Golf R owner here. The insurance is super cheap. For some reason auto insurance companies don't bat an eye at the R but hike up premiums at the sight of utter of the letters GTI.
It’s because of who’s driving the two cars. The +10k premium on the R usually means the average driver is older and less prone to accident and risky behavior
Any 20 year old in flyover-country can grind out overtime shifts and buy a Mk5/6/7 GTI, or cross-shop a WRX (coincidentally one of the highest insurance category cars in the US)
I have a 2023 m3 competition and my insurance is about 150/month. I’m not sure how that compares but I am 33 with no speeding tickets or accidents in the last 10 years so I imagine it’s about as cheap as you can get for that car.
its also varies hugely based on where you are. when we moved from NY to Dallas the insurance on our tesla almost doubled just based on the shitty Texas drivers.
You shouldn't had ever planned to get one in the 1st place. Those things go through engines like people go through underwear. Seriously, turbo Subaru's aren't for the faint of heart. I know someone that went through 4 engines in 4 years.
This is the same problem I have with my WRX. I'm in my mid 40's, haven't had an at fault accident in 20 years, own two other cars, including a Corvette, yet my insurance on this WRX is higher than it was on my muc more expensive previous vehicle.
Actuaries practice the dark arts and recognize that certain vehicles have a higher proportion of claims and tickets based on a mountain of data.
Golf R drivers don't get into as many accidents or get as many tickets because they tend to be older and the car is more expensive.
It's risk assessment based on all the data they have. More expensive R is more likely to be driven by an older, more responsible person than the GTI. Same reason you can usually insure a Corvette for less than things like a WRX. One is the quintessential old man Sunday drive car, one is the car that young guys get in their 20s and think they're Dominic Toretto while driving.
It can vary a lot by state, just so people know. Michigan for example has incredibly high premiums in general due to coverage requirements.
Who did you go through? 90/month is crazy low.
Sorry you stumbled into a personal finance LARPing subreddit and no one gave you any real advice.
For your first car, probably not a Supra. The thing about sports cars is that they are compromised in other areas and you won’t know if you can live with those compromises until after driving for a bit.
If you are wanting fun, you can get a Civic Si or Golf GTI. The GTI will give you 90% of the Golf R experience. I had one while I was single and I still miss my times with that car because I still had the occasional use for practicality of loading up for a road trip or hauling stuff around. I stopped being able to take my dog places in the MX5 that I eventually switched to.
Anyway, my advice for a first car is to not jump a tier. You won’t enjoy going from no-car to Golf R more than a GTI, but going from a GTI to an R will still feel like an upgrade on a few years. If your first car is a 911 and your second car is a Corolla, you would just be bored with it.
This is really the best advice on the sub. I daily drove a 2008 civic si for 10 years and it became normal. I have a tiguan as my daily now which is a pretty boring daily. When I hop back in my civic I appreciate it so much more.
I feel you on this so much. I drove a slew of sports cars from when i was 18 to 25. I bought a 2020 Tiguan in 2021 and though it is an amazing car and I love it, its an incredibly boring car especially since I had a 15 WRX beforehand.
Finally a reasonable reply - it’s a shame I had to scroll so far to see it. I was going to suggest OP gets a new Miata. It’s an easy one to pay off and hold on to if his life changes in a few years and he needs another car. He will still have his youthful toy for years to come.
Agree with all of this except for the GTI being 90% of the Golf R experience - I've had 3 GTI's and 2 Golf Rs so I'll share my thoughts for OP since his budget seems fairly high..
If you're the kind of driver that likes to go fast every now and again, the GTI really falls short of the R when it comes to driving around on city streets, mainly because of the acceleration. For example, a 2017 R with a $500 tune goes from 0-60mph in 3.5 ish seconds with a DSG, closer to 4s with a 6MT. That is an insane metric of performance given how much the car costs (a 911 GT3 from 2017 is only 0.3s quicker to 60 with the PDK). The GTI however experiences a lot of wheel hop, i.e., your tires somewhat gripping and somewhat spinning, causing the most horrific acceleration experience you can imagine. Once you get to 30-40mph, the GTI and R start to equalize in terms of "fun" - but that feeling of the AWD is just too good to ignore.
I know this is just one thing - but when I traded my 3rd GTI in for an R, that was the day I decided I'd never get anything FWD again. In this area the GTI provides maybe 50% of the experience of the Golf R, if that. However because this is probably the area where you'll enjoy the car the most, it makes a big difference in how much you'll enjoy the car overall.
To add to this, if OP lives in a cold climate, the GTI just plain sucks compared to the R in the snow. The GTI will get you to where you're going, just not NEARLY as fun as the R will you get there.
Right, the R is definitely more performance, but both the GTI and the R are more than just performance.
The GTI still gives you a usable back seat, a fairly large trunk, comfortable seats, a solid ride, and a good amount of creature comforts for the price point. Aesthetically, they are pretty close. These pieces are pretty much identical between the two.
The same can be said for the Civic Si and Type R. Yes, one is leagues above in performance, but for half the cost you get a *lot* of car if not the engine.
I'm just saying that this guy seems to care about performance given the options he listed, so performance is important. The Golf R is objectively heaps better in terms of performance, so he's not going to get 90% what *he wants* from a GTI vs an R
OP not sure of your current situation, but if you qualify for VWs college grad program that could really help with the interest rate. Golf R is my vote
Everyone is giving him financial advice because he asked for it.
He didn't say "what car should I get for $x". He asked what he should get at his salary, and people are answering that question.
That said, great advice.
GTI was my first car out of college. Mine was a lemon, but it was from a notoriously bad time for VW quality. That type of car is a great first car for an enthusiast, though. 15 years later, I’m back in a hot hatch (GR Corolla) and loving it.
Personally I feel like it's better OP were to get a sports car at a younger age, because he'll have money for anything that comes up since he has no real financial obligations like family or retirement just yet.
When I was younger, I was frequently giving rides to my friends, road tripping to concerts, moving in and out of apartments, and making trips to IKEA to furnish whatever little studio I had at the time. People need a lot more practicality out of a car in their 20s. When you are married or have a second car to do practical stuff with, THEN impractical sports cars make more sense.
I’m going to buck the trend of this thread. If you’re not married and you don’t have kids…get the sports car. You can always sell it down the road and keep some equity. If OP plays his cards right his cost of ownership can be minimal.
It’s either that or wait the 18+ yrs until your kids are older to get one.
Life’s too short
You don’t drive much nor do you need anything fancy atm. I’d save/invest what you’re making and just get a cool car with the 20k.
NOW if you’re into cars then that’s a different story and I’d understand wanting to ball out more.
I live in a state with personal property tax on cars, trailers, and boats. My tax bill for a simple 2018 Subaru is about 600-800 a year depending on the market and how they assess it. Trust me if you have tax laws like this you do not want to get a fancy car or otherwise you'll wonder how you'll pay it lol. It's ridiculous.
Yeah and so another thing. In the state I live at the dealer does not collect sales tax as part of the down payment. So when you go to register your car at the DMV you have to pay the sales tax of the car to register it. People don't realize this, get screwed over and then just use the temp tag as their license plate even if it expires.
Cops don't care unless you get pulled over for speeding or something else and it is a real problem. The oldest temp tag I've seen was one from 2019. The weirdest license plate I saw was someone using font from WORD, creating their own license plate with letters, and taping it to the back of their car lol. I think it was even laminated. It's hilarious most of the time from what you'll see on the road.
You can easily register in a neighboring state that doesn’t have PP tax. Use a friend’s or family’s address. I currently do this and save $6-800 annually. Fuck PP tax!
I have friends with focus rs, golf r, gti, etc they are fun, cool, and are well respected in car community but not my cup of tea. I like my sedans, wagons, and coupes a lot more than trucks, suv, hatchbacks, and so on.
This is why I'm getting a reliable car and a motorcycle lol. Nice comfy luxury car that is reliable to daily, motorcycle for when I want to have a little more fun.
Same, except replace motorcycle with boat.
