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Re: Jalopnik Financial Suggestion [Re: skyactiv] #5271114 11/18/19 05:59 PM
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WhyMe Offline
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Originally Posted by skyactiv
Some of you are understanding it wrong.

I think what Jalopnik means is that a married couple shouldn't spend more than 10% of their combined income on vehicles. If you got to finance it, a 100K a year income couple can afford a new Honda Accord as the payments wont be beyond 10% of their annual income.

If I told you what my wife and I earn, you might wonder why I drive an Elantra.






This . if you make 100k , which is kinda poverty wages in my area , you should spend no more than $10k a year on your vehicle payments .

Re: Jalopnik Financial Suggestion [Re: madRiver] #5271123 11/18/19 06:07 PM
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spavel6 Offline
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If you're trying to save money, not spending too much on a car helps you achieve your goal.. Not sure why this is brain science.

In other news..

Living frugally helps you save money..


2003 VW Jetta Wagon TDI 198k M1 5W40 TDT
2001 VW GTI VR6 250k T6 5W40
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Re: Jalopnik Financial Suggestion [Re: madRiver] #5271125 11/18/19 06:09 PM
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fdcg27 Offline
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Originally Posted by madRiver
A number of of not buying more then 10% yearly household income for vehicle purchase price was thrown out on Jalopnik. Thoughts?


I think of this in a less dimensional way.
People should buy what they can comfortably afford with plenty of income left for savings, vacations, entertainment as well as life's unexpected events.
Buying less car than you can afford is always a good plan.
I know that I might be in the minority here, but a car to me is no more than a transportation tool that I try to select for potential entertainment value. For my wife, it's more a matter of what she's happy driving on her brutal commute. Either way, a tool.
OTOH, for some a car is also a hobby, so that's a different kettle of fish.
At the end of the day, people should buy what they want and can easily afford. If a more costly ride makes you grin every time you drive it, then why not?


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Re: Jalopnik Financial Suggestion [Re: madRiver] #5271144 11/18/19 06:21 PM
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bullwinkle Offline
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The smart way is the Dave Ramsey method stated above-when you buy a car with a loan, NONE of the interest is tax deductible, and ALL of the interest is paid BEFORE the principal is paid off. Notice how all of my vehicles are at least 14 years old, and I borrowed ZERO to buy any of them-a car loan is one of the worst loans around, only CC debt, personal loans, & payday loans are worse.


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Re: Jalopnik Financial Suggestion [Re: bullwinkle] #5271185 11/18/19 07:02 PM
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maxdustington Offline
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Originally Posted by bullwinkle
The smart way is the Dave Ramsey method stated above-when you buy a car with a loan, NONE of the interest is tax deductible, and ALL of the interest is paid BEFORE the principal is paid off. Notice how all of my vehicles are at least 14 years old, and I borrowed ZERO to buy any of them-a car loan is one of the worst loans around, only CC debt, personal loans, & payday loans are worse.
Normies are stuck because they can't wrench. If you pay someone else to fix your car, then eventually an old car is going to nickle and dime you. It makes a lot of sense for people to lease or drive a car until it needs a timing belt/expensive service and unload it. Having a beater fleet or even two beaters can be expensive in major cities that have both expensive registration and lots of bad drivers to drive up insurance rates (like Toronto).

It CAN make sense to invest in a DD for some people. I wouldn't take out a loan unless I absolutely had to and even then it would have to be a limited edition or something unusual: If the Suzuki Jimny ever returns to Canada, I would take out a loan for one without hesitation.


99 Toyota Tercel CE 5EFE/C151
Re: Jalopnik Financial Suggestion [Re: domer10] #5271201 11/18/19 07:18 PM
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Mad_Hatter Offline
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Originally Posted by domer10
Think it was geared to these people especially younger ones who strap them selves into a 10 year car loan or less or buy a car that is 50g performance car when they make 25 k a year.

Good financial acumen starts young. Teach your kids, like am doing, how to save and be frugal with their money (for example how to know when something's a "deal" or not and needs v. wants) and they'll likely make good choices later on in life. Unfortunately those who could best use the advice from a Ramsey or Clark Howard aren't reading/listening to them.

Re: Jalopnik Financial Suggestion [Re: WhyMe] #5271335 11/18/19 09:38 PM
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Wolf359 Offline
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Originally Posted by WhyMe
Originally Posted by skyactiv
Some of you are understanding it wrong.

I think what Jalopnik means is that a married couple shouldn't spend more than 10% of their combined income on vehicles. If you got to finance it, a 100K a year income couple can afford a new Honda Accord as the payments wont be beyond 10% of their annual income.

If I told you what my wife and I earn, you might wonder why I drive an Elantra.






