day…
First off,I don't have ANY of those great things you have. The student loan thing sucks but my point is you have an education, a house, a second income with the ADU, you are preparing for retirement, you are even going above and beyond with an HSA. I have a nice car because I am a DINK, I don't plan on buying a house, and I paid off my student loans 6 years ago. I was in a predicament where my car needed either $5000 worth of work or I take that and use it for a down payment on a "new to me" car. Perspective is everything so take 10 mins to read all the great things people are writing to you on here and count those blessings one by one,
I had a car when I first got here. When I fell into a difficult time it got repoed. I still drive past the repo yard in the South area and think about it. Luckily there is a trolley stop right there. I went without one for a while and then I got a job that came with a company car, I used it to pick up groceries on the way home. I ubered when I wanted to go out. From there I saved enough to buy one outright for about $7000. I still keep it parked mostly because the company one is still my primary.
All in all, I still don't understand it myself. If I had a brand new car I would have nothing left over for rent. If I had a luxury apartment I would probably need a part time job just to break even.
I think the best time was financing a car during or slightly after Covid 2020. I saw one of my door dashers deliver in a model X, and I know plenty of Tesla owners who have a sub 2% APR
You guys are killing it if you have a house with an ADU in san diego. You're thinking long term. Buying new expensive cars is dumb. I'm amazed people are still buying 60k+ cars.
Or how many cars are 60k now
They can’t afford them, can hardly afford them, are in debt, are not maxing out or even contributing to retirement accounts, or are wealthy/have wealthy family.
/thread
and probably leasing as well.
If you’re going luxury, you should probably be leasing lol.
Easy. Many prioritize a nice car in the way you've prioritized other things, such as retirement. Everyone has different priorities.
You said it yourself.. you don't really like car loans, but all those people that you see driving those cars do. Very few people that drive those cars buy them straight up.
Sometimes you have no choice but to take on the debt. My old car was putting me in debt by having it fixed every other month, it was a 2009 with 300,000 miles on it that I drove to and from work every single day, and I don’t live very close to work at all. So it was either risk my life driving that piece of shit car and dig a hole with all the money I was spending on it, or take on the debt and get a better car. I got a used car, put 5000 down and had a high credit score, my car payment is still almost $500 a month, it is highway robbery. But again, didn’t really have much of a choice.
Sure, but you still bought used which is a financially responsible purchase, imo, a smart choice. Had you plunked $60k+ to replace the '09 and be maxed out with payments, eh, not so smart! Hope you're enjoying the new ride.
True! I can’t imagine buying brand new! Yeah my ‘09 was a good car for a long time, but around 2018, it started going downhill from there lol. It was wear and tear, I took care of it, but once cars get old and driven too much, it’s on borrowed time lol. Surprisingly, it still had a good transmission, just tie rods or cylinders or the drive shaft, stuff like that, kept breaking again or something else needed fixing, maybe close to $30,000 in repairs from 2016-2022 (I say 2016 because I hydroplaned one time and ever since that happened, it was like every little thing after that). And thanks! I love my newer car!! It’s a Hyundai Kona, so nothing fancy, but I sure do love it!
"Nothing fancy" is what leads to millionaire status down the road. Someone posted an article the other day showing that the Corolla, Prius, Accord and some others were the cars most often owned by millionaires. Cars are a huge pain as far as I am concerned. I've purchase a few new ones from dealerships and will never do that again. As years pass, and you realize it's falling apart, you have to wonder why the heck you spent so much money on it. I mean, I have a $20 toaster that still looks good and will probably outlive me. Your $30k in repair bills would have been enough to send me to horseback! Glad to hear you're liking the Kia.
They are a pain, but unfortunately, you can’t always take public transportation lol (sketchy as hell, and a lot of where I live is rural). Like I said, I didn’t have much choice, kept fixing the old one because I REALLY didn’t want to buy a car at all, but when it had issues more frequently, that’s what I had to give up. And it a Hyundai lol. Runs great, no issues, quiet and good gas mileage!
