How much "car" would you buy?

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You're mixing capital costs and cash flow (income).



If you're thinking income because you're still in wealth building mode, then think in terms of cashflow. What is percent hit on monthly cash flow?



If you're thinking flat cash, then think capital and wealth.



Otherwise, for a depreciating asset, it's a good question of how much is a realistic expenditure? I wouldn't expect you to drop cash for a car that is running 10% of your holdings. Not even 5%. In that case, the cash flow analysis is a better route and look for a TCO that is lower.





But as others pointed out, the money is there to make your lives better.
 
[quote author="bltserv" date=1258522234]How much car would I buy ?

Already have a couple great cars.



Now that I am in my second childhood. Over 50, Single, and pretty well set.

And Renting. (Thanks in part to this board).

I find that my cars are the "vice" of choice.

Last night we attended the launch of the new Maserati Grand Tourismo over at Shady Canyon CC.

Really nice convertable 4 Door Luxury Sports car.

Always pays to be on the Ferrari/Maserati Dealer potential buyer list.



<a href="http://www.maserati.com/maserati/en/en/index/models/GranTurismo.html">http://www.maserati.com/maserati/en/en/index/models/GranTurismo.html</a>



GF likes this one cause it fits with the 2 kids.</blockquote>
You and me, I've been into cars since I got my license. From the lifted toyota 4x4 with the 35 inch tires in the HS/College days to the Fast & Furious Toyota Supra early career days to the 911 Turbo mid career track days...it's always been about having a fun car.
 
[quote author="Nude" date=1258518316]Rule #1: Make the wife happy.



Rule #2: Get all the doodads available.



Rule #3: Pay cash.



I don't really get the percentage argument because you can either buy the car or you can't. If you have to finance it, then you really can't afford it outright and probably shouldn't be signing up for 5 years worth of paymennts. If you buy your wife her dream car, chances are you won't have to buy her another one for a decade or so, if ever. And I always buy my cars loaded with all the options. I didn't do that on my first vehicle and I quickly learned from that mistake; 24 years later and my truck still doesn't have A/C.</blockquote>
Why pay cash when you can get financed for less than 4% on a used car below blue book and still write-off the cost of the car and the interest on the car loan. ;)
 
[quote author="irvine_home_owner" date=1258600416]Do any of you lease cars?



I thought a good rule was buy appreciating assets, rent depreciating assets.</blockquote>


I bought a brand new truck in 1985. I was 15. I paid $5873.42... in cash. It's sitting in my garage right now, a little banged up from working in bars for a decade, but mechanically sound and still passes smog inspection. Why continually rent something when you can buy it outright and skip the fees, interest, and mileage charges?
 
[quote author="irvine_home_owner" date=1258600416]Do any of you lease cars?



I thought a good rule was buy appreciating assets, rent depreciating assets.</blockquote>


It's a good idea to lease one if you won't exceed the contract mileage per year and can take very good care of your vehicle.

Honda has a $5 a day deal. Audi and Merc at a very low lease rate too.
 
That question was for those that finance.



I would actually do a 0% finance over a lease... but if I'm going to pay interest I might as well lease.



I'm not really one who likes to put $30k into something at one time... especially into something that's going to lose at least $5k in value as soon as I sign the paperwork.



And what kind of truck did you get brand new in 1985 for 6k? I don't remember many cars that sold for less than $10k back then.
 
[quote author="Nude" date=1258542789][quote author="Perspective" date=1258537500]I did a good job controlling the wife's housing desires buying a house that cost less than 2.5x our income. Now I'm trying to determine what's reasonable to spend on a car.</blockquote>


Look, you don't know me and I don't know you and the last thing I want to do is come off like a salesman, but here it is: when it comes to your wife, you need to indulge her sometimes. The occasional pair of new shoes, a new sparkly, flowers for no reason, and yes... a new car. The reality is she's put up with your nasty farts, your endless snoring, your gross ear hair, your addiction to (insert guy thing here) and she's still with you. How much is making her happy worth to you? Because that's all she's gonna feel when you hand her the keys... your appreciation, love, and gratitude rolling on wheels. If you come across as putting a price limit on a car, you are telling her that she's worth "X" and that's an invitation to marital counseling if not outright divorce.



