lol, owned on the math

 

I don't think you have the math quite right there bud. You get the job, get the car, and show me the $1,000 you are putting away every month in a bank statement.

It just won't happen. You will be MUCH tighter than having an extra $1,000 to throw around. Believe me! Making $48K is not all that much for a $46,000 car! You do realize that comes down to about $33,600 take home with taxes....

Here is my math for you....
$33,600 ($2,800 a month)
-$850 car loan
-$500 college loans
-$200 credit card
-$400 rent
-$400 insurance
- $150 GAS
LEFT with $300!!!!!!!

And that's no food, no entertainment, no nothing!!!!! And that's even if you have a $2,800 take home, and it could easily be less, I was giving a high estimate. Your plan is now at over 30% for your car. Not saying it isn't possible, but you will be STRETCHING it quite thin.....

Not trying to talk you out of it, just trying to be realistic.....

 

Another one of those classic can I afford an Evo questions. The general answer is, if you feel like you're "stretching it" but still within realistic range, then you can't afford it.

Are you aware that Evos are expensive to insure and maintain? Just check out prices of replacement tires. Additionally insurance fees believe or not also depends on your credit quality.

So I have to say if you:
1. Have a very stable job
2. Have started an IRA account
3. Contributing at least the full/partial matching amount to your 401K
3. Have a seperate rainy day fund
4. can afford the insurance
5. can afford the purchase tax
6. can afford the property tax if applicable
7. can afford premium gasoline without even blinking
8. can afford synthetic motor oil and other maintence items (about 2X more expensive than standard cars)

then I say go for it. Gotta think long term first before short-term. Doesn't sound like your Prelude is broken.

Here's my situation:
-$1000/mo rent
-$100/mo for insurance
have 2nd set of winter tires ($500 paid in Sep)
have already performed my 60K maintence (I think cost $200, $300?)
made my full 2007 contributions to my IRA
depositing $ every month to rainy fund
can make full 2008 IRA contibution anytime
paid off my current Evo
no other debt.

and I still feel a bit "stretched" if I purchase a new $30K car.
Basically the formula you should use is, if you lose your job you should be able to hold out for at least 3 months without a job.

just my 2 cents. This is why we're in a housing/subprime crisis.

 

If you're talking gross income and since I'm married we're talking Combined Gross Income then I'm at .04%....yes me and my wife make a good living but I also work a lot of Overtime.

 

Good points. We're in very similiar situations with salary & rent (mort.). I payed in full on my 401k on '07 & just started my IRA. Have a rainy day fund accumulating, need to get it to a '3 months bills' point. And my job is quite stable, I've been there for 2 years and it's still going strong. I have 5 years of experience in my field before this job (and a degree from LSU), so if I lost it, even it times got tuff, I'm fairly certain I could find another job if I had to.

I guess my main concerns is 1) whether or not I should try to knock out some or all of the $9k I still owe for college before getting the X & 2) do I want to keep the prelude as a DD & save even more for a down payment instead of just selling the lude or just sell it for the down pay.

I know by keeping the prelude I keep my X fresher & newer for MUCH longer, but will I be able to afford both payments on the x, with insurance on both cars & maintenance on both cars plus everything else? Plus my wife hates the idea of me having 2 cars everytime I've brought it up.

Anyhow, thanks for the advice mdosu, makes good sense.

 

Is your prelude paid off? If it is I don't think insurance would be that much if you only had liability on it. Then again everyone has different opinions on insurance.

 

I think you'll be strecthed thin.

IMO, your first priority is to get your 3-month 'rainy day' fund. After that, what's the interest on you student loans? Mine's only 3%, so I'm paying that off at the minimum.

Personally, in addition to putting 8% of my net income into my 401k, I try to put an addition 15% into savings. Since I already have my rainy day fund though, I'll splurge a little here and there on trips, track days, etc.

 

I can definately agree on the 3-Mo. plan. My student loans are at 6% right now. I should have taken out more actual 'student loans' in college but I was stupid & ran up some credit cards when I ran out of money in school when I needed cash. Got rid of the credit cards since with a secured loan at 6% interest. Started out at about $20k, now I'm at $9k, so I'm getting there.

