12% are paying $1,000+ a month for car loans ...

[OVERKILL]

What would you drive if you had no mortgage, no debt, no kids and your wife and you made $324K last year?

Well, that would ultimately be a discussion between me and my wife.

- You said "last year" instead of "a year", do you two normally make $324K or was last year unusual? My income varies depending on bonuses and contract work, so some years are more productive than others. This is clearly a factor.

- Who is the primary breadwinner? I make considerably more than my spouse, so I wouldn't be overly pleased if she was out soliciting vehicle purchase advise without me, but she wouldn't be thrilled if I was making purchases without her input either (which I did, once, and that didn't go well, bought my first SRT). That said, I drive a more expensive vehicle than she does at the present time.

- What are your monthly bills? If you are paying $5K a month in rent that's significantly different from living in a home mortgage free or with a small mortgage payment.

Ultimately, this question has no answer because everybody is different and without getting into specifics on cash flow and other things that I've mentioned, it's simply too ambiguous to even advise on. I know doctors making good money driving very nice German cars and Tesla's and I know people whose annual income is 100x that driving pick-up trucks. One of the wealthiest women in North America drove those big old Buick station wagons and had a small fleet of them.

 

[Silver]

I think you already know that they most likely don't.

Do you really think so? I am steadily knocking my expectations down for people, but that's a big notch... I mean to be spending so much money on needless exuberance with no regard to future needs.

 

[macarose]

What would you drive if you had no mortgage, no debt, no kids and your wife and you made $324K last year?

I took a big risk about 25 years ago and left my job as a senior financial analyst to become... a ringman.

The guy who hoots, hollers, and helps the auctioneer create the urgency to buy? That was me. I did 5 to 7 auctions a week for about 2 years.

It was decent money. Not great. The interesting thing is I had always been a frugal zealot. I enjoy not spending money on things that are unnecessary, and investing my money on those that improve my family's quality of life.

I have owned a dealership for a long-time now (which never once charged a bogus fee) and do a lot of data analysis in the auto industry. If you Google long-term quiality you'll find out exactly who I am. What do I drive?

Pretty much whatever I want. After over 25 years buying, selling, and financing cars I mostly drive older Toyotas and a unique electric vehicle called the Mitsubishi i-MiEV which got a brand new EV battery shortly before I bought it in early-2021 for $3750.

I don't enjoy shopping. I don't pay any attention to the media, and all the food we eat is fresh and unprocessed. So call me an outlier if you must, but I just don't see the point in destroying my wealth just to get from Point A to Point B.

 

[Legal Eagles]

I have seen too many friends and clients save save save then die young. Need to balance enjoying life now vs saving some for later. Bitterly saving every penny is no way to go through life.

I agree... if you are debt free and saving (investing) 30% of your gross income toward retirement, emergencies, or just a rainy day, then do whatever you like with the other 70%... including (GASP) buying a new car...

It is all a balance however... you must have this discipline all throughout your adult life... age 65 is not the time to find that your priorities have been out of whack for the last 45 years... at that point there is no time to course correct. For every person who scrimps and saves and then dies young, there is another who spends like crazy, carries debt, then realizes at 65 that they are broke and will have to literally work until they drop dead.

Neither scenario is ideal, that is why one must have balance.

However much money you make, someone out there is living on 70% of that amount, so do not tell me it is "impossible"... it may be hard in the beginning, but that is one's penance for poor decision making during one's younger years.

 

[Legal Eagles]

Do you really think so? I am steadily knocking my expectations down for people, but that's a big notch... I mean to be spending so much money on needless exuberance with no regard to future needs.

Yes, I really think so...

This article hit me like a lightning bolt. Honestly I had no idea so many people lived like this... even outwardly seeming "successful" people...

And remember this was prior to COVID... the situation is likely worse now... it is easy to say, that is "their" or "his" problem... but when the house of cards built on consumer, housing, and student loan debt falls, it will be all our problem... I sometimes swear we as a nation learned nothing from the great recession of 2008-2009.

See @billt460 post #82 above... he nailed it.

I respect the author for baring his soul, but it is nonetheless incredibly sobering...

https://www.theatlantic.com/magazine/archive/2016/05/my-secret-shame/476415/

 

[zzyzzx]

Do you really think so? I am steadily knocking my expectations down for people, but that's a big notch... I mean to be spending so much money on needless exuberance with no regard to future needs.

It should be pretty obvious that a large segment of the population is incapable of long term planning.