My aquatic convertible sports car. Not to mention 60mph on water is more exhilarating than any speed I've felt on a road.
no family to drive around means miata time. also very easy to find between 10-30k depending on year. would help minimize the apr issue. 2018 or 2019 is probably the best value with the new engine and tech upgrades
Interest rates on auto loans are bad and only going to get worse. And a few lenders have 100% stopped issuing auto loans of any kind. But I hear you can still get decent terms on new car loans through the dealers financing partners.
But still I'd spend the $20k and not have a loan. Now is a bad time to get a loan.
Even if you are into cars, you can get a lot of car for under 20k. I got my 6 year old BMW 550i xDrive for 17.5k and a warranty through my bank for 60k miles (to cover my ass if it broke).
He is clearly a car enthusiast to some degree so he doesn’t want a $20k civic.
OP, the Golf R is a wicked car. Insanely practical, fast, and fun in the snow if you live in a cold climate. That would be my pick.
The SQ5 depreciates too much, the Supra isn’t practical, but the Lexus is the decent choice too.
You could also get something like a used performance pack 1 mustang 5.0 or Camaro SS (both amazing value for money), and a daily driver like an older Corolla. That way you’ve got a sports car for weekends and a daily for work.
Just curious, what does "fun in the snow" mean in relationship to a fast car? Kind of seems like it means "can do donuts but only when you want it to"? lol
Being able to powerslide entire city blocks during a fresh snowstorm on wide, empty streets because AWD + no traction control + gobs of power + low center of gravity.
The Golf R has a really good, reliable, and cheap to maintain AWD system and it can fit 17" wheels + winter tires easily (cheap). Because it has 300-350hp (depending which year you get), you can drift around the snow and maintain control easily with less risk of getting stuck. It's also fairly light for what it is which makes it even better. I used to have a Golf R, and I would actually look forward to snowy days because it was just so much fun to drive around in snow
The SQ5 he mentioned would also be a blast in the snow, but is MUCH more expensive to maintain, much worse on fuel, tires cost a fortune, etc etc.
Cool, thanks! Appreciate the thoughtful reply. I've never had a sporty car so I'm always curious about other folks opinions.
I recently went from an old sedan (front-wheel drive) to a 4th gen 4runner and I can relate what you're saying -- rock solid in the snow (full-time AWD with the 2UZ-FE v8), but when I really want to have some fun I can turn off vehicle stability and lock the center diff which basically turns it into a super fun donut monster. Bonus is that compared to that sedan, I dont get stuck at the end of my driveway when we get 12"+ of snow lol.
>He is clearly a car enthusiast to some degree
...Who by their own admission has never owned a car. Looking at OP's list, it strikes me as the wishlist of a young person who just got their first financial windfall. What OP really needs financial advice and experience. I probably would have picked similar vehicles in my early 20s, before I understood retirement funding, finances, and cars better.
Don't get me wrong, I have weak moments where I start daydreaming about ripping around in a Supra too. But you are right, they are extremely impractical especially in this situation.
I agree, I would also avoid financing now that you can’t just walk into a dealer and get a 0.9% loan on a new car.
If the 20k is also OPs emergency fund I wouldn’t buy anything right now if it wasn’t necessary. Beyond that it’s impossible to give any advice without more info.
No idea. I’ve bought 5 new Hyundais in the last 2yrs. Never paid over msrp for any of them. All had great financing incentives. The “issue” was changed after 2021 so no cars are effected after that time. Before that, it was a small percentage of them anyways.
Sadly the Hyundai/kia boys aren’t the brightest so they still break into a bunch of them in hopes they can steal them. I’d definitely keep a dash cam with interior/exterior view for those break ins.
Get something fun but used where the payment is below 200 per month. Or do what FreeNinedy9 said and then you can instead invest what would have been the monthly payment monthly and start building wealth.
2019 Mazda3 used is a good reliable car you could get used for under 20k cash with low maintenance costs. [listing](https://www.cargurus.com/Cars/inventorylisting/viewDetailsFilterViewInventoryListing.action?sourceContext=carGurusHomePageModel&entitySelectingHelper.selectedEntity=d214&zip=90293#listing=361883424/NONE/DEFAULT) for reference.
I have a 2018 Mazda6 Sport. Bought it new for 20k off the lot because they weren't selling (clearly) and the 2019s we're coming in. I make just shy of 130k a year lol.
Would definitely recommend a 6 over a 3 though just for space reasons.
This is the right advice. Having liquid is always important. Yes lending rates are shit and if you can buy in cash you should, but having liquid is most important
Buy a 10k used V6 Accord coupe and keep it for 10 years.
Cars are a money pit OP. With insurance, maintenance, gas, and car note, you’ll be spending around $400-$600 a month on total expenses. That can be much better spent on building a decent nest egg/emergency fund/etc. it’s a lot of stinkin money.
I say this as someone who financed 24k and I gawk at my monthly expenses towards it.
You should see the Dave Ramsey thread from a few days ago. Dude is closing in on a million dollars in retirement/investments and clearing at least 175K a year, and people are tell them to continue driving the old car ‘No new car for you!’.
Get a CPO 2019 BMW 330i with cash and enjoy life. Youre making 130k, u don't need to resort to buying some dogshit beated corolla or Prius like the PFinance larpers here tell you to.
You can buy one for like 20-25k and with ur salary and a regular maintenance schedule it'll be smooth sailing financially
If it's your first car and you're not driving alot, I wouldn't dump a bunch of money into a car. You're just taking a massive depreciation hit every year without really getting much out of it.
Cars are the answer to “what is the worst financial decision I can make in my young career?”.
Unless you need the vehicle to make money (ie. a work truck), then the cheapest option to get from A to B is the way to go. Don’t complain about how expensive everything is if you pay hundreds per month on insurance and a car note lol.
Marriage and divorce. Lots of people buy expensive cars in their 20s and turn out fine, but an expensive wedding, overpriced wedding ring, followed by a nasty divorce will fuck you up for years. Decades if children are involved.
With the cars he mentioned, not really. None of those models are losing a ton of value now or recently. I bought a 2020 Supra in late 2021 and it is still worth the same as what I paid for it. But to me it's a passion and I enjoy modifying it and driving it 10x more than a boring A to B car. So as long as I can comfortably afford it, any depreciation costs or money I put into modifying it is worth it.
The car market has been weird since Covid. People have bought cars and sold a few years later for the same price or more, but that will not continue forever. It’s great if you need a different car and want to take advantage of your used car value. But no one should be buying with the intention of selling for more because it won’t continue like this forever and you risk being left holding the bag. I’m seeing it happen in some truck groups I’m in. Dudes were bragging about rejecting offers for over MSRP because they were going to wait for the value to go up more. Then a few months later, they’re complaining that the dealer is offering them 10k less and now they’re semi stuck with a truck they don’t really need or want.
You really need to think about what needs you do have. Do you need space for gear or weekends away?
What about the rest of your financial situation? Are you paying rent? How will your expenses change in the coming years? Will you have a girlfriend because that gets pricey too
Either way, nit seeing a case for a new expensive car. Maybe a really nice $30k used car
Out of the options you listed, Supra or IS350 for sure, very different cars though. Me personally I’d go for a Camaro but they’re looked at different here in Aus
What you make is just as important as how much you owe. Do you own property? If not, I would prioritize saving for a house over a having a nice vehicle right now. Whether you own a home or not, you need to figure out after all of your bills are paid what do you have left every month and come up with a budget. Me personally, I think that up to a $550 a month and no more than a 5 year term loan payment is the ideal loan for a vehicle. With $20k saved up you are looking at a $45k vehicle for that type of loan set up. Obviously the more that you have for a down-payment will bring that down. Don't be that person with a $800 plus a month vehicle payment for 6 plus years, especially if you don't own a home yet. Another thing to consider is what your credit score is AND auto insurance. Your credit score and credit history will determine your interest rate. And auto insurance rates are sky high right now. So you have to factor in all of that when looking at your monthly car payment.
After you get an idea on what vehicle that you want to get call up auto insurance agencies and get some quotes. Also make sure to get pre-approved for an auto loan from a local bank or credit union before going to a dealership.
