Do I deserve it? [A new car]

Questions on how we spend our money and our time - consumer goods and services, home and vehicle, leisure and recreational activities
Topic Author
Marjimmy
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Do I deserve it? [A new car]

Post by Marjimmy »

Hello All, hope everyone had a nice 3 day weekend.

Little background about me. 25, single no kids, never bought a new car, (drive an 06 ford taurus 135k miles) recent graduate, no debt (living at home), 6 months emergency funds, and roughly 100k in vanguard.

Since graduating I landed a job which pays salaries in the mid 60's. Eventually I want to buy a new car and replace the taurus right now. But what stops me is thinking that if I buy a new car now for 35k, if I were to have invested that money instead 30 years down the road at 8% growth......I'm actually paying well over 100k for the car.

When do you justify new purchases for yourself? Do I deserve a new car for myself?
Very little is needed to make a happy life; it is all within yourself, in your way of thinking. -Marcus Aurelius
arsenalfan
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Re: Do I deserve it?

Post by arsenalfan »

Totally personal decision. You will hear lots of philosophies depending on which anonymous forum you go to.
Jalopnik/Edmunds/car forums: go for it!
Since you're asking on a pretty self-disciplined, fiscally conservative forum, I think you know what type of advice you're looking for.
Buying a 1-2 year old used car/drive with low miles and driving it into the ground makes the most fiscal sense.
We cannot place a pricetag on how much enjoyment you take from the car, however.
awval999
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Re: Do I deserve it?

Post by awval999 »

Sure you "could" do it.

After taxes, making $60k/year with standard deduction, 10% into 401k, health insurance, etc., I bet you only net net $40k/year.

So do you really want to blow a years worth of net income on a car?

To answer your question, no I would not buy a $35k car on a $60k salary while I live at home.
Grt2bOutdoors
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Re: Do I deserve it?

Post by Grt2bOutdoors »

If you buy a new car, how long will you keep it? If you are going to replace it after 3-9 years because you "deserve" it or you feel the need to keep up with the joneses? Then NO, because the hit on depreciation the minute you drive it off the dealer lot, will cost you big time. Let's phrase the question another way - is it worth it to spend 50-60% of your gross salary on a new car? How about purchasing a used dealer certified car that costs half as much but has most of the bells and whistles and only say 30K or less miles on it? Then drive it for 100K miles, rinse and repeat, but save the money lost on depreciation, let someone else pay for it. BTW, your line of thinking is similar to Dave Ramsey's, which isn't bad, so long as the car you are driving now is not a "safety" issue. When the car becomes a safety issue, it's time to replace it.
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radiowave
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Re: Do I deserve it?

Post by radiowave »

why not buy a new car at below $20k? Buy a Honda or Toyota and you can drive it for 10-15 years.
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onourway
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Re: Do I deserve it?

Post by onourway »

Do you deserve one? How can we possibly know?

It's my general opinion that owning a new car is a luxury - and luxuries are, almost by definition, not 'deserved'.

I would argue that the long-term cost of owning a new car at this stage in your life is bigger than even your estimate. If you were to spend $10k instead of $35k, that extra $25k diverted to tax-advantaged accounts might be worth $250,000 or so for you at age 65 - even assuming just 6% annual growth. At your 8% figure that number skyrockets to $500,000!

This is why expensive purchases made at an early age hurt so much. Save as much as you need early on, and you will be ok even if you can't save anything in the latter half of your career.
retire57
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Re: Do I deserve it?

Post by retire57 »

Not so much a question of "deserving", but "affording". You've done the smart math and know the true cost of a new car. Hefty, long-term car payments will delay financial independence, which you are well on your way to achieving.

Buy used and drive for 10 or more years.
finite_difference
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Re: Do I deserve it?

Post by finite_difference »

Deserve is less important than want. Want is less important than afford.

You should be able to get a nice, brand new car for $30,000 out the door, by competing dealers and shopping around. Anything more than that and you are paying a premium for luxury, etc.

Because of your savings, I think you can afford a $30k new car (finance at close to 0% APR or less than inflation) but would try to hang onto your car to 150k miles unless it is having issues. I think there will be plenty of good deals later this year and next year as car sales slow down from their peak.
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jnet2000
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Re: Do I deserve it?

Post by jnet2000 »

Imo, no. I'd want to move out of my parents and get a place of my own rather than get a new car and live with my parents.

We drive good used cars and regardless of income, my wife and I, wouldn't buy a car worth more than 20 grand. All three of our cars have 100,000 miles and are 7-10 years old.
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JDCarpenter
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Re: Do I deserve it?

Post by JDCarpenter »

Personal decision. But that's a lot of money.