This . if you make 100k , which is kinda poverty wages in my area , you should spend no more than $10k a year on your vehicle payments .


I think you're a little off there, if you're paying 10k, you're making $833 a month in car payments? Then you have insurance, gas, maintenance, taxes etc on top of that?

Re: Jalopnik Financial Suggestion [Re: madRiver] #5271405 11/18/19 11:24 PM
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madRiver Offline OP
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My only guess was it sends people to used cars where depreciation hit taken and a comfortable window for pesky auto repair and maintenance and insurance. No feeling strapped.

I am going to try it for next purchase.

Re: Jalopnik Financial Suggestion [Re: madRiver] #5271465 11/19/19 04:29 AM
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Lapham3 Offline
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We bought some new cars years ago in the 'rust years'. Young and dumb with 2-3 year loans and cars that rusted quickly and badly. Later the cars handled rust better and the govt quit allowing consumer debt to be deductible. So we bought a few year old used cars and saved up for the next one. Pretty soon we were able to do other things with the savings and also more for retirement. Many folks with 7 year car loans or leases and always a payment to somebody-I wonder if they will they be able to build enough savings for the future..

Re: Jalopnik Financial Suggestion [Re: madRiver] #5271506 11/19/19 06:15 AM
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It's jalopnik for Pete's sake ... Of course they are going after the lowest common denominator here.
10% of your annual income on the total purchase price of a car? That's find if you want to run around in a cheap car that's worn out and not aesthetically all that great.
But again - the answer is in the name of the website ... "Jalopnik". They're not going after high-end stuff to make high-end customers happy. It's all about the bottom line of the bottom feeders.


The act of preventative maintenance, in and of itself, is FAR MORE important than brand/grade/base choices among lubes and filters.
- under maintaining something is akin to abuse/neglect; that can kill equipment by shortening the lifespan
- over maintaining something has never been proven to be anything but a waste of time and money
Re: Jalopnik Financial Suggestion [Re: MrHorspwer] #5271511 11/19/19 06:22 AM
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Sayjac Offline
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Originally Posted by MrHorspwer
Reading the story helps.
It's wasn't Jalopnik suggesting it. The topic stemmed from an article on CNBC from Sam Dogen of Financial Samurai.

Jalopnik's stance on the article (specifically, Tom McParland) amounted to:
Quote
Oh boy, another “millionaire” dolling out car buying advice that is typically both not-helpful and limited in scope.
and
Quote
...the best advice I can give is to be honest with your own budget and understand your total expenses.

https://jalopnik.com/how-much-should-you-spend-on-a-car-based-on-your-income-1839886863
Thanks for the rest of the story and the link. And yes, reading the complete story with context did help.

Re: Jalopnik Financial Suggestion [Re: madRiver] #5271517 11/19/19 06:27 AM
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10 year auto loans in the future will NOT surprise me.

There's a slowdown in vehicle sales in the USA and our economy needs people borrowing money to make big purchase items.

Very low interest rates and new car smell make that shiny new vehicle irresistible.

The next recession will be worse than 2009 and have many people wishing they didn't over leverage themselves to the point of bankruptcy.


Re: Jalopnik Financial Suggestion [Re: madRiver] #5271538 11/19/19 07:00 AM
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I think it's pretty obvious that most people shouldn't buy new cars on credit.

Re: Jalopnik Financial Suggestion [Re: madRiver] #5271564 11/19/19 07:37 AM
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I have a very low tolerance for debt.
One way I have avoided debt is to buy cars that have depreciated enough for me to pay cash. I look for older cars with low mileage. Since cars don't rust down here, it makes it a little easier.
This strategy allowed me to be totally debt free by the time I was 45.
I have never made a huge amount of money, but we have kept our expenses low. I am now concentrating on retirement. I may not be able to retire early, but we should be able to live comfortably.
If we always drove as good of a car that we could afford, we would still have car and house payments.
It's not worth it to me.
I have no problem with other people having debt. I just avoid it if I can.


1997 Rav4 4wd manual 90k mi.
1997 Camry LE 4cyl 52k mi.
1998 Acua CL 4cyl manual 72k mi.
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Re: Jalopnik Financial Suggestion [Re: danez_yoda] #5271588 11/19/19 08:14 AM
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Miller88 Offline
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Originally Posted by danez_yoda
i like the dave ramsey method. Pay yourself 500/month until you get enough to buy the car then buy it cash. then start saving for your next car.




That works great in parts of the country where cars can last 20+ years. Up here in the rust belt, once you hit 7 years, you're spending a ton battling rust .. every repair costs 10x because every single bolt snaps and has to be torched off.

If I lived in Arizona, I couldn't even imagine myself driving anything made in this millennium!


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