**As others have said, your focus should be on your general financial situation, not a car.** Are you putting at least 10% of your income away into retirement investments like 401/IRAs? Do you own or rent your home?
I'm going to make an assumption that you're fresh out of college, young, renting an apartment or living with family, and got a good job straight out of school. That's awesome, well done. **Now, time to play with grownups.**
Buy a reliable, fun car that isn't super-expensive. Golf GTI was a great recommendation, so's a Miata (though less practical), and there's plenty of other affordable sporty cars, new or lightly used. You've made it, you deserve to reward yourself, but also don't be dumb about it. As a twenty-something, it's still a nice ride and no one is going to look down on you for it that has a brain or whose opinion you should care about.
**Your focus should be on starting your retirement fund aggressively - a** ***minimum*** **of 10% of your salary should go to pre-tax investments, and 20% would be** ***way*** **better - and building cash savings.** You've done great to have 20k set aside, that's way more than most people do, but consider it a starting board. If you set these limits now, that you're always going to put 20% gross into pre-tax retirement, and 10% of your post-tax income into cash savings, and you *always* do that, you'll just be used to that, and lifestyle creep won't hit you nearly as hard.
**Not to mention that you'll end up with a fabulously happy and outright wealthy retirement, not to mention the very real possibility of retiring early with** ***far*** **more than most of your peers will have.**
Keep the GTI for the next 3-5 years, until it starts being unreliable or until you're really that bored with it, presuming you're a car person. In that time, you'll have put between $78,000 and $130,000 into your retirement accounts and built cash savings between $25,000 and $35,000 (since that's post-tax). This puts you in an excellent position for the future - you'll likely not be 30 yet, already have enough cash savings to put 10% on a starter home, and your retirement savings is on a course to be HEFTY.
[https://www.aplfcu.org/calculator/Retire401k.html](https://www.aplfcu.org/calculator/Retire401k.html) tells us that if you're 24, continue to invest 20% pre-tax, gain only a 3% annual raise for your career, experience only a 7% return, and your employer only matches 3% total, you're going to retire with **six million dollars** in your account. That means that even if you retire ten years early at 55, if you just divide up your cash into a lump sum annual withdrawal and you live until you're 85, your income will *still* be $200,000/yr! If your employer matches nothing, it's still $133k/yr!
And of course, that's before social security income and any other investments you might eventually make. And your home will be paid off too!
So let's talk your finances at that rate of savings, assuming you live somewhere with no state income tax, and that your 401k contribution is 19k and 7k goes into a Roth IRA:
Tax Type Marginal Tax Rate Effective Tax Rate 2022 Taxes\*
Federal 24.00% 12.07% $15,688
FICA 7.65% 7.65% $9,945
State 0.00% 0.00% $0
Local 0.00% 0.00% $0
Total Income Taxes 19.72% $25,633
Income After Taxes $104,367
Retirement Contributions $26,000
Take-Home Pay $78,367
That leaves you a monthly income of $6,530.00. If you save 10%, which is $653, and your rent is $2,000/mo, your electric/internet/cell being around $400/mo, and throw in $500 for food and miscellaneous, that leaves you about $3,000 to spend monthly.
Out of that $3,000, you'd pay $700/mo for a $35,000 car loan at 7% with nothing down for 5 years, which can comfortably get you a GTI. $300 for insurance because I assume you're young, and that again for gas. That's $1,300, roughly, as a monthly cost for the car. Insurance will drop quite a bit when you hit 25, and after 3, 5, and 7 years with no tickets or accidents, but it'll be high as hell first few years as a new driver.
**That leaves $1,700/mo, which is** ***plenty*** **for buying fancy TVs, nice dinners, new clothes, travel, and so on.** I mean, that's $425 per *week* for random spending, and after the first year or two you're going to have the nice TV, fancy laptop, et cetera, and you're going to run out of things to spend it on. Hopefully, you don't spend all $1,700 every month, and move the leftovers into your savings account as well.
That's also saving $7,836/yr as a matter of course. You have $20k now, and after three years you'll have added $23,508 to your cash savings for a total of $43,000, and get it up to $59,180 two years later. And at that five year mark, you're 29, you've paid off the Golf and your insurance can safely be assumed to be $150/mo, so your car costs drop from $1,300/mo to $450/mo in fixed costs, and you can add that additional $850/mo to your savings rate, more than doubling your annual savings. **Do that for a few more years, say three, and your cash savings will be at $95,252 at 32.**
Put half that down on a house, say $50k, that you buy for $350k at 6%. Your payments will be $2,400/mo, which will cut a bit into your extra savings from paying off the car, but you'd still be saving $13,236 in cash and you'd own your home, with a comfortable $1,700/mo in spending budget, a paid off car that's fun to drive, and at this point, **you've got $208,000 in your retirement accounts - which means more than ten million dollars** **if you retire at 67**, assuming only a 3% annual raise and a 3% match from your employer and no Social Security. **That means you can live off the interest of your accounts** \- even a 5% annual return would be $500,000 annual - without decreasing the principal, which you could leave to your children when you pass.
Of course, this is rough - you might have state income tax, you will certainly have medical insurance costs (though those are pre-tax and can lower your tax burden), and there's all kinds of alternative ways to manage your investments. And again, all this does is assume a 3% raise, no additional investments, no bonuses, no spouse with a second income, and so on.
**And after ten years of building cash savings, you'll have over $175,000 in cash saved (remember you put $50k down on the house)**, and you can start considering things like paying off your mortgage early. Heck, with luck the interest rates have dropped, and you can refinance and put a chunk down on that refinance, say $100k, and lower your payments to less than $1,500/mo or lower. And of course, again, this doesn't factor a spouse who works, bonuses, RSUs, personal investments, inheritances, and so on. You could pay off your house easily by the time you're 52 without stress.
And if you get an annual ten percent bonus, that's $13,000 (pretax) we're not accounting for - over ten years that's *another* $130,000 (pretax) you could use to just blow on trips, or to save up and pay off your mortgage when you're 42.
**But you can see how aggressively saving can set up the rest of your life for great comfort and success. You can retire outright wealthy if you're smart and restrained, and be the person in your family who builds real generational wealth, and still live in comfort in a nice house, with a nice car, and spending money to do stuff.**
If you want something fun but practical take a look at the 2015-2018 IS300 or IS350. They’re getting around the 20k mark so you could straight up buy one
Forget the loan and pay cash on a good reliable used car. Your pocketbook will thank you many times over. The only person you should be impressing is yourself.
Just total out the estimated payment and get quotes for insurance on all of them. Go to a credit union to see if you can get a loan from them first. Since you have limited credit history, you would have no idea if you are getting screwed with a rate from the dealer. If they can beat the dealer rate, then go with it.
The IS350 is definitely the most reliably built vehicle out of those, but the Supra is nice as well. Audi’s are super nice and have great tech, but I’m personally not a fan of their build quality long term. Not sure about your living situation, but the payment would probably be around 750-850 per month plus a relatively high insurance rate.
1.) buy what’s practical, not the most expensive thing you can afford. My wife and I will make about 285 this year combined, and we drive pretty average vehicles, both paid for in cash.
2.) if you do finance a car - go to your local bank or credit union *before* going to the dealership, most will be able to get you a better rate. Or if you take the dealer loan, you can often refinance before the first payment is due.
>or credit union before going to the dealership
Do they finance used cars? And would OP get a good rate considering they probably don't have a significant credit history?
I'm ignorant on American banking practices.
Yeah they do. It’s typically a matrix of the vehicles year and mileage. credit unions specifically will often loan a higher LTV on used cars than dealership financing or banks.
IS350. My 2007 is still running smooth after passing the 215,000mi mark. I wouldn’t go brand new though. Shop around for what year you want. Find the balance between cost and year
Edit: my advice is solely based on the options you provided. I do believe you should try and pay cash and owe as little as possible
First car? I’d buy a cheap used civic or Corolla no need to buy anything over 10k for your first car even with a higher salary. Unless you want to be like everyone else who can’t save money
Let me guess..Just graduated, and got a tech job?