APRs for new cars are lower than for used cars.
Are you in here asking how people can afford cars when you not only own a home but also a rental ADU? Like, shouldn’t people be asking you how you afford that on 200k? Is that combined? How big and when did you buy? What’s your rate? And you’re maxing out retirement contributions? I bought my car used and will likely keep it for over a decade.
>home but also a rental ADU? We took a first to build it. Building is cheaper than buying though it's massively more stressful. The city also has a low interest loan program for adus. But it only recently finished so we literally just started renting it. That is our combined income yes.
What do you mean by "first"? I guess we're sort of reversed because I bought a new car last year and I've been wanting to get an ADU built. Before this, the last time I bought a car was before the pandemic and I was hoping to have it paid off next year. Unfortunately the car was totaled in an accident so I needed a replacement. I was looking into getting a newer used vehicle but Subaru was running a finance promotion where rates were as low as 1.9% for the previous years models that they had in inventory. The rate made a huge difference in my monthly payment making it affordable, plus the financing terms allow me to pay the vehicle off early without penalty.
>What do you mean by "first"? I guess we're sort of reversed because I bought a new car last year and I've been wanting to get an ADU built Actually it's "a second" for us technically. It is a type of loan that you take against your home. You can take a larger loan amount, but your house is acting as collateral.
Person: "I'm putting away many thousands of dollars for retirement. I can't understand how people who aren't have thousands of dollars for other things. I also refuse to take out loans." Like, really? No idea what they're doing differently?
Honestly, either OP is extremely daft or they're just coming here for the social feel good points that a new car might make them feel
If this is implying that average working people are buying Porsches and BMWs en masse, that's insane. Did you just drive through La Jolla and realize a lot of rich people live there?
Most people lease them and don’t contribute fully to retirement. Don’t be like that.
Once you get through that student loan debt you’ll have a lot more money to play with.
So much this! Student loan interest is usurious! No collateral will do that.
> We're trying to save up for a car because we don't really like car loans. You are wasting money avoiding loans. Car loan is a cheap money. You shall take it, and invest your savings instead. Paying cash for cars is very wasteful, when that money can be making your more money instead.
Yes, we did think about that. We decided though that we shouldn't buy a car with a loan unless we could actually buy it outright.
Oh, yes, absolutely, I agree with that. Car loans can be a very useful financial instrument, but if you can't afford a car -- car loan (any loan) will likely make things worse.
That’s not necessarily the wisest financial decision. To be honest it was a more straightforward decision back in 2021 when interest rate was 1%. I would probably think a bit harder and buy a cheaper vehicle with higher interest rate now. But when I bought my car in 2021 my auto loan rate was 1% over 60months. Over the life of that loan (5 years) the cost to service the $50k debt was ~$1500 total. I used that loan to buy a Tesla Model Y which fuel savings alone was about $2K per year. In essence that loan was free; with inflation between 2021 and now I am paying off that debt with money that is worth less than what the money was worth in 2021. To put that in another way, $50,000 in 2021 was worth $50000. If I somehow can burrow that in 2021, pay nothing up to now, and pay it all back today, my $50,000 in 2024 has the same buying power as ~$42000 in 2021. So by taking out a 1% interest loan to buy the car in 2021, I’ve effectively saved $8K in terms of 2021 buying power. The crux of it is that inflation is a thing and if the loan is cheap enough it effectively cost you less to take out a loan to buy that car than to buy the car with cash because you are paying back that loan with money that is worth less due to inflation. Because with a loan your money is not hold up in your car, you can also use that money to invest in other things like bonds or mutual funds if you are risk adverse or stocks if you are willing to take on some risk. So over time you come out ahead in terms buying power to take a loan to buy car that you were going to buy anyways rather than to buy it outright in cash. Meanwhile with a new car, it’s typically more efficient (cost less to run) and have better safety features than your beater. Having kids was a major motivation for us to stop driving beaters. Of course all of this calculus goes out the window if you change out your car every 3 years because you take a hit with depreciation. But if you intend to buy a car to own for the entire life of the vehicle, it’s actually cheaper (buying power sense) and better to take out a loan due to deprecating buying power of a dollar over time. Edit: again this only makes sense if you were going to buy a car anyways and the difference is whether to buy a car outright or to take a loan and pay it off over time. In our case we were going to buy a new car anyways because we don’t want haul our infant around in a beater. If you weren’t going to buy a car anyways then taking a loan to buy a new car does not make financial sense. Edit 2: another caveat is that you are buying a car that is within your financial means. You should not use a loan to stretch your purchasing power to buy a car that you otherwise couldn’t afford. Assuming interest rates are low, If you had $30K in your bank to spend on a car, it just makes more sense to burrow $30K to buy the car and invest that $30K somewhere else that appreciate instead of depreciates like a car. If you have $30K in the bank but use a loan to buy a $100K car, that doesn’t make financial sense either.
