Bullitt Mustang - $50k - How the Duck do people afford crap?

[lowflyn]

I have this same thought often. Many friends paying over $1000 per month for vehicles they never pay off. Just trade them in on something else 2 years later.

I'm wanting a full size truck but can't stomach prices. Used are just as bad. Looks like I'll be buying something 20 years old just to keep from spending $20k.


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[ford fanatic]

Exactly. I've had my current truck for 15 years, and just ordered a new one.

I agree with this, but sometimes your vehicle needs change as your family grows...

I also have a 13 year old truck I bought new that I daily drive that has 271K miles, so I'm all for keeping a vehicle until it dies.

 

[Coiled03]

Standard rates, that makes sense.

As opposed too......?

Even at 0% for 5 years it's still $833/mo.

 

[coposrv]

Leasing a vehicle is a ridiculous idea. You are throwing money away. There is no advantage that benefits the " long term renter".

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I can completely write off lease payments.


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[JJackson515]

I can completely write off lease payments.


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This. In fact, I write off all my vehicle payments, insurance, mods, etc. So its either i buy more vehicles and parts or pay more to uncle sam.

 

[Grabber]

As opposed too......?

Even at 0% for 5 years it's still $833/mo.

My Durango was $52,xxx, 2.25% APR, 72 Mo, mid 700's, zero down.

My Wife's Volt (before GM dropped the MSRP and lowered the quality level of the car) was $47,xxx out the door, 1.9%, $1,500 down, 72 month, is $660 a month. That is a sub 50K car, yet, is hundreds less than the advertised 1K a month payment.

$833<$1,000+ a month.

 

[CompOrange04GT]

Dual income families perhaps. I'd be happy to only have $2k a month mortgage.

Yup. My mortgage is $900. I make pretty good money in the oil industry. Fiance' has been in the medical industry for over a decade.

 

[01Jes]

This. In fact, I write off all my vehicle payments, insurance, mods, etc. So its either i buy more vehicles and parts or pay more to uncle sam.

You mod a leased vehicle?

 

[Corbic]

Maybe I'm bad at math, but, how are 50K cars $1,000+ per month?

The ONLY way I can see that is if the person has a three year loan or they have a 20%+ interest rate and a short term loan.

Otherwise, a 50K car is NOT a $1,000 a month payment.

Cars.com calculator fwiw:
$50,000 car
6% sales tax
4.25% Interest rate
60 month loan

=$982.07 note.

Standard rates, that makes sense.

As mentioned - even at 0 or 1-2%, it's still nearly $1k.


Just for yucks -

2018 Mustang GT Bullitt $51,385
Indiana Registration - $840.44
Indiana Sales Tax (7%) - $3,596.95
Total Financed - $55,822.39

60m @ 4.5% = $1,047.70
60m @ 0.9% = $951.81
72m @ 2.9% = $845.65

Insurance is likely another $100+ per month.

 

[DMassey]

the auto industry (and perhaps even the atv industry as well) will eventually have a crash like the mortage crisis a few years ago. People are extending auto and sxs loans so far that they're constantly upside down. When they trade, they roll that debt onto the next loan; and it's an endless cycle. Eventually people will get so upside down on depreciating asset loans that it's all gonna come down.

First thing young guys do around here is go out, get $60k trucks & $25k/$30k side by sides... don't think nothing of the monthly payment because they've maxed out the loan terms.

 

[top_notch]

A lot of people do not live within their means. I am generally a saver. I purchased all my cars used and have yet to have a car payment. I don't carry credit balances. And I took out a 15 year mortgage 16 years ago. I also have 3 kids, headed to college soon. I had no parental support so I said I'd never do that to my children. All their college tuition is paid for and I will pay for room and board. Graduate school is on their own. It's a nice feeling to owe nothing. My saving has allowed me more freedom than I ever thought possible. I spend a ton of money on my kids (daughter travels the country playing competitive fastpitch softball), and I truly enjoy watching her team play. I travel the country with my boys for Scouting events and allows them their hobbies (guitars, R/C cars, fishing, boating, etc..) I could easily sign for a 2018 Mustang, but instead am happy with my 2011 GT. I truly enjoy the things that I have already.

 

[roadracer247]

I get what the OP is saying. Bunch of young kids from Travis AFB riding around in platinum edition trucks and wives rolling in brand new Loaded Tahoe’s. It’s frustrating to see when I’m driving around in an older paid off commuter. It’s unreal the amount of people who have $60-80k cars/trucks.