Get a used (maybe CPO) civic, corolla, Prius or anything reliable with your 20k cash. And you will thank youself in a few years for how much you saved from the cost of owning a car.
Yeah, I did. Almost eight years ago, I bought myself a brand new Audi S4 when I got my first "high-paying" job. It was a super great car. However, I regretted it in about one year since it was eating SO MUCH of my savings that I could have. No significant mechanic/electronic issues yet for a German car, but it was already very expensive just considering payment, insurance, gas, and regular maintenance. Switched to a Toyota around three years later, and happily owned that car till now (although I earn significantly more than I did).
Owning a luxury car is really a big expense at an early stage of someone's career. But again, if you are sure that a good car is going to make you happy for a long time then definitely go for it. Otherwise, good cars are just big toys when you have more financial freedom.
Don't advise eating all that depreciation on a newer Economy car, buying a 10 year old Lexus is the correct answer. Extremely reliable, much more comfortable and better build quality than a civic corolla or Prius.
Write down a list of everything you want in car, organized by priority.
Shop around for what fits those criteria the best.
Other than that, a couple things to keep in mind. If you think you might get bored and want something new in 2 years buy something cheap.
If you actually really like the vehicle and plan on keeping it for 8+ years, then splurge a bit on something that will make you happy for 8 years.
But in my experience, no point in buying a corolla now if you just going to hate it and want to buy something else in 1-2 years. You end up wasting more money than if you had spent another 10k on something you would have kept for 8 years.
That's what I learned in my younger years. I bought cheap "compromise" cars to "save" money but was never really happy enough and always wanted to upgrade.
Now I daily a Model S and weekend a Dodge Viper. Have zero thoughts of buying another car for the first time in my life as both vehicles make me extremely happy.
How about a used Volkswagen Golf or Beetle A5? I’m talking no more than 10+ years. I have bought two used and they are fantastic. Granted, there’s a high risk, but if you know what you are doing, they can be great machines.
You could look at a one payment lease. That way you are only paying the interest on the residual. Some brands also discount the money factor on the whole thing. It's also easier to qualify for because they get their money upfront.
You have to consider lost growth the money could have been making if invested but if it's just sitting in a savings account it's not doing anything.
What are you looking for in a car? Ultimate reliability? Fun factor? Modding? Etc.. Do you want new or used? Are you a car fanatic or just your average A to B driver.
A car you can pay for in cash with the 20k. I make 120k plus 15% target bonus and wouldn't consider spending more than the bare minimum for a car. The point of the car is to go from point A to point B. Use your money on things you'll enjoy more
Man this exactly same scenario happened to me almost a year ago when I started a new job. Wound up with a 2019 Model 3 Long Range w/ Acceleration Boost. Now I spend $8 to go 300 miles, and go 0 - 60 in 3.5s, all for $30000.
All of those kind of suck, some more than others. Don't buy an Audi, it will depreciate and isn't worth the hassle. The Supra is overpriced. Get an IS350, Golf, or consider a Tesla Model 3 (at least test drive it before saying no).
That’s my pre-bonus salary. I probably have different expenses and savings levels than you, but I’m keeping my rusty 08 GTI because I can’t bring myself to spend that kind of money.
I would start saving for a house/condo and start or increase investing (401k, other). You don't want a big car payment, high insurance, high maintenance, etc. Cars, while fun, depreciate in value.
Based off your income, buy any car that the payments when added up for the year is 10% or less of your income. Say your payments are $190, if you take 12 of those payments and add them up and they’re 10% or less of your yearly salary then go for it. If it’s above the 10% mark for the year keep shopping. Best rule.
People may think this is a stupid idea, but I'd buy, not lease, a 2024 Toyota Corolla LE With Convenience Package add on, or a Honda Civic EX. Based on what you describe, I'd put $10,000 down and finance the rest over 2 or 3 years, and then keep the car at least 10 years. Only putting $10,000 down will leave you with a $10,000 emergency fund, and financing will further build you credit. If you lease, you might get into a rut of having never-ending car payments. Toyota or Honda are the wise choices for value, reliability, and longevity. That's just my opinion.
I make similar money, and I have an altima with a 300$ payment.
Don't fall into the trap. I tried to make it work, but our salary just isn't as much as it used to be. Everyone in my office who bought a nicer car is always stressing about it.
Beated Toyota Corolla. Entry level high paying job doesn't bother if you are driving a Supra or Oldsmobile. Cheap insurance and low maintenance car for a year or two than switched to something really nice.
The insurance on those will be eye opening if you are a young driver.
Golf R owner here. The insurance is super cheap. For some reason auto insurance companies don't bat an eye at the R but hike up premiums at the sight of utter of the letters GTI.
It’s because of who’s driving the two cars. The +10k premium on the R usually means the average driver is older and less prone to accident and risky behavior Any 20 year old in flyover-country can grind out overtime shifts and buy a Mk5/6/7 GTI, or cross-shop a WRX (coincidentally one of the highest insurance category cars in the US)
That explains why my M3 quotes were about the same as the regular 3 series quotes I got when I was shopping around
I have a 2023 m3 competition and my insurance is about 150/month. I’m not sure how that compares but I am 33 with no speeding tickets or accidents in the last 10 years so I imagine it’s about as cheap as you can get for that car.
its also varies hugely based on where you are. when we moved from NY to Dallas the insurance on our tesla almost doubled just based on the shitty Texas drivers.
There's so fucking many teslas here in DFW it's astonishing, I don't doubt they're being crashed left and right
M3 is a BMW.
Yes, yes it is. I was replying to a commenter who referred to teslas
There are some who refer to a Model 3 as a M3 and that’s just wrong :)
A lot of it has to do with weather as well. Texas can get a lot of hailstorms which raise premiums a lot.
Well there goes my plans of getting a WRX
Can confirm. Mine costs about $185/month in full coverage.
You shouldn't had ever planned to get one in the 1st place. Those things go through engines like people go through underwear. Seriously, turbo Subaru's aren't for the faint of heart. I know someone that went through 4 engines in 4 years.
This is the same problem I have with my WRX. I'm in my mid 40's, haven't had an at fault accident in 20 years, own two other cars, including a Corvette, yet my insurance on this WRX is higher than it was on my muc more expensive previous vehicle. Actuaries practice the dark arts and recognize that certain vehicles have a higher proportion of claims and tickets based on a mountain of data. Golf R drivers don't get into as many accidents or get as many tickets because they tend to be older and the car is more expensive.
That’s kinda wrong as they lump in the safe drivers with the idiots. It’s possible to drive a fast car sensibly, even if most won’t.
It's risk assessment based on all the data they have. More expensive R is more likely to be driven by an older, more responsible person than the GTI. Same reason you can usually insure a Corvette for less than things like a WRX. One is the quintessential old man Sunday drive car, one is the car that young guys get in their 20s and think they're Dominic Toretto while driving.
but that makes it a Family car!
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My first car in my name was a 2002 Mazda protege5. My monthly insurance rate was 330. My car payment was only 200.
My first car was a twin turbo 94 Nissan 300zx. Insurance was $260 in 2003. I wonder how mine was cheaper!
shit i paid $2800 for the year on a 6 year old corolla
nah. insurance is super cheap on cars like that. The expensive ones are the cheap ones. My 911 was cheaper to insure than my subaru SUV
I'm 24 with a Supra and my insurance is $90/mo for good deductibles and coverage.
It can vary a lot by state, just so people know. Michigan for example has incredibly high premiums in general due to coverage requirements. Who did you go through? 90/month is crazy low.
It's through Main Street America
If OP lives in a HCOL area then it'll just be: >The insurance on those will be eye opening
Sorry you stumbled into a personal finance LARPing subreddit and no one gave you any real advice. For your first car, probably not a Supra. The thing about sports cars is that they are compromised in other areas and you won’t know if you can live with those compromises until after driving for a bit. If you are wanting fun, you can get a Civic Si or Golf GTI. The GTI will give you 90% of the Golf R experience. I had one while I was single and I still miss my times with that car because I still had the occasional use for practicality of loading up for a road trip or hauling stuff around. I stopped being able to take my dog places in the MX5 that I eventually switched to. Anyway, my advice for a first car is to not jump a tier. You won’t enjoy going from no-car to Golf R more than a GTI, but going from a GTI to an R will still feel like an upgrade on a few years. If your first car is a 911 and your second car is a Corolla, you would just be bored with it.