So, take it from a guy who dotes on his wife like mad... make your wife happy. Find out what car she really wants, move an appropriate amount into your checking account, then take her down to the dealer and tell her to go pick one. After all, when you get right down to it this is what money is about; making life better for us and those we love. I understand your need to be careful and prudent, but sometimes it's ok to enjoy the rewards.</blockquote>


Aha! Now all I have to do is, somehow make DH read this, and then take him to the Maserati showroom because I am worth it:-)

Kidding aside, I have been saving money to buy a shiny European car for almost four years now. The amount grew so much that I ended up putting it into something else.. and am still thinking on when to buy a pretty car, and why when my Honda is working just fine.
 
[quote author="irvine_home_owner" date=1258602005]And what kind of truck did you get brand new in 1985 for 6k? I don't remember many cars that sold for less than $10k back then.</blockquote>


The Toyota 1/4 Ton Pick-up with a 4-speed and the bullet-proof 22R engine, purchased at Earl Ike Toyota in Costa Mesa. In the last 24 years I have had to replace one timing chain and guide assembly, 3 alternators, 3 sets of belts, 4 sets of brakes, 5 sets of tires, 2 batteries, one slave cylinder, one brake caliper, and one clutch. It spent eight years in SoCal, 6 years in Las Vegas, 2 years in Idaho and eastern Oregon, 5 years in western Oregon, and the last few years I finally garaged it... ending it's 20 year service as my daily driver.



It was cheap because I was 15 and didn't think about things like A/C, power steering, cruise control, factory radio, or a 5-speed tranny for highway mileage. I have since only purchased cars that were loaded ;)



Her name is Betsy and she has 232,316 miles on her ;)
 
[quote author="Nude" date=1258545771][quote author="gypsyuma" date=1258544457][quote author="Nude" date=1258542789][quote author="Perspective" date=1258537500]I did a good job controlling the wife's housing desires buying a house that cost less than 2.5x our income. Now I'm trying to determine what's reasonable to spend on a car.</blockquote>


Look, you don't know me and I don't know you and the last thing I want to do is come off like a salesman, but here it is: when it comes to your wife, you need to indulge her sometimes. The occasional pair of new shoes, a new sparkly, flowers for no reason, and yes... a new car. The reality is she's put up with your nasty farts, your endless snoring, your gross ear hair, your addiction to (insert guy thing here) and she's still with you. How much is making her happy worth to you? Because that's all she's gonna feel when you hand her the keys... your appreciation, love, and gratitude rolling on wheels. If you come across as putting a price limit on a car, you are telling her that she's worth "X" and that's an invitation to marital counseling if not outright divorce.



So, take it from a guy who dotes on his wife like mad... make your wife happy. Find out what car she really wants, move an appropriate amount into your checking account, then take her down to the dealer and tell her to go pick one. After all, when you get right down to it this is what money is about; making life better for us and those we love. I understand your need to be careful and prudent, but sometimes it's ok to enjoy the rewards.</blockquote>


And you don't know me and I don't know you..... so just one thing to add:



<strong>Not all women are created equal.</strong>



If my husband overspent on a car for me, I would return it.</blockquote>


Ahem...



<blockquote><span style="color: green;">Find out what car she really wants</span>, move an appropriate amount into your checking account, then <span style="color: red;">take her down to the dealer and tell her to go pick one</span>.</blockquote>


I pick my words most carefully madam and, as you can see, my advice precluded any possibility of 'overspending' as his wife would be choosing the car herself. Presuming she is as intelligent and as capable as yourself, I am sure she would choose a car that she would not need to return for reasons of cost.</blockquote>


Well its a relief you think we women know how to add. Of course, the safety net is in place because Big Daddy only put enough in the checking account that he deems "appropriate". Awwwwww...... [big pouty lip sticking out.]
 
Nude.... I am just teasing. I enjoyed your "putting up with the farts" oration as much as the next woman. Cars just aren't my thing.



Now my husband did get me a day at the spa for a gift a few months back....... oh it was pure decadence for an entire day. And it only put him (and me) out a measely $500 buckaroos.







