To a car enthusiast what is a reasonable monthly car payment note to you guys? And also how many months/apr is considered not terrible?
Posted by ALDIsNumber1Fan@reddit | askcarguys | View on Reddit | 44 comments
To those who do have a newer car with a car notes, as I’m sure there are many with an older car with no payments needed.
mehmetunalb@reddit
Being a car enthusiast and financially responsible at the same time is difficult. I'd say if you have any debt besides a student loan or a mortgage, don't get into a car loan as long as your daily is running okay. As for the "fun car", be patient, save for it and buy it with cash. That's worth the ease of mind. If you have to finance, run the numbers for 30-36 months and see if you can afford it but sign a contract with the max of 48 months so you can comfortably afford it. Ideally stay below 15% of net monthly income including gas, maintenance and insurance. You can pay it off early if things are stable after 2-3 years. Lastly, make sure to save 3-6 times of your monthly expenses (emergency fund) before you google any fun car you love to own. These are the sad but logical truths I think.
spokismONE@reddit
0$ per month is the most i would pay
I dont recommend financing sports cars at all. Buy a used whatever you can afford.
Kat70421@reddit
Lmao as a non “enthusiast” but a chick that knows a thing or two about cars and DIY maintenance/repairs (though I don’t DIY anymore), zero for payments. I’ve always paid cash, even when that meant a $700-1000 car that others would throw away.
Financing a car is one of the most socially acceptable financial bonehead moves one can make. Especially if it’s overextending yourself in your 20s as soon as you have enough income to be dumb with it.
mijoelgato@reddit
🎯 buying a car on credit is a top-tier bonehead move.
jrileyy229@reddit
So if you don't DIY your own repairs anymore... How do you not end up massively upside down in a 1k dollar car????
A $1k dollar car can and will end up costing you 10k over a few years if you can't DIY stuff. You're probably going to go through a rack, bearings, bushings, joints, exhaust, cat, brakes, lines, fuel pump , tires etc etc etc. Retail priced parts and labor gets you to ten grand real quick.
So after 3 years you could have leased a brand new civic for ten grand or driven a beater you put ten grand into $800 at a time.. I'd take new car
Kat70421@reddit
How do you get “upside down” on a car you paid cash for?
Anyway, I don’t DIY anymore but I also don’t buy $1000 cars anymore. My current cars are a 2005 and 2011 and were $4-6k each 3-5 years ago. If you’re careful on the purchase end and keep up on the basics, there aren’t usually too many big repairs to worry about amortized over the life of the car. Only big expense I’ve really had was rebuilding a transmission for $3k but that was 70,000 miles ago so I’ve made my peace with that.
Knowing how to DIY has also saved me a ton by knowing when shops are blowing smoke (or trying to get me to pay the girl tax). Love walking out with a rap sheet of $3,800 in random stuff I turned down after an oil change.
jrileyy229@reddit
What I think you're referring to is being upside down on a car loan.... Versus being upside down on the car. We don't need to get into semantics, if you've spent 10k over 3 years chasing sunken cost into a beater car that is still a beater, you're not happy about it.
I understand what you're saying, but calling like 80% of the population boneheaded is a little self-righteous. Lots of people live in small apartments in crowded cities with nowhere to work on a car. No apartment complex is going to let you wrench on your car in the parking lot... That's a big insurance no-no. Doing anything parked on the side of the street is damn near suicidal.
You're not necessarily wrong, but anything $1000 cheap requires DIY and anything retail makes no sense. And those are great purchases, sadly the days of getting 10 year old 100k mile civics for 5k are gone
Kat70421@reddit
The floor has definitely shifted (my $700-1000 cars from 2012-2017 are probably at least double that now) but decent cars can still be found for around the $5k point. I helped a non-car-savvy friend find and buy a really nice 2015 Honda pilot with 108k on it for just over $6k recently. She’s thrilled. Far from the rule, but it’s possible. There’s a lot of crap out there, or people that think their 97 Corolla is worth the same as that Pilot.
The main problem I’ve seen a lot of people run into is “I need a car right now, today, this week” and that leaves no chance to make a deliberate choice and often leads to overpaying and at a crappy interest rate.
My comment about financing cars writ large may have been a bit flippant but it was very depressing when I had so many friends out of school in their early 20s making maybe 30-50k/yr tops and driving brand new cars at stupid interest rates. Just bleak. And new cars now are even more.
Oak510land@reddit
Agree 100%. I don't think people should go into debt for cars, especially ones they don't actually need. I have my dream car as well as a few others and no debt, DIY everything. I'd love a 911 but not enough to make a bad financial decision for.
kushan22@reddit
48 months max for me, apr is whatever is best at the time 0% offers are the best obv
wpmason@reddit
Less than 15% of take-home… that includes payments, taxes/registration, insurance, and fuel.