 

[odie]

It should be pretty obvious that a large segment of the population is incapable of long term planning.

Know of many . Try to explain to them how to get out of debt like us . Won't listen . Never them , it's everyone / everything else .

 

[OVERKILL]

It should be pretty obvious that a large segment of the population is incapable of long term planning.

Population? Heck, we have governments that are wholly incapable of planning beyond an election cycle.

It's all part and parcel of the "Walmartization" of society. Get the latest trinket, buy the fancy looking crap, if it breaks, buy another. There is so much "entry level" junk now it's appalling, but it's designed precisely around that buy-break-buy mechanism; unconstrained consumerism.

Politicians work the same way. Don't worry about long-term planning with regards to things like the grid and infrastructure, we'll toss a few solar panels over here, sprinkle a few wind turbines over here and voila! Wave around a few meaningless tokens as the term comes to an end and people temporarily forget about cars disappearing into pot holes, all is forgiven and the cycle continues. Buying votes with our own money is classic.

 

[Legal Eagles]

Population? Heck, we have governments that are wholly incapable of planning beyond an election cycle.

It's all part and parcel of the "Walmartization" of society. Get the latest trinket, buy the fancy looking crap, if it breaks, buy another. There is so much "entry level" junk now it's appalling, but it's designed precisely around that buy-break-buy mechanism; unconstrained consumerism.

Politicians work the same way. Don't worry about long-term planning with regards to things like the grid and infrastructure, we'll toss a few solar panels over here, sprinkle a few wind turbines over here and voila! Wave around a few meaningless tokens as the term comes to an end and people temporarily forget about cars disappearing into pot holes, all is forgiven and the cycle continues. Buying votes with our own money is classic.

Dang, if things are that bad in our friendly and idyllic neighbor to the north, imagine how bad it must be down here in the United States!

I thought you Canadians were living in a veritable paradise up there, with single payer healthcare, ice-hockey, mayonnaise on everything, and honest politicians!

 

[Blueshound]

Population? Heck, we have governments that are wholly incapable of planning beyond an election cycle.

It's all part and parcel of the "Walmartization" of society. Get the latest trinket, buy the fancy looking crap, if it breaks, buy another. There is so much "entry level" junk now it's appalling, but it's designed precisely around that buy-break-buy mechanism; unconstrained consumerism.

Politicians work the same way. Don't worry about long-term planning with regards to things like the grid and infrastructure, we'll toss a few solar panels over here, sprinkle a few wind turbines over here and voila! Wave around a few meaningless tokens as the term comes to an end and people temporarily forget about cars disappearing into pot holes, all is forgiven and the cycle continues. Buying votes with our own money is classic.

Substitute bombers for solar panels, and aircraft carriers for wind turbines and I would agree with you.

 

[BMWTurboDzl]

What would you drive if you had no mortgage, no debt, no kids and your wife and you made $324K last year?

A new BMW M3, Alpine White, Carbon Fiber roof. Unfortunately they've moved onto the pig nosed version of this model.

 

[OVERKILL]

Dang, if things are that bad in our friendly and idyllic neighbor to the north, imagine how bad it must be down here in the United States!

I thought you Canadians were living in a veritable paradise up there, with single payer healthcare, ice-hockey, mayonnaise on everything, and honest politicians!

We are currently paying a "carbon tax" on basically everything, but the spin by the government is that Joe Average "gets more back than he pays". Which of course defies logic, there's clearly an overhead and round-trip cost on the process and the price of everything goes up because none of the companies affected are going to just absorb the cost, it gets passed on to the consumer.

This is very much "buy votes with our own money" (the carbon tax "rebate") with a round-trip tariff to boot!

Then, the same government is claiming they are going to stop gang shootings by taking guns away from licensed target and sport shooters, spending billions on a virtue signal that will achieve absolutely nothing other than appeasing a chunk of their voter base, while illegal firearms flow unimpeded across the border, something they aren't spending any real money on, and gang shootings in urban centres continue unabated, and in fact are on the uptick as career criminals are given a smack on the rear and told "don't do that again now you little rapscallion" and sent right back out onto the streets.

You can't make this stuff up, it's a circus and we have a top-notch crop of clowns.

 

[OVERKILL]

Substitute bombers for solar panels, and aircraft carriers for wind turbines and I would agree with you.

Well, we are still using C-130's, not sure we even have any bombers, and we don't own a single aircraft carrier, lol.

 

[brianl703]

You can't make this stuff up, it's a circus and we have a top-notch crop of clowns.