(I'm atty married to a doctor, and we've never lived anywhere that had public transit. I bought my first new car at age 52--for less than 16K. DW got hers at 48, for whatever a Civic cost in 2009. YMMV.)
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tim1999
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Re: Do I deserve it?

Post by tim1999 »

At that stage in life, unless the Taurus is on its last legs, I'd rather keep driving it and move out of my parents' house instead.
livesoft
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Re: Do I deserve it?

Post by livesoft »

Since you drive a 06 Taurus, I have to say you really do deserve a different car. My spouse drives a 06 Ford and it is a POS.

But you do not deserve a new car and certainly not a car that would cost you $35K. I drive a Lexus and bought it used. It cost less than $31K out-the-door, so $35K seems to be an outrageous amount for a nice vehicle to me. So if you get something new, then you have to get something cheaper. If you get something nice, then you can still get something less expensive.
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caffeperfavore
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Re: Do I deserve it?

Post by caffeperfavore »

No, you don't deserve it, because it's not a matter of deserving it or not. It's a matter of making a dumb rookie mistake with your money.

I know, because you sound like me at your age and I made that dumb rookie mistake already. Once the novelty of having a new car wears off, you'll be left with a $35k+ hole in your finances. And keep in mind that given your age, the more money you sock away now, the easier your life will be later, as you seem to be aware of already. Having learned my lessons the hard way I now wouldn't dream of buying a $35k car and I have four times the income. It's a waste. Cars are one of the worst things you can spend money on.

Best thing you can do is drive the Taurus until it dies. Next best thing you can do if you really despise the car and it's negatively affecting your life in some way, then get a nice used car. There's plenty of great options for a little over half that amount (gently used Accords, Mazda 6's, Lexus ES's and ISs, etc. etc.).
pacodelostigres
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Re: Do I deserve it?

Post by pacodelostigres »

It's not a popular opinion on here, but leasing is worth considering. I lease a new vehicle with reasonable annual miles for 185/month with only 1st payment and taxes due at signing.

If you leased at that rate for 12 years, which is how long some posters here say you're going to keep a new car that you buy outright, you'd spend ~$27k. You'd be under warranty the whole time, you'd never buy tires or brakes, and always have modern safety and technology. (Yes, your payments are probably going to be higher on subsequent leases due to inflation, but in real 2017 dollars it's all the same.) You also get the option to get rid of a car that is a total lemon, and you also get to buy out the lease if you fall in love with one of the cars along the way. Options have real value.

You aren't getting the nicest car out there for that monthly price, but the cheap car you get 9 years out is going to be a lot nicer than the 9 year old car that you buy today. You just have to be disciplined enough to lease whatever is cheap rather than what you can afford.
ddurrett896
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Re: Do I deserve it?

Post by ddurrett896 »

Buy a new car and drive for 10+ years.
bloom2708
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Re: Do I deserve it?

Post by bloom2708 »

Buy a "better" car. Not new, not $35k.

But a 2-3 year old Honda Civic or Toyota Corolla with 30k miles. Drive it to 150k miles.

Your future retired self will thank you.

First however, save up the money for the difference in your trade and the upgrade. $9k, $10k.
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climber2020
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Re: Do I deserve it?

Post by climber2020 »

No. You're 25 and living with your parents. First priority should be moving out and getting your own place.
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bottlecap
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Re: Do I deserve it?

Post by bottlecap »

"Deserve" is a strange word to use. Does landing I job entitle you to anything other than a salary?

I also concur that it is even stranger to buy a new car you don't "need" whilst still living with your parents.

I was in a similar situation at your age, driving a hand-me-down subcompact with 191,000 miles on it. I did not like the car but loved not having payments. At least until someone ran a red light and smushed it. I was sad to see it go.

I don't think you need it, see no reason you deserve it, and unless there was a true need, I'd be focusing on other things than the car at this point.

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prudent
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Re: Do I deserve it?

Post by prudent »

I don't see a problem in getting a newer car, but a $35K car seems quite expensive given your salary.
alfaspider
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Re: Do I deserve it?

Post by alfaspider »

As others have said, it's not a question of "deserve."

Really, it's a question of financial priorities. Can you purchase of $35k car on your salary? Yes. It is really a good way to spend your money? Probably not. Many BH members with salaries 5x yours do not purchase $35k cars.

That being said, if you want to get rid of the Taurus, there's plenty of used nicer (more fun) cars that can be had for much less. One thing to ask. Are you a car person? Have you always dreamed of car XYZ? Or do you just want something "nice"? If you don't get intrinsic pleasure from cars, I'd argue that the "niceness" aspect wears out quick.
aspiringlawyer
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Re: Do I deserve it?