But at least I’m paying down my mortgage, putting money towards my retirement, deferred comp, & got solar installed so I can run my AC all summer. I’m also married with a one year old. Trying for a second. So there’s that too. Kids certainly make it more difficult to buy exspensive shit. I also did other small things that make a big difference month to month. Like my house is LED everything. I have all new HE (high efficiency) appliances. Plus, I’m in a line of work that offers a good pension. So I’ll actually be able to retire at 55. My parents spent their life in sales and lived paycheck to paycheck. They have no degree. Which is important nowadays because it’s an entry requirement for lots of positions. They will work till the day they die. My degree (BS in Fire Protection Administration & Technology) earns me an extra 6% a yr towards my salary. It’ll also be beneficial later in promoting.

It all comes down to a decision. It’s either you choose to live below your means and have a little less. Or live above your means with constant debt. Which means you’re constantly going to be hustling. Nothing wrong with that if you’re interested. I’m not. It’s just a decision.

 

[Coiled03]

I get what the OP is saying. Bunch of young kids from Travis AFB riding around in platinum edition trucks and wives rolling in brand new Loaded Tahoe’s. It’s frustrating to see when I’m driving around in an older paid off commuter. It’s unreal the amount of people who have $60-80k cars/trucks.

But at least I’m paying down my mortgage, putting money towards my retirement, deferred comp, & got solar installed so I can run my AC all summer.

That's why I try to keep telling myself. I may not have the nicest car I can afford. But I also don't think there are many people in my age group that have as much in their 401k, or are living debt free, for example. Of course, I don't have any visibility to national averages on 401K balances (it seems you can't get a straight story on that out of anyone), so it's entirely possible I'm fooling myself lol.

 

[jeffh81]

I spend money i dont have on parts i dont need to impress people i dont know

 

[Rocket254]

That's why I try to keep telling myself. I may not have the nicest car I can afford. But I also don't think there are many people in my age group that have as much in their 401k, or are living debt free, for example. Of course, I don't have any visibility to national averages on 401K balances (it seems you can't get a straight story on that out of anyone), so it's entirely possible I'm fooling myself lol.

I've always heard 1x salary by 30 and 2x by 35 as the recommend benchmark suggested by most money blogs. As for a data point, I'm 31 and met the 2x by 35 requirement earlier this year. That said, it may be easy for me to do that considering I am counting my company ESOP shares.

 

[gimmie11s]

That's why I try to keep telling myself. I may not have the nicest car I can afford. But I also don't think there are many people in my age group that have as much in their 401k, or are living debt free, for example. Of course, I don't have any visibility to national averages on 401K balances (it seems you can't get a straight story on that out of anyone), so it's entirely possible I'm fooling myself lol.

I read constantly that the average 30 year old has less than $5000 saved.

Not sure how true that is, but in my opunion if you don’t have well into the 6 figures saved by the time you’re late 30s/early 40s then you better plan on working until you’re 70+.

Doesn’t sound like a great idea to me.

I’d like to hang it up by 55, 60 at the absolute latest.

 

[Kevins89notch]

A friend was just talking about his new neighbors. Their son just got hired as a firefighter and bought a brand new M3. His GF who also lives at home, I guess decided to keep with the theme, and just picked up a new M3. Two new or at least slightly used M3s...100K via two cars when combined they both live at home and don't make 60K.

Thats why i said along with other bills. AKA a house. A friend of mine makes 57k a year and he bought a 65k powerstroke. He lives with his parents.

I know someone like that.

 

[Kevins89notch]

A lot of people do not live within their means.

BINGO!

I know people with my income with brand new cars and a modded 03 Cobra or newer 5.0 with a whipple, etc.

Meanwhile I'm saving as much as possible driving a 16 year old civic and wrenching on a foxbody.

 

[DoubleApex]

I read constantly that the average 30 year old has less than $5000 saved.

Not sure how true that is, but in my opunion if you don’t have well into the 6 figures saved by the time you’re late 30s/early 40s then you better plan on working until you’re 70+.

Doesn’t sound like a great idea to me.

I’d like to hang it up by 55, 60 at the absolute latest.

My goal is to have enough saved for retirement by 55-60 at the latest as well.

 

[FIVEHOE]

Ummm.... some of you are INCREDIBLY misinformed about how tax brackets work...

For those saying pay more into 401k to drop tax brackets, I hope you’re aware that you hit tax brackets AS YOU EARN. This means you pay 10% until you earn 15k, 20% until 50k, 25% until 75k, etc (just throwing out numbers for example. Putting money into 401k just takes away from your take home (pretax if non IRA) and can cause you to not hit a higher tax bracket. If you do hit a higher tax bracket, it’s not like you’re taxed X% higher because you hit a certain threshold.... you’re only taxed that higher rate on earnings once you hit that threshold....

Also I hope someone said this earlier, but I CBF’d reading all these replies.