Quote:
Originally Posted by kamakazitp
this is a sweeping generalization. what if I've just paid off my house? what if my job and my spouses both provide company cars and we're looking for a weekend/pleasure car? kids just moved out? etc.
its a good generalization, but thats really all it is. if its 26% of my income, I shouldnt buy it? what if I'm getting a great deal on the car (ie 8k discounts on z4s)? would it be worth stretching 1k on the price to prevent being unhappy for the entire life of my next car because I didn't get the auto that I REALLY wanted.
affordability is simply how much YOU are willing to pay for a car and can continue to make the payments. if its 50% of your salary and you have to give up double-ply toilet paper, eat out less, and rent a smaller apartment, so be it, as long as thats what you want.
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No, 25% is a guideline, not a rigid reality....doesnt matter what your expenses are though, since those are ever changing, emergencies happen....the roof could cave in, requiring 30k for a new one.....your what ifs are not reality based......of course anyone can do whatever they want, and Lord knows they do.....however, regardless of monthly expenses, buying a car that is, for example, 50% of ones gross household income is exceptionally irresponsible.....to put it plainly, it is 'mortgaging your future'.....Sure, you may be making your payments, but something has to give, and since the younger the buyer,statistically the more the % of income will be spent, it will probably be the 401k, the IRA, the life insurance, the college fund, and the 3-6 month emergency fund that suffers....afterall, you think you're going to live forever ..no, you'll never lose a job.....who cares about retirement when youre 29???...it's a tough thing when you're friends, relatives, and neighbors drive realllllllly nice cars....sh--, the temptation....
I really love this topic.......