Post by aspiringlawyer »

What make and model are you looking at? It's been repeated her multiple times, but a new car just doesn't seem the way to go. You're lightyears ahead of many people though with no debt and 100k in investment accounts.

Buy a Toyota or Honda. We got a 3 year old (at the time) Toyota Camry Hybrid and love it! For under 15k. Excellent gas mileage so you're saving money at the pump as well. If you want to spend 35k, maybe continue to drive the Tarus and save up to get the new tesla 3 as it starts production here soon. At least you wouldn't be paying for gas if you use your parents electricity.
tyrnup13
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Re: Do I deserve it?

Post by tyrnup13 »

I definitely don't think you should buy a 35k car at that salary. You should cultivate responsible spending habits at this age. Could you invest in a nice bike to commute to work instead? As you described, there is an opportunity cost of car ownership too, because that money does not get invested. In addition, there is the ongoing annual cost of car ownership. Mr. Money Mustache has discussed this at length, and you might want to refer to his posts for more information.
fittan
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Re: Do I deserve it?

Post by fittan »

You asked this question because you think you have "checked a few boxes". For a 25 years old, you're in a good position. However, the decision you make for the next 5 years will be critical for the rest of your life. Very soon you'll get married, buy a house, have a mortgage, maybe have kids, set aside some money for kids education. The commitment will pile up quickly. Do you really want to have a $35K loan tying you down?

My advice is don't do it...personally I think you'll only deserve it when you can pay cash for it and not blink an eyelid. You will know when you get there.

That said if you Taurus is on its last leg and repairs are adding up, that's a different case. As other suggested, I would buy a used 3 to 4 years old japanese sedan for about $10K to $12K.
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Re: Do I deserve it?

Post by Ron »

climber2020 wrote:No. You're 25 and living with your parents. First priority should be moving out and getting your own place.
Fully agree, unless you are supporting them financially (totally) or they have physical ailments that require you to help.

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TigerNest
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Re: Do I deserve it?

Post by TigerNest »

I bought a really nice new Corolla for $15,500 off-the lot, drove it for ten years, and sold it to Carmax for $6,000. I only sold it because we moved to a city and downsized, or I'd still be driving it.

A new car is a fine decision, but in your mid-20s, with that salary, aim for a lower price point.
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Marjimmy
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Re: Do I deserve it?

Post by Marjimmy »

Excellent replies everyone and thank you. I appreciate the wisdom put into the comments and will surely reflect on them upon consideration.
Very little is needed to make a happy life; it is all within yourself, in your way of thinking. -Marcus Aurelius
2Birds1Stone
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Re: Do I deserve it?

Post by 2Birds1Stone »

Do you deserve it? No

Do you need it? No

Do you want it? Maybe?

There is a whole lot of room in between keeping an old Taurus and blowing $35k+ on a "new" car.
Cornbread
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Re: Do I deserve it?

Post by Cornbread »

Marjimmy wrote:But what stops me is thinking that if I buy a new car now for 35k, if I were to have invested that money instead 30 years down the road at 8% growth......I'm actually paying well over 100k for the car.[/b]
Personally, I don't care for the line of thinking that says "if I took this money and invested it instead, I'd have $X in 30 years" and I really don't like the line of thinking that says "I'm actually paying well over 100k for the car." You aren't.

I mean, obviously you are - like anything else it's an opportunity cost. You buy one thing and lose the opportunity invest it and earn more. But this is life and you can't use all of your money to make more money; some of it has to be used to buy the things you need. So judge this decision not on the opportunity cost of buying a car, but rather on the cost of buying now vs. buying at some point in the future - because at some point you will need to buy a new (or new to you) car.

I'm assuming you're a "pay yourself first" type of person, meaning you routinely/automatically set aside money for your savings goals before you budget/spend anything else. Once you've achieved that, other things like car payments and maintenance costs should be guilt-free. Treat them as line items in your budget. When you don't have a car payment, save that amount each month as a down payment for the next car. If you're driving a newer, lower-maintenance car, bank that line item each month and you'll have a reserve for when the car ages and needs more maintenance.

It seems like this is a purchase that right now is maybe 25% need, 75% want - but given the age/mileage of your current car could easily become 100% need at any time. So it's good you're thinking about this, even if you don't pull the trigger right now. My only other question would be whether another savings goal would be home ownership, and if the new car could wait until that was achieved.

But if it fits in your budget and you're on track for your other savings goals, then by all means buy it.
Isabelle77
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Re: Do I deserve it?

Post by Isabelle77 »

I would never buy a new car before moving out of my parents' home.
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Re: Do I deserve it?

Post by Fallible »

Marjimmy wrote:Hello All, hope everyone had a nice 3 day weekend.