No car, especially any of these modern pieces of shit, is worth over-extending yourself.
Aggressive_Action@reddit
Everybody on Reddit loves to brag about how they would never have a car payment since they’re all financial gurus and drive shitboxes to save money lol.
The reality is most people have car payments, and paying some interest on a loan to have something that you likely couldn’t afford to pay cash for is totally okay in the right circumstances.
I’ll give you a real answer though. I’d probably be okay with a $1000-1200/month payment for a car I really want. It’s way more than I pay right now for my current car, but I’d definitely be okay with that amount for something I really love.
For reference, I’m 27 and make about 130k/year.
CCWaterBug@reddit
I believe that its less than half that have a car payment.
Aggressive_Action@reddit
Well like 85% of new cars are financed, and just over half of used cars. So odds are, if somebody buys a car, they’ll have a payment.
Of course this doesn’t account for people who have owned their cars long enough to pay them off, but the moral of the story is that the majority of Americans will finance an automobile at some point in their life if they purchase a car.
Glittering-Intern656@reddit
As I grow, I see my point of view change. When I got my first car, I was young and stupid so I got a new subaru. Everyone told me it was a bad idea but I didn't listen and I bought it. I did struggle sometimes but I was lucky enough to always have a job so I never missed a payment. To this day I'm still driving it but I kept the idea that I had to pay those 500 dollars , but instead of paying it to a bank, I put it into a savings account. If I ever have car issues (I haven't had any big ones yet) I just dip into it. I'm sure there's smarter ways to invest those 500 bucks but this works for me.
panther38t@reddit
103,000 a year working in locking people in cages because the government said so. Fixed that for you.
Aggressive_Action@reddit
Lol shut up. There’s plenty of people who deserve to be locked in a cage
Glittering-Intern656@reddit
I appreciate the sentiment but understand why some people feel that way. Justice isn't always perfect, but I'm always happy when knowing that some people in there will be away from the public for a long time
Glittering-Intern656@reddit
I see why you'd see it that way and can't fault you for it, but I will say that I treat them with respect and courtesy. It's a job someone's gotta do. While the justice system is far from perfect, I'm sure you're happy that some people that are in there with me, are away from your loved ones. Also, to clear it up, I'm not a CO. There is other positions in correctional facilities
twospooky@reddit
It's all relative to income, but general rule of thumb is no more than 15% of your monthly take home. So if you make 65k/yr your payment shouldn't be more than around $850. Add insurance and you're looking at probably close to $1000. The less months and lower apr the better. Apr is highly dependent on the current economic climate. Right now with rates as they are, even people with good credit struggle to get under 5%. Average credit should be happy with 10% or under.
Shadowfeaux@reddit
My rule is to aim under 400/mo. But that’s directly related to my income. If my income 2+x’d then that number might change.
allmightylemon_@reddit
I pay $250 a month and I’m not happy about that lol
SenorCardgay@reddit
Car payments? Wtf? What kind of "enthusiast" doesn't own their own car?
what_irish@reddit
Depends on what you can afford. How much do you make, what are your expenses, current debt, life goals, etc.
Don’t ask car people for financial advice.
IncoherentAnalyst@reddit
$0
No debt, no fret.
Mostly-Useless_4007@reddit
Chasing a payment is how you let a dealer take the most advantage of you. You should never negotiate a payment. Only out the door pricing. Past that, you should arrange your own financing and get the dealer to beat that. After the OOD pricing has been fixed, then you can talk rates and terms.
Only a financial advisor with a complete view of your situation can give you advice regarding what makes sense from a payment or down payment perspective. Someone’s income does not tell you how big their mortgage is, what other debts they may have or what investments they have.
Seek the advice of a qualified professional financial planner.
Original_Bicycle5696@reddit
In my opinion its a mistake to have the daily be the fun car and I've always paid cash for my toys. Had a 2007 xterra and a supercharged mustang for the fun one. I like to modify my toys and it never seemed like a good idea to buy wheels/tires/suspension for a car that the bank owns, let alone any power adders that could cause increased mechanical trouble down the road.
If you buy them right, with a little sweat equity you can keep your money together while modifying it a little. Bought a 90k mi miata, did a 2.5L swap with coilovers and rollcage/current cert race seats/rollbar. Sold it two years later for what I had in it, minus my labor because it had still in date certificates on the harness/seats. Turned that money into the mustang.
I guess I would rather pay cash for a car and have a "Mod Payment" into a financial bucket every month instead of a car note.