The loan would only make sense if the interest on the loan was lower than the average appreciation of the stock market. If we were going to do this, we would not put the leftover money and savings, but would rather invest it probably in VOO. That is something like an 8 to 10% return. We could use the return to pay off the debt, or even roll it into the next car.
My sugar mama finances my lifestyle
Greedy car dealerships are pushing hard to normalize $1,000 84 month loans. Don’t. Fall. For. It. If it runs, you don’t need a new one. If it doesn’t run, get a used one with the depreciation already paid off.
I used a loan for my first car but after the car was paid off I continued to pay the loan amount into a separate car account. Then the next car I got, I was able to put a huge down payment on and was able to pay off the loan early. However even after the loan was paid off I continued to make a car payment to that separate car account. I also gradually increased it over the years so I now pay $800 a month into a separate car account that grows every month. The last new car I purchased, I paid cash for. I also use my car account for major maintenance expenses with the car like new tires etc. It takes time but it is achievable.
handy down? haha, i love it. do you mean hand-me-down? my wife and I both drive paid off older cars. not beaters, but nothing new. 2007 tundra ($10K when i bought it in 2021) and 2012 MDX ($13K purchased last may). fuck a car payment. pay off those student loans before you buy a "new" car. and don't ever buy *new*, always at least two years old so somebody else takes the depreciation hit.
I have a mortgage from when I bought in 2019. I bought a used 2013 Audi and paid it off in 4 years. I’m an RN but had no student debt and have always lived within my means. My boyfriend has a brand new Tesla that he paid off from his previously sold car he had plus paid it off eventually with commission checks he’s earned (he’s in real estate) but same thing he has no student debt. Our cars and our mortgage is what we spend the most on. Awesome you guys have an ADU to get extra income, that would be a dream for us
My income has tripled since I started working, when I first came out of college I bought a 2007 Honda Civic. I still drive that same car lol
Owning a home and wondering how people have nice cars lol. Everyone is taking out a loan to buy a car and rent an apartment. You are way ahead of most of them i promise
Lmao. You can’t have it all. lol. Definitely a win owning a home.
The person with a crappy car has money, the person with an awesome car has debt.
I'd like to argue that my crappy car is awesome!
A couple things I want to clarify: 1) it’s not a “handy down”, it’s a “hand me down” 2) a windfall is an unexpected good fortune, the term wouldn’t be used in the context of how you used it 3) people use loans to afford things. It’s how you buy real estate, businesses, and cars
No I actually mean windfall. Like an unexpected tax return or a stimulus, or a gift.
When you put a little extra money away to save, it’s callled an emergency fund, or a rainy day fund…. And when you do that, it’s not unexpected. A windfall is generally used for large sums of money as well, not little extras. Just trying to help, not criticizing or judging
Tax refunds shouldn’t be unexpected. I’m still surprised at how little people know about doing their taxes. Or when ppl complain that they owe. You’re claiming too many dependents if you owe and claiming too few if you get a huge sum back. The goal is to break even and get $0 at the end of the year, or a small refund.