Someone told me to just put the $9k on a 0% c. card for a year & then switch cards when the year is up. That kinda freaks me out... can't your credit score drop if you keep doing that? I've got really good credit now & dont' want to screw it up.

I suppose what I need do is just be patient and start saving now, & as another poster mentioned, see how tough it will be to set aside $600 on top of everything else, and see that goes for a few months. Thanks again.

Yes, it's paid for. It's got 150k mi. on it. I've been doing a lot of maintenance on it myself & it's ran pretty well. Although recently I discovered that I may have a rear main seal leak.

Oil keeps accumulating at the bottom of where the trans. meets the engine block. I noticed it when I kept smelling burning oil. It doesn't leak much, doesn't make much of a stain at all in the garage, just kinda collects a wet oily area there that will sometimes form a few drops. Plus I keep hearing this really annoying fast 'cricket' noise coming from the transmission housing when the clutch pedal is not engaged (idling). Seems like it keeps getting louder & it worries me even more than the oil really. So I'm thinking the oil from the r.m.s. may have affected something in the clutch area... and probably not in a good way.

Anyhow, I should just buck up & get a buddy to help me for a day & pull the tranny. I know I'll pay twice as much to have a shop do it...

And the little devil is sitting on my shoulder pointing at the Evo X saying... ah, just sell the prelude and get that SOB.... angel's sayin fix your prelude, pay off that $9k of college debt, save up $15,000 for a great down payment (~2+years down the road) and do it the 'right' way.

This is getting more & more

My apologies.

 

Do that only if you need to float the balance for a while until you're in a better position to pay it off or if you're dedicated to pay off the balance. Either way don't use it as a way to leverage more debt - in other words don't use it to free up credit that you plan to use. That can get you in BIG trouble fast.

Ok - on making a major purchase. My suggestion is to pick a price that you really feel comfortable with and that you can live with. Here are some basic guideline that I have come up with that I use -- and they work well for me.

Don't buy a house that costs more than 3X annual and don't buy a car that's more than 50% annual. These numbers aren't for everyone but they work for me.

So for example, IF I made $50K a year - my house would be $150K (about $1200 a month) and my car would be $25K (about $500 a month).

Those two items alone would take up $20,400 which would equal up to about half my take-home pay. That would leave roughly $1600 a month for Savings (always plan for the future), fuel, insurance, food, utilities, entertainment and fun. That might be about $1000 bucks for an average person.

The remaining $600 is for crap like new tires, oil changes, speeding tickets, mods, I think I'll take a vacation -or- crap the air conditioner broke.

It all goes somewhere fast and as much as I'd love to have a new $40 car out the door -- I hate feeling broke and scrounging for change so I can hit the McDonald's drive-through. I am so through with that Shyte! Ya know?

Anyway - just some advice from my personal experience.

 

That's the worst recommendation someone can give you. If things come up in a year and you aren't able to pay that 9K, you are going to be charged heavily on interests. Now I am not sure if this is true or not, but a friend of mine who worked in a credit car company told me that if the balance is not paid at the 0% expiration date, they will charge you with interests all the way back from day 1.

I'd really think you should pay off the 9K before getting into another debt. It's like the "cat catching mouse" game if you end up getting different debts.

 

A car forum with enthusiasts is NOT the right place to ask for financial advice...

 

LOL. Seriously. He was WAAAAY off.

 

Honestly, it sounds like you are on the right track here, why screw it up by blowing a lot of money on a toy? Pay off the secured loan, put $10k or so in savings, and then think about the purchase at that time. If you want a different toy, go buy something cheap for a couple grand, and pay cash for it. It's alot easier to absorb a toy that costs a few thousand total, than it is to absorb a toy that costs a few thousand every three to four months. Keep the Honda, fix the oil leak, and use it as a daily driver while the toy sits at home for the weekends. Then when you have an emergency, and the toy has to dit for a while, it can.

 

To answer the original question, my car note is zero% of my income. So is all my other debt though. I don't have any debt. The last loan I took out was in 2004 when I bought a couple tractors from Kubota at 0% financing. Otherwise I would have paid cash then too.

 

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