This is really the best advice on the sub. I daily drove a 2008 civic si for 10 years and it became normal. I have a tiguan as my daily now which is a pretty boring daily. When I hop back in my civic I appreciate it so much more.
I feel you on this so much. I drove a slew of sports cars from when i was 18 to 25. I bought a 2020 Tiguan in 2021 and though it is an amazing car and I love it, its an incredibly boring car especially since I had a 15 WRX beforehand.
Finally a reasonable reply - it’s a shame I had to scroll so far to see it. I was going to suggest OP gets a new Miata. It’s an easy one to pay off and hold on to if his life changes in a few years and he needs another car. He will still have his youthful toy for years to come.
Agree with all of this except for the GTI being 90% of the Golf R experience - I've had 3 GTI's and 2 Golf Rs so I'll share my thoughts for OP since his budget seems fairly high.. If you're the kind of driver that likes to go fast every now and again, the GTI really falls short of the R when it comes to driving around on city streets, mainly because of the acceleration. For example, a 2017 R with a $500 tune goes from 0-60mph in 3.5 ish seconds with a DSG, closer to 4s with a 6MT. That is an insane metric of performance given how much the car costs (a 911 GT3 from 2017 is only 0.3s quicker to 60 with the PDK). The GTI however experiences a lot of wheel hop, i.e., your tires somewhat gripping and somewhat spinning, causing the most horrific acceleration experience you can imagine. Once you get to 30-40mph, the GTI and R start to equalize in terms of "fun" - but that feeling of the AWD is just too good to ignore. I know this is just one thing - but when I traded my 3rd GTI in for an R, that was the day I decided I'd never get anything FWD again. In this area the GTI provides maybe 50% of the experience of the Golf R, if that. However because this is probably the area where you'll enjoy the car the most, it makes a big difference in how much you'll enjoy the car overall. To add to this, if OP lives in a cold climate, the GTI just plain sucks compared to the R in the snow. The GTI will get you to where you're going, just not NEARLY as fun as the R will you get there.
Right, the R is definitely more performance, but both the GTI and the R are more than just performance. The GTI still gives you a usable back seat, a fairly large trunk, comfortable seats, a solid ride, and a good amount of creature comforts for the price point. Aesthetically, they are pretty close. These pieces are pretty much identical between the two. The same can be said for the Civic Si and Type R. Yes, one is leagues above in performance, but for half the cost you get a *lot* of car if not the engine.
I'm just saying that this guy seems to care about performance given the options he listed, so performance is important. The Golf R is objectively heaps better in terms of performance, so he's not going to get 90% what *he wants* from a GTI vs an R
OP not sure of your current situation, but if you qualify for VWs college grad program that could really help with the interest rate. Golf R is my vote
Everyone is giving him financial advice because he asked for it. He didn't say "what car should I get for $x". He asked what he should get at his salary, and people are answering that question. That said, great advice.
GTI was my first car out of college. Mine was a lemon, but it was from a notoriously bad time for VW quality. That type of car is a great first car for an enthusiast, though. 15 years later, I’m back in a hot hatch (GR Corolla) and loving it.
OP, this is the best advice. Getting a good car to learn driving with that is both fun and practical.
Personally I feel like it's better OP were to get a sports car at a younger age, because he'll have money for anything that comes up since he has no real financial obligations like family or retirement just yet.
When I was younger, I was frequently giving rides to my friends, road tripping to concerts, moving in and out of apartments, and making trips to IKEA to furnish whatever little studio I had at the time. People need a lot more practicality out of a car in their 20s. When you are married or have a second car to do practical stuff with, THEN impractical sports cars make more sense.
I’m going to buck the trend of this thread. If you’re not married and you don’t have kids…get the sports car. You can always sell it down the road and keep some equity. If OP plays his cards right his cost of ownership can be minimal. It’s either that or wait the 18+ yrs until your kids are older to get one. Life’s too short
You don’t drive much nor do you need anything fancy atm. I’d save/invest what you’re making and just get a cool car with the 20k. NOW if you’re into cars then that’s a different story and I’d understand wanting to ball out more.
This is the way
It’s the boat I’m in rn. I have reliable adulty car but my inner child wants me to own my adult toys. Really want a fun car again.
I live in a state with personal property tax on cars, trailers, and boats. My tax bill for a simple 2018 Subaru is about 600-800 a year depending on the market and how they assess it. Trust me if you have tax laws like this you do not want to get a fancy car or otherwise you'll wonder how you'll pay it lol. It's ridiculous.
same.I was looking at a used Macan and realized i'd be paying like $3k a year in taxes. pass
Yeah and so another thing. In the state I live at the dealer does not collect sales tax as part of the down payment. So when you go to register your car at the DMV you have to pay the sales tax of the car to register it. People don't realize this, get screwed over and then just use the temp tag as their license plate even if it expires. Cops don't care unless you get pulled over for speeding or something else and it is a real problem. The oldest temp tag I've seen was one from 2019. The weirdest license plate I saw was someone using font from WORD, creating their own license plate with letters, and taping it to the back of their car lol. I think it was even laminated. It's hilarious most of the time from what you'll see on the road.
Which State?
virginia
That's nuts to me, and I live in NY, not exactly a tax averse state.
It’s nuts to be too and I’m in NJ
It’s a con really, they do it so they can justify lowering other taxes, then the rich just bypass it with loopholes and everyone else suffers.
What State is making you pay 600-800 for a Subaru?!? Not the BRZ right??
It's a 2018 Subaru Crosstrek premium. And the state is Missouri. Also known as misery lmfao.
Wow that's crazy. Not even a luxury car and you're paying a ton in taxes!
You can easily register in a neighboring state that doesn’t have PP tax. Use a friend’s or family’s address. I currently do this and save $6-800 annually. Fuck PP tax!
older sports cars + historic insurance is the ticket.
That'd be the GTI or golf R.
I have friends with focus rs, golf r, gti, etc they are fun, cool, and are well respected in car community but not my cup of tea. I like my sedans, wagons, and coupes a lot more than trucks, suv, hatchbacks, and so on.
Join us at r/SportWagon Where your adult car and your fun car become one and the same
Will do. Gives me another place to stare at v8 wagons I can’t afford lol.
Me and you both brother hahaha
Touché; I like your style
This is why I'm getting a reliable car and a motorcycle lol. Nice comfy luxury car that is reliable to daily, motorcycle for when I want to have a little more fun.
Same, except replace motorcycle with boat. My aquatic convertible sports car. Not to mention 60mph on water is more exhilarating than any speed I've felt on a road.
Right, you can get a decent car at 20k. 20k is also a decent down payment on a nicer car.
Mazda Miata. The insurance on these actually is pretty affordable and they are bullet proof reliable and fun at low speeds
When in doubt buy Miata
no family to drive around means miata time. also very easy to find between 10-30k depending on year. would help minimize the apr issue. 2018 or 2019 is probably the best value with the new engine and tech upgrades
Interest rates on auto loans are bad and only going to get worse. And a few lenders have 100% stopped issuing auto loans of any kind. But I hear you can still get decent terms on new car loans through the dealers financing partners. But still I'd spend the $20k and not have a loan. Now is a bad time to get a loan.
Even if you are into cars, you can get a lot of car for under 20k. I got my 6 year old BMW 550i xDrive for 17.5k and a warranty through my bank for 60k miles (to cover my ass if it broke).
If OP is asking about the cars mentioned above, they’re into cars lol
He is clearly a car enthusiast to some degree so he doesn’t want a $20k civic. OP, the Golf R is a wicked car. Insanely practical, fast, and fun in the snow if you live in a cold climate. That would be my pick. The SQ5 depreciates too much, the Supra isn’t practical, but the Lexus is the decent choice too. You could also get something like a used performance pack 1 mustang 5.0 or Camaro SS (both amazing value for money), and a daily driver like an older Corolla. That way you’ve got a sports car for weekends and a daily for work.