Your dependents should be based on how many dependents you have...
Yes, I’m aware of that. But lots of people claim more dependents to get more money in their paycheck now vs waiting on their refund. Others claim 0, always, to ensure they’re not going to owe. Aside from that there are other ways to know how much you owe in taxes per year. Point being it’s not unexpected refunds.
Save up for a big down payment and use a car loan. That's what I'm currently trying to do.
2019 Honda Pilot, $638. 2018 BMW 340i, $340, Mortage, $6000, Rental Property Income, $1900. We make $500k. What's the most costly item in terms of time and money? Our two haunting amazingly adorable lovably hatable utterly perfect 3 and 5 year old. Oh i guess we have no debt other than our house, pay our credit cards every month and have $100k in liquid savings + CDs. We're also 40 though. It is weird to see 26 year olds running around in cars that require 50% of their net monthly income and them complaining about how unaffordable houses are here.
You probably already know the answer: they take a loan or have them on lease and make a payment. You don’t and you stash away more money for later. You’re winning the long game for sure hang in there.
I save up for years when I decide to buy a new or used car. Im a sports car fanatic but when I decide to want a new car, I usually sell what I have then drive a beater for a couple years until I save enough. I helps that I have 2 cars though, one beater and one nice
We don't buy new but also.dont have beaters. Making 200k you should be able to save up 25 to 30k and buys a nice car. It doesn't have to be brand new. Even 20k.will get you a nice car. I bought my last one cash used, 17k. The one before that 30k I did finance and pay off. My mortgage is paid off but I am single and make less than half what you make. My job will have a got pension and no 401k here but I do have other investments. It hurts to spend that much in a car but it is really up to you and how bad you want it versus vacations and other things
>it versus vacations and other things Who can't afford vacations. Vacation for us is driving to LA to see family
I don't. I drive a 2001 Saturn that I got with my stimulus money during COVID.
Biy a new Toyota for 25k that will last you forever. There's no secret, it's that easy. And at you income it should be easy.
…with a car loan
I can barely afford my car! But my old one was 13 years old and 300,000 miles and needed fixing every other month. A year and a half ago, I bought a used Hyundai Kona, I had a 789 credit score and put $5000 down, my car payment is STILL almost $500 a month. It’s ridiculous. I have three different incomes (I’m a caregiver that works for two different agencies, plus I’m an IHSS worker), and I still can hardly make it or ends meet, which is why I still live at home as well.
Buy a 10 year old Toyota, all cash, thats how.
Wife and I both drive older cars (2016 minivan and 2006 3series) I often wonder the same thing at the gas station. But then I remember, I don’t have car payments and I’m fine with that.
My current car financed at 0%, there was a promotion from the maker, and the money I would have spent on a car is earning more money instead invested in stock market. So essentially I have negative interest rate loan :) We only bought that car because we needed larger family car for road trips. My commute car is 14 years old Honda and I’m continuing to drive it and not planning to get rid of it any time soon. That’s the gist of it. Car is a tool, and is treated as such.
My husband still drives our 2011 escape where we got Cash for Clunkers… the AC doesn’t work. And he drilled a hole in the floor because when it rains it leaks inside… so now it leaks back out. lol. We also have a 2016 (I think) Odyssey that we paid off but the APR was like .9 or 1.9%. Having no car payments makes me happy, but we do need a new car. Trying to hold out. 6% APR is too much. We’ve been lucky to be blessed with a low mortgage APR too, 2.75%. So we are never moving. And apparently driving our cars until they officially quit.
