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MonsieurVox t1_iy9u3av wrote

I don't agree with him on everything, but I really like Dave Ramsey's rule of thumb on this: the value of your car(s) shouldn't exceed 50% of your annual income. So in your situation, you'd want to look at a car worth no more than $50,000. Dave would say to pay it in cash, but it's not completely in the realm of stupid to finance it for a couple years. Just don't get upside down on it.

Can you afford the monthly payment on a $100k car? Sure. But you'd be tying up a huge chunk of your income and net worth into a depreciating asset. In other words, it's a stupid idea. Just because you can doesn't mean you should.

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Optimal-Effective t1_iy9vkpk wrote

Not just the payment but also insurance which would be high due to value of car and financed

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MonsieurVox t1_iy9w91u wrote

Yup, great point. Many people understandably want to get a nice car once they make a good income or get their first "adult" job, but fail to consider that it's not just the monthly costs — payments and insurance — but also the ongoing maintenance costs, fuel costs, etc.

And that's not even factoring in the opportunity cost that's associated with spending $1,500+ per month on a car payment when that could be going to investments.

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Optimal-Effective t1_iya0syr wrote

the best feeling is having no car payments. my last two cars I bought used and paid in full with cash. I spent the first 10 years of my driving life with car payments and its just not worth it.

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FireBeyond t1_iy9ybex wrote

>Can you afford the monthly payment on a $100k car?

Plus interest.

Also, it's an M3.

I have an "equivalent" (no religious wars, please), the Audi RS 5. There's the ongoings too, on a performance car:

New tires? $2,000.

New brakes? $6,000.

And so on.

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Milnoc t1_iy9ww71 wrote

I took out a 2.5 year loan on an $11,950 CAD/$8,900 USD 2015 Fiat 500 Abarth in 2020. I paid it off early. The total interest paid was some $750 USD/$1,000 CAD. The loan ensured I always had enough cash reserves to take care of any issues that might crop up during maintenance and mods.

It might not be a $100K USD vehicle, but man is this thing ever fun to toss around on twisty country roads! 😁

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