TLDR: There are two types of enthusiast, the cheap ones and the spendy ones.
kilertree@reddit
4/10/20 rule. The loan should be more than 4 years, The amount that you pay on it in a year shouldn't exceed 10% of your yearly income and should at least put 20% down. Some people believe you should do a car loan in 3 years to lower your liability.
Logical-Consequence9@reddit
For me I wouldn’t feel comfortable paying over $400 a month, but realistically I could swing up to $650 a month. I just don’t like big numbers I guess lol, and I’m a big car enthusiast so I’d gladly spend more on a car and cut spending elsewhere to get one I really love. I’m a level 2 robotics technician and make about $72k a year for context.
I’m currently leasing a 24 Impreza RS because my monthly payment was $350 a month, but I kinda screwed myself because a few months later my apartment finished installing EV chargers and a bunch of EV incentives came out. I would’ve much rather had a cheaper payment for a shorter duration on an EV because I own a Miata as my fun car, but need something with more grip for our brutal winters. I am considering downsizing to just one car and getting a new 86 and a good set of winter tires. I learned to drive in a truck so I’m familiar with how to handle RWD in adverse conditions. That would probably be a payment of around $475-$500 depending on down time.
Mrcsbud2@reddit
If it's a car a truly want and not just a daily. 800 max
If it's a daily and reliable, 500ish.
Affectionate_Rice520@reddit
Any APR less than what you’re currently earning in a high-yield savings account is acceptable. As for the amount of payment that’s entirely up to what your salary is and whether or not you’re comfortable with a 20% or more payment. If you’re earning 4.6% on a dividend Then who cares if you finance for 1.99, 2.99, or 3.99. As long as you’re earning more, you’re making money but the moment you pay more than you’re earning is when you should pay cash.
KaleidoscopeDan@reddit
What I can afford and what I feel comfortable paying are different. The bank instantly approved me for a 73k loan yesterday, I’m looking at cars that cost between 20-30k dollars because I don’t want to pay more than $400 a month.
Regular-Amoeba5455@reddit
For frame of reference: I’m 31 with an 820 credit score. I have too many cars and a boat but that’s my big hobby.
My truck was 62k. New. I put down 10k. Payments $760. Paid off early (5 years). 5% APR. This was 2019.
My wife’s SUV was $53,000. 2 years old with 16,000 miles. I put down $10,000. Payments $750. Paid off after a year because of the lousy 8% APR. This was 2023.
My weekend car was $21,000. 6 years old with 52,000 miles. I put $5,000 down. Payments $285. I put an extra $1,000 towards it every 6 months because the ridiculous 9% APR. This was August 2024. Rates are absurd.
My old commuter I paid cash for back in 2015. I still have it. It was a new Honda Civic for $22,000.
TheFragileRich@reddit
zero. I don't finance depreciating assets.
whatsapprocky@reddit
Based on my experience of owning 2 cars so far, my plan is to make sure that if I finance, my monthly payment must be less than one of my paychecks. And this also includes insurance. That way, I won’t have to worry about whether I’ll be able to cover the car each month. I’ve been easily able to afford both of the cars I’ve had so far by following this. Of course, you will need at least decent credit and be willing to fork over more money for a down payment.
J-Rag-@reddit
Depends on your income. Personally there's no new car that I want. We'll, no realistic car that I want and can afford without making a million a year. I love my 5 speed swapped Passat TDI. Not much I'm gonna trade that for.
How far will i go for a car i like? I had a shop do an engine swap on my offroading 99 Dodge Durango after I hydrolocked the original. Not including the purchase, I've easily got $10k into that thing between mods for offroading and having that engine swap done.
ChrisGear101@reddit
Car enthusiasts are the worst people to ask for financial advice.
UberPro_2023@reddit
It’s simple, whatever you can afford without it being a financial burden is what you can afford. I think a good formula is no more than 10% of your monthly take home, with a maximum of 15%.
jabbafart@reddit
The most I've paid is 400. I wouldn't do it again.
dustwalker14@reddit
Just depends what you can afford. My payment is in the high 600s. If I could find the right m3 (not really looking right now) I'd be ok around 1k, 1200 top.
PsychologicalDeer644@reddit
300 max.
Buy cash if you can.
johncuyle@reddit
Mostly this. I've paid cash for every car I've owned except two, the first I put down 30% and paid it off within a year, the second I put down 50% and I'll have it paid off in less than a year. I'd have it paid off already if the market hadn't tanked and taxes hadn't been a surprise.
StopNowThink@reddit
Depends on what your budget can accept.
Triple-Depresso@reddit
I think it’s something like 10% of your take home/ income to be reasonable