I was out at my neighborhood pool this afternoon and was talking with one of my neighbors. I noticed he had a brand new shiny Acura TL (my favorite car). I commented on how nice the car was and how much I wanted one but it was too expensive for my situation right now. My neighbor stated...my payment is only $750 a month. Needless to say, I was totally blown away and it took me a minute to recover. My car payment is $555 and I am still kicking myself for signing that contract. He stated he decided to treat himself and went out and bought one on a whim. He states his interest rate is only 1.9%. I asked why the payment was so high and he advised he thinks he may have been upside down on his trade-in. He had a 2 yr old SUV before so I can only imagine how upside down he was. I know he has a good job and makes pretty good money but for my situation, that is wayyyyyy to much for a car payment. My $555 is wayyyy to much for a car payment. As stated in my post regarding Mistakes and Corrections, this is one of the mistakes I made and am working to correct it.
My car payment is $531. I've had the car for a year and a half now. I am still kicking myself for not buying a car cash instead. You live and you learn. I tagged you for a meme on my blog. Check it out.
A friend of mine went to look at cars a while back, and the salesman asked what she was currently paying. She told him (it was in the high $200's) and he told her how great that was, and that he rarely sees anyone that leaves his dealership with a payment of less than $450 a month. That shocked me!! I am leasing, but plan to buy my car when my lease is up next year. I pay $323/month currently and am hoping that by the time I have to BUY my car, I'll be out of CC debt.
Over $500 a month for a car payment? Are you guys nuts? Does that include insurance? Are you buying new vehicles?
When I bought out my lease, I took a 3-year term on the car to make the monthly payments under $350 which was about the price of the lease payment, and then I proceeded to pay them an extra $20-50 a month. I paid it off a year early.
Oy vey. I am now totally scared to buy my next car! (which luckily won't happen for another 3 years)
Dimples - I don't feel so bad now. How long do you have left on your car loan?
Chicky - If you can, pay cash for the car.
MapGirl - Unfortunately, that does not include insurance. I bought a new vehicle and rolled in negative equity. Please see my post on "Mistakes and Corrections."
My loan was for 60 months so I have 40 something left. But I plan on paying that off way before then.
Dimples-
Dang, my loan was for 72 months. I have about 60 months left but I would like to have this loan out of my life in no more than 24 months.
Next time buy a cheaper car. Too many people think it's okay to have car payments forever. And high car payments at that.
Assume you got something that cost $255/month and not $555, you'd have $300 more a month to invest. $300 month @10% return over 40 years nets you $1,897,223. Almost $1.9 million you won't be able to retire on.
Besides, why buy something for $50,000 when something that costs $20,000 will do the same thing? AKA, get you places? They both depreciate. If you assume that a car depreciates 20% as soon as it is off the lot, then you instantly lose $10k on a $50k car and only $4k on a $20k car. Who's the bigger loser?
i finished my car payment last year. i used to pay $336 for an '02 honda crv. it's my first car and i don't really know much about cars until i bought one. my grandpa paid it cash and i paid him back with 4.5% apr for 60 months. i did not know i got a good deal out of it until the 3rd year of paying when i got the initial contract that i have an 11% apr if i used honda's financing deal. because of that i told myself that i will not buy a car if i'm not paying it with cash or have a really big down payment. i plan to use my car until its last breath.
I have no car payment. $750 is more than I spend in a month on rent, cable, utilities and cell service COMBINED! Speaking of car payments though, I would like to start a savings account and sock away money each month for the day when my pretty little Stratus finally dies.