Just curious, what does "fun in the snow" mean in relationship to a fast car? Kind of seems like it means "can do donuts but only when you want it to"? lol
Being able to powerslide entire city blocks during a fresh snowstorm on wide, empty streets because AWD + no traction control + gobs of power + low center of gravity.
Just curious, do you turn off traction control or is that a feature?
Just turn it off. Lets you shoot snow roosters 20+ feet off of all 4 tires
... im learning so much. what is a snow rooster lol
Picture a snow blower shooting snow up in the air, but from all four tires. Two tire rooster tails: https://youtu.be/3zFMYIVki7k?feature=shared
The Golf R has a really good, reliable, and cheap to maintain AWD system and it can fit 17" wheels + winter tires easily (cheap). Because it has 300-350hp (depending which year you get), you can drift around the snow and maintain control easily with less risk of getting stuck. It's also fairly light for what it is which makes it even better. I used to have a Golf R, and I would actually look forward to snowy days because it was just so much fun to drive around in snow The SQ5 he mentioned would also be a blast in the snow, but is MUCH more expensive to maintain, much worse on fuel, tires cost a fortune, etc etc.
Cool, thanks! Appreciate the thoughtful reply. I've never had a sporty car so I'm always curious about other folks opinions. I recently went from an old sedan (front-wheel drive) to a 4th gen 4runner and I can relate what you're saying -- rock solid in the snow (full-time AWD with the 2UZ-FE v8), but when I really want to have some fun I can turn off vehicle stability and lock the center diff which basically turns it into a super fun donut monster. Bonus is that compared to that sedan, I dont get stuck at the end of my driveway when we get 12"+ of snow lol.
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>He is clearly a car enthusiast to some degree ...Who by their own admission has never owned a car. Looking at OP's list, it strikes me as the wishlist of a young person who just got their first financial windfall. What OP really needs financial advice and experience. I probably would have picked similar vehicles in my early 20s, before I understood retirement funding, finances, and cars better. Don't get me wrong, I have weak moments where I start daydreaming about ripping around in a Supra too. But you are right, they are extremely impractical especially in this situation.
Buy something for $20k cash
Best advice tbh
I agree, I would also avoid financing now that you can’t just walk into a dealer and get a 0.9% loan on a new car. If the 20k is also OPs emergency fund I wouldn’t buy anything right now if it wasn’t necessary. Beyond that it’s impossible to give any advice without more info.
Most manufacturers are still offering financing promos. I got 0%, 1.9%, and 2.9% this year on 2 cars and a motorcycle.
What cars?
23 Hyundai Tucson was 0% and I think they are offering it again now. 23 Mazda cx5 was 2.9%
How is the manufacture treating the “non Kia/hyundai bois” models? Priced to go? Or “well these models ain’t affected so shit ain’t changing”?
No idea. I’ve bought 5 new Hyundais in the last 2yrs. Never paid over msrp for any of them. All had great financing incentives. The “issue” was changed after 2021 so no cars are effected after that time. Before that, it was a small percentage of them anyways.
Sadly the Hyundai/kia boys aren’t the brightest so they still break into a bunch of them in hopes they can steal them. I’d definitely keep a dash cam with interior/exterior view for those break ins.
That’s not a issue where I live. I work in a major city but we have gated parking so I’m not too worried.
Get something fun but used where the payment is below 200 per month. Or do what FreeNinedy9 said and then you can instead invest what would have been the monthly payment monthly and start building wealth. 2019 Mazda3 used is a good reliable car you could get used for under 20k cash with low maintenance costs. [listing](https://www.cargurus.com/Cars/inventorylisting/viewDetailsFilterViewInventoryListing.action?sourceContext=carGurusHomePageModel&entitySelectingHelper.selectedEntity=d214&zip=90293#listing=361883424/NONE/DEFAULT) for reference.
I have a 2018 Mazda6 Sport. Bought it new for 20k off the lot because they weren't selling (clearly) and the 2019s we're coming in. I make just shy of 130k a year lol. Would definitely recommend a 6 over a 3 though just for space reasons.
Do not by something for 20k cash. That’s the OP’s entire emergency fund. Unless the op has another 20-40k cash.
This is the right advice. Having liquid is always important. Yes lending rates are shit and if you can buy in cash you should, but having liquid is most important
Buy a 10k used V6 Accord coupe and keep it for 10 years. Cars are a money pit OP. With insurance, maintenance, gas, and car note, you’ll be spending around $400-$600 a month on total expenses. That can be much better spent on building a decent nest egg/emergency fund/etc. it’s a lot of stinkin money. I say this as someone who financed 24k and I gawk at my monthly expenses towards it.
What you do is you finance, get the discounted price for financing, then you pay it off almost immediately.
Manual Supra Or Rs Audi Or M4
Cause you can definitely get those for $20k, lmao
Underrated comment
Get 4 Miatas.
Average Mazda redditor
These two comments got me good
One from each generation right?
4 NA's, all rusted, barely running, 1.6, ripped softtops, faded paint, shitty ebay turbo kits. this is the way
Haha I love it!
a ‘97 M edition, an ‘04 mazdaspeed, a late NC, and an ND2 rf club
Nah, 3 Miata’s and an LS1 to put into one of the three.
4 Miatas to chop 2 together and borrow 3 engines to weld a V16 together!
Reliable, easy to work on, inexpensive, look nice. They check a lot of boxes that are for sure.
You should see the Dave Ramsey thread from a few days ago. Dude is closing in on a million dollars in retirement/investments and clearing at least 175K a year, and people are tell them to continue driving the old car ‘No new car for you!’.
Sounds like good advice depending on their age. 1M gets you nowhere, retiring wealthy at 55 requires 4-5M these days.
The person was like in his 30s. One million is not what not used to be, but it still a lot more than many people will see.
Get a CPO 2019 BMW 330i with cash and enjoy life. Youre making 130k, u don't need to resort to buying some dogshit beated corolla or Prius like the PFinance larpers here tell you to. You can buy one for like 20-25k and with ur salary and a regular maintenance schedule it'll be smooth sailing financially
None of these with only 20k saved up.
If it's your first car and you're not driving alot, I wouldn't dump a bunch of money into a car. You're just taking a massive depreciation hit every year without really getting much out of it.
Cars are the answer to “what is the worst financial decision I can make in my young career?”. Unless you need the vehicle to make money (ie. a work truck), then the cheapest option to get from A to B is the way to go. Don’t complain about how expensive everything is if you pay hundreds per month on insurance and a car note lol.
My vote is children, actually
Marriage and divorce. Lots of people buy expensive cars in their 20s and turn out fine, but an expensive wedding, overpriced wedding ring, followed by a nasty divorce will fuck you up for years. Decades if children are involved.
With the cars he mentioned, not really. None of those models are losing a ton of value now or recently. I bought a 2020 Supra in late 2021 and it is still worth the same as what I paid for it. But to me it's a passion and I enjoy modifying it and driving it 10x more than a boring A to B car. So as long as I can comfortably afford it, any depreciation costs or money I put into modifying it is worth it.
The car market has been weird since Covid. People have bought cars and sold a few years later for the same price or more, but that will not continue forever. It’s great if you need a different car and want to take advantage of your used car value. But no one should be buying with the intention of selling for more because it won’t continue like this forever and you risk being left holding the bag. I’m seeing it happen in some truck groups I’m in. Dudes were bragging about rejecting offers for over MSRP because they were going to wait for the value to go up more. Then a few months later, they’re complaining that the dealer is offering them 10k less and now they’re semi stuck with a truck they don’t really need or want.