Sidenote: How the heck do you spell "MEEZLEY" "MEASLEY"??????......shrugs shoulders.
 
[quote author="gypsyuma" date=1258606199]Sidenote: How the heck do you spell "MEEZLEY" "MEASLEY"??????......shrugs shoulders.</blockquote>


Firefox's spellchecker says "Measly"
 
[quote author="gypsyuma" date=1258605807]Well its a relief you think we women know how to add. Of course, the safety net is in place because Big Daddy only put enough in the checking account that he deems "appropriate". Awwwwww...... [big pouty lip sticking out.]</blockquote>


I know it sounds condescending, but clearly she's not in charge of the finances so I tailored my advice to meet the OP's scenario. If she tells him "I want a Infiniti G37 Convertible Sport", he can check the Infiniti website and see he's going to need ~$60k in the checking account to cover it. If she's odd like my wife, she demand a PT Cruiser in a pretty blue... meaning he'll only need half that amount.



Either way, the point was to know in advance so he could just write the check after doing his homework, making the whole experience more about her than about money ;)
 
I found the "50-30-20 Rule" from Liz on MSN (personal finance columnist). Using your net income, spend:



50% on Must Haves (housing, insurance, food, etc.)

30% on Wants (cars, dining out, entertainment, etc.)

20% on Savings and/or Accelerated Debt Reduction



These ratios may work for median household income earners (who have to finance car purchases), but once your income is high (high enough for Obama to consider you "rich"), then 30% on Wants sounds excessive. If you earn a healthy income, I think you should be saving 30%+ because you're not guaranteed that income for the next 30 years. As a professional, with degrees, you can make certain assumptions, I guess.
 
[quote author="irvine_home_owner" date=1258602005]That question was for those that finance.



I would actually do a 0% finance over a lease... but if I'm going to pay interest I might as well lease.



I'm not really one who likes to put $30k into something at one time... especially into something that's going to lose at least $5k in value as soon as I sign the paperwork.



And what kind of truck did you get brand new in 1985 for 6k? I don't remember many cars that sold for less than $10k back then.</blockquote>
That's why it is always best to buy a 1-2 year old car with low miles. You'll be able to get the car for 20-30% off the price you'd have to pay to buy it new. The key is to make sure the car is in good shape.
 
[quote author="Nude" date=1258608414][quote author="gypsyuma" date=1258605807]Well its a relief you think we women know how to add. Of course, the safety net is in place because Big Daddy only put enough in the checking account that he deems "appropriate". Awwwwww...... [big pouty lip sticking out.]</blockquote>


I know it sounds condescending, but clearly she's not in charge of the finances so I tailored my advice to meet the OP's scenario. If she tells him "I want a Infiniti G37 Convertible Sport", he can check the Infiniti website and see he's going to need ~$60k in the checking account to cover it. If she's odd like my wife, she demand a PT Cruiser in a pretty blue... meaning he'll only need half that amount.



Either way, the point was to know in advance so he could just write the check after doing his homework, making the whole experience more about her than about money ;)</blockquote>


No, it's fine. I just happen to wear the (financial) pants in this family. But that is not always the case.
 
If you have the cash, buy her what she wants.

If you do not have the cash, buy what you can afford with cash.

Debt is slavery.
 
Awgee.



True words of wizdom.

A Woman you love and an expensive car are like gambling.

Bet what you can afford to lose.

Then have a really good time doing it.
 
I agree about debt. I used to do some bankruptcy work, and the nonsense I saw..... not all, but alot of nonsense.



I also have seen alot of people come up in the world, but then they spend their money just as fast as they get it, like it is burning a hole in their pocket.



I will pass on all that.



What is really messed up is how I pay cash for everything and have zero debt, and that actually brings my credit score down. Punish the responsible ones?
 
Depends, do you allocate to the car based on income, or based on assets? I bought my car cash and it's about 6% of my net worth. <=5% would be better, car depreciation should even that out :-).



Depends on your personality type. I save 50% of my income every year as that fits my long-term goals and I'd rather commit cash than future income streams.
 
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