I’m trying to figure out how much car I can afford that still allows me to hit my $200k networth goal this year while also purchasing a decent car. My calculations are below…
5 Months Left in Year
5.5 Months of Paychecks Left
$4286 / Month take-home after 401k contribution * 5.5 ($23573 earnings left)
$12000 ($2400 / month) pre-tax 401k contribution
$2500 monthly spending cap = $23k over $200k networth
$3500 month spending cap = $18k over
$4000 month spending cab = $15k over
Of course, a lot still depends on how the stock market does, as I could easily be way under or over in January 2013. That said, working out these calculations makes me feel much better about spending $15k to $18k on a car. I’m still tempted to buy something that is $8k, and instead give myself a $10k headstart on my $50k savings goal for next year, but then I’m approaching my 30s and would like a reasonably nice car at this point in my life. Alternately, I can move closer to public transportation, increase my monthly rent $1200 from the $650 it is now, and forget the car purchase altogether (or buy a condo for $3k per month.) What do you think I should do?
I would recommend looking into a used rental car. That is what I did. They only sell recent models with 50,000 miles or less on them. I got a 2010 Corolla with 47,000 on it for 10,800 (plus tax). Enterprise, Hertz, etc all sell their well maintained rental cars before they get too old. Browse Hertz's used car site and check out the selection. You can search by location, color, year, model, etc. The prices are no negotiation too, which I saw as a plus because I didn't want to spend time haggling.
I agree with slweal. used rent-a-cars are usually very clean and have little to no existing body damage… they dont keep them around all that long as they like to cycle in the new sexy models that people want to drive. great place to start!
-olivia <3
olive @ceramic chef recently posted..Run your kitchen like a professional chef with Yoshi Blade and Kyocera Ceramic knives!
Go for public transportation, although that is probably easier for me to say living here in ye olde Europe than if I was living in the land of the automobile 🙂