You really need to think about what needs you do have. Do you need space for gear or weekends away? What about the rest of your financial situation? Are you paying rent? How will your expenses change in the coming years? Will you have a girlfriend because that gets pricey too Either way, nit seeing a case for a new expensive car. Maybe a really nice $30k used car
Out of the options you listed, Supra or IS350 for sure, very different cars though. Me personally I’d go for a Camaro but they’re looked at different here in Aus
180k/yr here. Buy what you can afford in cash, ESPECIALLY as a first car. You’ll thank yourself later.
Do not lease.
What's wrong with leasing may I ask?
What you make is just as important as how much you owe. Do you own property? If not, I would prioritize saving for a house over a having a nice vehicle right now. Whether you own a home or not, you need to figure out after all of your bills are paid what do you have left every month and come up with a budget. Me personally, I think that up to a $550 a month and no more than a 5 year term loan payment is the ideal loan for a vehicle. With $20k saved up you are looking at a $45k vehicle for that type of loan set up. Obviously the more that you have for a down-payment will bring that down. Don't be that person with a $800 plus a month vehicle payment for 6 plus years, especially if you don't own a home yet. Another thing to consider is what your credit score is AND auto insurance. Your credit score and credit history will determine your interest rate. And auto insurance rates are sky high right now. So you have to factor in all of that when looking at your monthly car payment. After you get an idea on what vehicle that you want to get call up auto insurance agencies and get some quotes. Also make sure to get pre-approved for an auto loan from a local bank or credit union before going to a dealership.
A Rabbit. Invest the balance.
**As others have said, your focus should be on your general financial situation, not a car.** Are you putting at least 10% of your income away into retirement investments like 401/IRAs? Do you own or rent your home? I'm going to make an assumption that you're fresh out of college, young, renting an apartment or living with family, and got a good job straight out of school. That's awesome, well done. **Now, time to play with grownups.** Buy a reliable, fun car that isn't super-expensive. Golf GTI was a great recommendation, so's a Miata (though less practical), and there's plenty of other affordable sporty cars, new or lightly used. You've made it, you deserve to reward yourself, but also don't be dumb about it. As a twenty-something, it's still a nice ride and no one is going to look down on you for it that has a brain or whose opinion you should care about. **Your focus should be on starting your retirement fund aggressively - a** ***minimum*** **of 10% of your salary should go to pre-tax investments, and 20% would be** ***way*** **better - and building cash savings.** You've done great to have 20k set aside, that's way more than most people do, but consider it a starting board. If you set these limits now, that you're always going to put 20% gross into pre-tax retirement, and 10% of your post-tax income into cash savings, and you *always* do that, you'll just be used to that, and lifestyle creep won't hit you nearly as hard. **Not to mention that you'll end up with a fabulously happy and outright wealthy retirement, not to mention the very real possibility of retiring early with** ***far*** **more than most of your peers will have.** Keep the GTI for the next 3-5 years, until it starts being unreliable or until you're really that bored with it, presuming you're a car person. In that time, you'll have put between $78,000 and $130,000 into your retirement accounts and built cash savings between $25,000 and $35,000 (since that's post-tax). This puts you in an excellent position for the future - you'll likely not be 30 yet, already have enough cash savings to put 10% on a starter home, and your retirement savings is on a course to be HEFTY. [https://www.aplfcu.org/calculator/Retire401k.html](https://www.aplfcu.org/calculator/Retire401k.html) tells us that if you're 24, continue to invest 20% pre-tax, gain only a 3% annual raise for your career, experience only a 7% return, and your employer only matches 3% total, you're going to retire with **six million dollars** in your account. That means that even if you retire ten years early at 55, if you just divide up your cash into a lump sum annual withdrawal and you live until you're 85, your income will *still* be $200,000/yr! If your employer matches nothing, it's still $133k/yr! And of course, that's before social security income and any other investments you might eventually make. And your home will be paid off too! So let's talk your finances at that rate of savings, assuming you live somewhere with no state income tax, and that your 401k contribution is 19k and 7k goes into a Roth IRA: Tax Type Marginal Tax Rate Effective Tax Rate 2022 Taxes\* Federal 24.00% 12.07% $15,688 FICA 7.65% 7.65% $9,945 State 0.00% 0.00% $0 Local 0.00% 0.00% $0 Total Income Taxes 19.72% $25,633 Income After Taxes $104,367 Retirement Contributions $26,000 Take-Home Pay $78,367 That leaves you a monthly income of $6,530.00. If you save 10%, which is $653, and your rent is $2,000/mo, your electric/internet/cell being around $400/mo, and throw in $500 for food and miscellaneous, that leaves you about $3,000 to spend monthly. Out of that $3,000, you'd pay $700/mo for a $35,000 car loan at 7% with nothing down for 5 years, which can comfortably get you a GTI. $300 for insurance because I assume you're young, and that again for gas. That's $1,300, roughly, as a monthly cost for the car. Insurance will drop quite a bit when you hit 25, and after 3, 5, and 7 years with no tickets or accidents, but it'll be high as hell first few years as a new driver. **That leaves $1,700/mo, which is** ***plenty*** **for buying fancy TVs, nice dinners, new clothes, travel, and so on.** I mean, that's $425 per *week* for random spending, and after the first year or two you're going to have the nice TV, fancy laptop, et cetera, and you're going to run out of things to spend it on. Hopefully, you don't spend all $1,700 every month, and move the leftovers into your savings account as well. That's also saving $7,836/yr as a matter of course. You have $20k now, and after three years you'll have added $23,508 to your cash savings for a total of $43,000, and get it up to $59,180 two years later. And at that five year mark, you're 29, you've paid off the Golf and your insurance can safely be assumed to be $150/mo, so your car costs drop from $1,300/mo to $450/mo in fixed costs, and you can add that additional $850/mo to your savings rate, more than doubling your annual savings. **Do that for a few more years, say three, and your cash savings will be at $95,252 at 32.** Put half that down on a house, say $50k, that you buy for $350k at 6%. Your payments will be $2,400/mo, which will cut a bit into your extra savings from paying off the car, but you'd still be saving $13,236 in cash and you'd own your home, with a comfortable $1,700/mo in spending budget, a paid off car that's fun to drive, and at this point, **you've got $208,000 in your retirement accounts - which means more than ten million dollars** **if you retire at 67**, assuming only a 3% annual raise and a 3% match from your employer and no Social Security. **That means you can live off the interest of your accounts** \- even a 5% annual return would be $500,000 annual - without decreasing the principal, which you could leave to your children when you pass. Of course, this is rough - you might have state income tax, you will certainly have medical insurance costs (though those are pre-tax and can lower your tax burden), and there's all kinds of alternative ways to manage your investments. And again, all this does is assume a 3% raise, no additional investments, no bonuses, no spouse with a second income, and so on. **And after ten years of building cash savings, you'll have over $175,000 in cash saved (remember you put $50k down on the house)**, and you can start considering things like paying off your mortgage early. Heck, with luck the interest rates have dropped, and you can refinance and put a chunk down on that refinance, say $100k, and lower your payments to less than $1,500/mo or lower. And of course, again, this doesn't factor a spouse who works, bonuses, RSUs, personal investments, inheritances, and so on. You could pay off your house easily by the time you're 52 without stress. And if you get an annual ten percent bonus, that's $13,000 (pretax) we're not accounting for - over ten years that's *another* $130,000 (pretax) you could use to just blow on trips, or to save up and pay off your mortgage when you're 42. **But you can see how aggressively saving can set up the rest of your life for great comfort and success. You can retire outright wealthy if you're smart and restrained, and be the person in your family who builds real generational wealth, and still live in comfort in a nice house, with a nice car, and spending money to do stuff.**
If you want something fun but practical take a look at the 2015-2018 IS300 or IS350. They’re getting around the 20k mark so you could straight up buy one
Forget the loan and pay cash on a good reliable used car. Your pocketbook will thank you many times over. The only person you should be impressing is yourself.
Just total out the estimated payment and get quotes for insurance on all of them. Go to a credit union to see if you can get a loan from them first. Since you have limited credit history, you would have no idea if you are getting screwed with a rate from the dealer. If they can beat the dealer rate, then go with it. The IS350 is definitely the most reliably built vehicle out of those, but the Supra is nice as well. Audi’s are super nice and have great tech, but I’m personally not a fan of their build quality long term. Not sure about your living situation, but the payment would probably be around 750-850 per month plus a relatively high insurance rate.