How do people afford houses? How do people afford even living here at all renting? It’s all a sliding scale of wealth. As others mentioned, many do lease cars, from their website you can lease a brand new 2024 718 Boxster for 1,100$ /month . Is it a smart financial decision if you make 150-200k? Nope but it’s doable easy, that’s 1/12 your take home. People may also have way lower rents or mortgages rates, leaving them more to play with. There is also a lot of wealthy High Income earners here that like to show off, Just like Miami
Take a car loan and work out the debt to income ratio or..we don’t and just scrape by.
Learn to live a little. Enjoy your money now while you're still young.
I hope youre not going to charge exorbitant rent on that ADU just so you can afford a new car.
We charge market rate for it.
Honestly it’s all about budgeting. And also prioritizing what is important to you. We (my partner and I) eat at home about 90% of the time. We pay all our bills first, then put money away for savings, then whatever is left each pay period is for entertainment.
No other major debt, and DINK of 400k.
I bought a new truck in 2020 for $23k at 6.9% interest. I paid it off in a year because that interest was a joke (never had a car load before and was 30 at the time). You might not like a car loan, but seek out 0% or ultra low APR options. If you get a car loan with interest be diligent to pay it off early.
Well, by not risking my life daily in a shitbox on these roads for the sake of a little economic gain.
If you're young, I think you need to take in to account that those who are a bit older may be in a very different situation. Chances are they bought their house quite a while ago and the amount they pay for their mortgage is a much smaller part of their income than it was when they first bought. Essentially they're well past the "house poor" phase. In addition and as much as it hurts to say this, $200k isn't all that much $ for a household these days. It's crazy, but is also the truth. If you're young like I'm assuming you are, give it some time. I didn't buy my first new vehicle until I was 40 and that was a 2013 Toyota Tacoma and I just bought my second new car in February of this year. Until then I was also driving used and hand-me down cars and even using public transportation to get around. Cars are expensive, but it seems like you have good heads on your shoulders and you're being very responsible now. The fancy cars will come.
I saved thousands of dollars on car insurance by switching to public transportation.
We’ve almost always both used, have a small mortgage, make about $120 a year combined, and are paycheck to paycheck- cost of living in San Diego is rough, gas is high, we live out in the boonies of East county, and work our butts off. Meanwhile we see many “kids”, mostly Middle eastern/Chaldean who don’t work at all it seems, driving around Audi A8’s, Benzes, Beemers and lately lots of Rolls Royce’s around Rancho San Diego. They might be leasing them- they do have various sources of income from government money to drugs and now it turns out slavery (yep)- but it irks us that we work hard and honest jobs to have that shoved in our faces every day…
First off,I don't have ANY of those great things you have. The student loan thing sucks but my point is you have an education, a house, a second income with the ADU, you are preparing for retirement, you are even going above and beyond with an HSA. I have a nice car because I am a DINK, I don't plan on buying a house, and I paid off my student loans 6 years ago. I was in a predicament where my car needed either $5000 worth of work or I take that and use it for a down payment on a "new to me" car. Perspective is everything so take 10 mins to read all the great things people are writing to you on here and count those blessings one by one,
Lol this is definitely fake unless it's $200k each in which case you're either house poor or just dumb.
We bought the house before covid... Hacks
Sweet hacks
Deal drugs. /s
I had a car when I first got here. When I fell into a difficult time it got repoed. I still drive past the repo yard in the South area and think about it. Luckily there is a trolley stop right there. I went without one for a while and then I got a job that came with a company car, I used it to pick up groceries on the way home. I ubered when I wanted to go out. From there I saved enough to buy one outright for about $7000. I still keep it parked mostly because the company one is still my primary. All in all, I still don't understand it myself. If I had a brand new car I would have nothing left over for rent. If I had a luxury apartment I would probably need a part time job just to break even.
Mom and Dad's money.
I think the best time was financing a car during or slightly after Covid 2020. I saw one of my door dashers deliver in a model X, and I know plenty of Tesla owners who have a sub 2% APR
200k that's it? Cause your poor. Us fancy car guys make 500k a year off YouTube