The legislative body in Virginia has been referred to as the "imperial clown show".

 

[Astro14]

That makes two of us...only loan I have is on my home.

To be fair, I have had many car loans in my life.

Further, if we were to buy another car in the next three years, I would likely use a car loan to preserve cash on hand that is going towards some other goals we have.

But I prefer not to have one. Life without a car loan is great. My last couple of cars have been paid for with cash.

What I found shocking is the size of the loan that people are willing to take out for a car.

I know I‘ve told this story before, but it’s germane. Many years ago, as CO of a Navy Reserve unit, I was driving my 1990 Toyota 4 Runner, with nearly 200,000 miles on it, on a Saturday morning for drill weekend.

I was passed by a brand new, beautiful, bronze colored Infiniti G37 coupe, driven by one of my sailors, an E-3, who I knew lived with his mother. Unit CO - no car loan. Young sailor, working to go to college and living with his mother - huge loan.

I found my Training Officer first thing that morning, and said, “Next weekend‘s training topic will be personal financial management.”

 

[k1xv]

I have a car loan with a $708 payment on a 2022 Z51 Hard top convertible Corvette. It was a $40K loan, 60 months, @ 2.44%. I could have paid cash by withdrawing from my retirement account, but would have had to pay income tax on the IRA withdrawal. So the loan made more sense.

We all have our priorities and preferences. Because my wife has health issues, we don't vacation very much. And we mostly eat at home and make our own coffee instead of Starbucks. We moved to Vermont 20 years ago, and feel like we are always on vacation.

Glad I got the car loan before interest rates jumped due to the Federal Reserve. My credit score is around 800

 

[Astro14]

What would you drive if you had no mortgage, no debt, no kids and your wife and you made $324K last year?

Same exact cars you see in my signature.

 

[GON]

I have six vehicles, one car loan. I keep one car loan with Navy Federal Credit Union to simply keep a positive track record. We owe peanuts on the vehicle and can pay off the car loan in a moment's notice, simply by a transfer from savings to the loan. But I think it is prudent to have a car loan simply as the rates are often so low, it helps show a current ability to pay an installment loan on time. The payment is $109 per month. Three-year loan.

 

[TiGeo]

One other comment/observation re this topic - trim level. Folks seem to buy the top trim all the time now. I've never had a top trim level new vehicle. Started with our first new car, my wife's '00 Jetta GL - stripper....crank windows, no cruise. $16.5K....we added alloy wheels to replace the hub caps and boom, looks basically like the higher trims. Then we when we had kids, used '03 Explorer XLT...I remember thinking XLT was the solid price-point, not a stripper, not loaded. Our used '06 Odyssey was an EX-L...not the top but close but moving up! Then finally our current family hauler/wife's daily, an Atlas SEL - one down from the top. My Passat W8 is top-trim but this was bought when it was 18 years old. My daily/Golf Sportwagen? S/base trim. I have a buddy that just leased a new RAM - the highest trim....$80K sticker. Doesn't anyone buy base or mid-trim vehicles anymore? There usually is substantial cost savings while still giving you plenty of amenities and safety features. Always something that VW did great....their base trims look good vs. the domestics/Toyotas that often ding you visually for buying the more basic trim levels.

 

[CKN]

One other comment/observation re this topic - trim level. Folks seem to buy the top trim all the time now. I've never had a top trim level new vehicle. Started with our first new car, my wife's '00 Jetta GL - stripper....crank windows, no cruise. $16.5K....we added alloy wheels to replace the hub caps and boom, looks basically like the higher trims. Then we when we had kids, used '03 Explorer XLT...I remember thinking XLT was the solid price-point, not a stripper, not loaded. Our used '06 Odyssey was an EX-L...not the top but close but moving up! Then finally our current family hauler/wife's daily, an Atlas SEL - one down from the top. My Passat W8 is top-trim but this was bought when it was 18 years old. My daily/Golf Sportwagen? S/base trim. I have a buddy that just leased a new RAM - the highest trim....$80K sticker. Doesn't anyone buy base or mid-trim vehicles anymore? There usually is substantial cost savings while still giving you plenty of amenities and safety features. Always something that VW did great....their base trims look good vs. the domestics/Toyotas that often ding you visually for buying the more basic trim levels.

Statistics show car loans are longer and owners want their vehicles to be nice places to spend between 5 to 7 years. Whether anyone on here agrees with that is irrelevant.

Of course-one COULD ARGUE what came first-more "loaded" vehicles or longer loans to finance them?