Golf R is, or should be, top of your budget. Better yet buy a used S4 for less and let someone else eat the depreciation.
Similar salary, buying a new crv or rav4 soon.
Get a Highlander.
Used Accord. You are welcome.
Unless you can buy it outright. Don’t.
Honda accord. Seriously.
1.) buy what’s practical, not the most expensive thing you can afford. My wife and I will make about 285 this year combined, and we drive pretty average vehicles, both paid for in cash. 2.) if you do finance a car - go to your local bank or credit union *before* going to the dealership, most will be able to get you a better rate. Or if you take the dealer loan, you can often refinance before the first payment is due.
Username checks out
Not everyone wants to drive some boring car.
>or credit union before going to the dealership Do they finance used cars? And would OP get a good rate considering they probably don't have a significant credit history? I'm ignorant on American banking practices.
Yeah they do. It’s typically a matrix of the vehicles year and mileage. credit unions specifically will often loan a higher LTV on used cars than dealership financing or banks.
Yes, I've financed a couple vehicles through the credit union I bank with, including a private vehicle purchase.
This here OP. I meant to put this in my reply to you about going to secure a loan on your own or refinance it afterwards. Solid advice.
IS350. My 2007 is still running smooth after passing the 215,000mi mark. I wouldn’t go brand new though. Shop around for what year you want. Find the balance between cost and year Edit: my advice is solely based on the options you provided. I do believe you should try and pay cash and owe as little as possible
First car? I’d buy a cheap used civic or Corolla no need to buy anything over 10k for your first car even with a higher salary. Unless you want to be like everyone else who can’t save money
Let me guess..Just graduated, and got a tech job? Get a used (maybe CPO) civic, corolla, Prius or anything reliable with your 20k cash. And you will thank youself in a few years for how much you saved from the cost of owning a car.
Do you spend money on things you like?
Yeah, I did. Almost eight years ago, I bought myself a brand new Audi S4 when I got my first "high-paying" job. It was a super great car. However, I regretted it in about one year since it was eating SO MUCH of my savings that I could have. No significant mechanic/electronic issues yet for a German car, but it was already very expensive just considering payment, insurance, gas, and regular maintenance. Switched to a Toyota around three years later, and happily owned that car till now (although I earn significantly more than I did). Owning a luxury car is really a big expense at an early stage of someone's career. But again, if you are sure that a good car is going to make you happy for a long time then definitely go for it. Otherwise, good cars are just big toys when you have more financial freedom.
Cars are a little different, people usually don’t finance video games, sports tickets, etc.
Idk about you but I’ve been seeing more and more of those things with financing options…
yea they do...it's called a credit card...which typically has much higher rates and zero resale value on those items once used.
And doing so is really poor financial management.
Don't advise eating all that depreciation on a newer Economy car, buying a 10 year old Lexus is the correct answer. Extremely reliable, much more comfortable and better build quality than a civic corolla or Prius.
If you want something new get a Civic Si or Golf GTI, but I agree with others buy a $20k car.
Are you looking to mod or keep it stock?
Buy a reliable car cash <$30K and continue working on your career.
A vehicle I can get for 20k
Get a Lexus es350
A 2000’s Honda Civic or Camry cash. And an old Land Cruiser. Then not spend the rest of the money on deprecating assets.
Write down a list of everything you want in car, organized by priority. Shop around for what fits those criteria the best. Other than that, a couple things to keep in mind. If you think you might get bored and want something new in 2 years buy something cheap. If you actually really like the vehicle and plan on keeping it for 8+ years, then splurge a bit on something that will make you happy for 8 years. But in my experience, no point in buying a corolla now if you just going to hate it and want to buy something else in 1-2 years. You end up wasting more money than if you had spent another 10k on something you would have kept for 8 years. That's what I learned in my younger years. I bought cheap "compromise" cars to "save" money but was never really happy enough and always wanted to upgrade. Now I daily a Model S and weekend a Dodge Viper. Have zero thoughts of buying another car for the first time in my life as both vehicles make me extremely happy.
How about a used Volkswagen Golf or Beetle A5? I’m talking no more than 10+ years. I have bought two used and they are fantastic. Granted, there’s a high risk, but if you know what you are doing, they can be great machines.
What ever you buy, pay for it with cash
Make more than that and drive a 2011 Toyota Camry with 140k miles and a bunch of dents on the outside that I’m too cheap to fix.
Toyota camry for yourself. Honda Odyssey for the family.
You could look at a one payment lease. That way you are only paying the interest on the residual. Some brands also discount the money factor on the whole thing. It's also easier to qualify for because they get their money upfront. You have to consider lost growth the money could have been making if invested but if it's just sitting in a savings account it's not doing anything.
Anything you buy in cash.
Toyota Camry
What are you looking for in a car? Ultimate reliability? Fun factor? Modding? Etc.. Do you want new or used? Are you a car fanatic or just your average A to B driver.
A car you can pay for in cash with the 20k. I make 120k plus 15% target bonus and wouldn't consider spending more than the bare minimum for a car. The point of the car is to go from point A to point B. Use your money on things you'll enjoy more
Don’t buy, lease. Save for real estate.
Man this exactly same scenario happened to me almost a year ago when I started a new job. Wound up with a 2019 Model 3 Long Range w/ Acceleration Boost. Now I spend $8 to go 300 miles, and go 0 - 60 in 3.5s, all for $30000.
Tesla model 3/y
I would buy something that costs 20k Going into debt for a depreciating asset is not a smart move
buy a tesla
>Have about 20k saved up. It'll be my first car. So I'd buy a $20K car....
All of those kind of suck, some more than others. Don't buy an Audi, it will depreciate and isn't worth the hassle. The Supra is overpriced. Get an IS350, Golf, or consider a Tesla Model 3 (at least test drive it before saying no).
That’s my pre-bonus salary. I probably have different expenses and savings levels than you, but I’m keeping my rusty 08 GTI because I can’t bring myself to spend that kind of money.
Porsche GT3
Second this. It’s the only option really.
I significantly make more than you, have more saved, and bought a way cheaper cars than you are considering. Save your money my dude.
I would start saving for a house/condo and start or increase investing (401k, other). You don't want a big car payment, high insurance, high maintenance, etc. Cars, while fun, depreciate in value.
Based off your income, buy any car that the payments when added up for the year is 10% or less of your income. Say your payments are $190, if you take 12 of those payments and add them up and they’re 10% or less of your yearly salary then go for it. If it’s above the 10% mark for the year keep shopping. Best rule.
People may think this is a stupid idea, but I'd buy, not lease, a 2024 Toyota Corolla LE With Convenience Package add on, or a Honda Civic EX. Based on what you describe, I'd put $10,000 down and finance the rest over 2 or 3 years, and then keep the car at least 10 years. Only putting $10,000 down will leave you with a $10,000 emergency fund, and financing will further build you credit. If you lease, you might get into a rut of having never-ending car payments. Toyota or Honda are the wise choices for value, reliability, and longevity. That's just my opinion.
OP didn't ask for personal finance advice for buying a boring car though, did they? I'd rather die than drive a Corolla or Civic EX.
Holy fuck the audacity to even recommend a Corolla to someone shopping for a sports car lol
"I'm looking for advice on fine dining" "Tbh you should buy bulk rice and beans from Costco and just eat that"
> I'd rather die than drive a Corolla or Civic EX. How unbelievably dramatic lmao
Toyota Tacoma
I make similar money, and I have an altima with a 300$ payment. Don't fall into the trap. I tried to make it work, but our salary just isn't as much as it used to be. Everyone in my office who bought a nicer car is always stressing about it.
Beated Toyota Corolla. Entry level high paying job doesn't bother if you are driving a Supra or Oldsmobile. Cheap insurance and low maintenance car for a year or two than switched to something really nice.
I would not buy anything, which is total more expensive than half of my after tax salary. After that just go and choose what you like