Little background about me. 25, single no kids, never bought a new car, (drive an 06 ford taurus 135k miles) recent graduate, no debt (living at home), 6 months emergency funds, and roughly 100k in vanguard.

Since graduating I landed a job which pays salaries in the mid 60's. Eventually I want to buy a new car and replace the taurus right now. But what stops me is thinking that if I buy a new car now for 35k, if I were to have invested that money instead 30 years down the road at 8% growth......I'm actually paying well over 100k for the car.

When do you justify new purchases for yourself? Do I deserve a new car for myself?
The real question is whether you can afford an expensive new car and from what you've said, the answer is no. Also, ask yourself what else you could do with the money saved by buying a far less expensive car; this is always the question to ask when trying to justify an expensive purchase for yourself.
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michaeljc70
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Re: Do I deserve it?

Post by michaeljc70 »

Trice wrote:
Marjimmy wrote:But what stops me is thinking that if I buy a new car now for 35k, if I were to have invested that money instead 30 years down the road at 8% growth......I'm actually paying well over 100k for the car.[/b]
Personally, I don't care for the line of thinking that says "if I took this money and invested it instead, I'd have $X in 30 years" and I really don't like the line of thinking that says "I'm actually paying well over 100k for the car." You aren't.
I agree. You could be sitting at McDonald's saying if I got the #1 combo instead of the #3 combo that would be $200 some day. I regret some opportunities I had to take great trips (that I could afford) with friends when I was younger- obsessing about the costs.

As others said, it is a personal decision. On the one end of the spectrum you could be spending a lot to keep an old, less safe car running and on the other end you are taking a big depreciation hit but pretty much know your costs (since warranty covers fixes). Personally, I like to buy a new car or one up to 2 years old (still has warranty) and keep it a long time. I don't drive a lot, so the last one I kept 13 years. I don't feel I am being wasteful buying a new car and keeping it 10+ years.
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Meg77
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Re: Do I deserve it?

Post by Meg77 »

Marjimmy wrote:Hello All, hope everyone had a nice 3 day weekend.

Little background about me. 25, single no kids, never bought a new car, (drive an 06 ford taurus 135k miles) recent graduate, no debt (living at home), 6 months emergency funds, and roughly 100k in vanguard.

Since graduating I landed a job which pays salaries in the mid 60's. Eventually I want to buy a new car and replace the taurus right now. But what stops me is thinking that if I buy a new car now for 35k, if I were to have invested that money instead 30 years down the road at 8% growth......I'm actually paying well over 100k for the car.

When do you justify new purchases for yourself? Do I deserve a new car for myself?
No, you do not "deserve" a new car. Yes, you can afford a new car.

I justify new purchases for myself - splurges, if you will - when I know I am on track to reach the rest of my goals and am doing all the "right things" financially. The "right things" may vary from person to person. I think that you can justify upgrading your car as long as you are doing the following:

1. Invest at least 20% of your gross income (preferably in a Roth IRA and 401k)
2. Stay out of consumer debt - including a car loan
3. Maintain an emergency fund of at least 3 months of expenses
4. Move out and establish your own residence.

Now it's still not very smart to buy a brand new car. Let someone else take the massive depreciation hit and buy a 1-2 year old car. It will still be a very nice upgrade from your current model. You have a long way to go before you can justify "deserving" a brand new car. And keep in mind that a $35K car means you'll be working for the better part of a year to earn enough money after taxes to pay for that one item. It's ludicrous to spend more than half your salary on an automobile or any other single consumer splurge. It's also crazy to have a third of your net worth in a car that decreases in value every single day. I would aim for a $15K car at most in your situation. And pay cash. That's still more than double the car you're driving now. And if you're not willing to stroke a check for it then you don't really want it that badly. Car loans seem like a good idea but only exist to convince people to buy way more car than they would otherwise ever consider.
Last edited by Meg77 on Tue May 30, 2017 11:14 am, edited 1 time in total.
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WhiteMaxima
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Re: Do I deserve it?

Post by WhiteMaxima »

Go to Hertz and buy a two year old used Toyota Corolla. Still under warranty and very reliable small car. Drive it till wheel fall off and repeat the cycle.
jharkin
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Re: Do I deserve it?

Post by jharkin »

100k invested is quite an accomplishment at your age, so you are off to a good start.

There is nothing wrong with getting a new, or newer, car to replace that 06. However I do agree with the folks above that 35k is too much on your salary and you should prioritize living in your own place first.

FWIW I bought my first new car about your age making about the same money. I spent 20k and paid it off in 2 years. I had been living on my own essentially since 18. I didn't start buying cars over 30k until I was late 30s, married, owned a house and making about 3x what you do.
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researcher
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Re: Do I deserve it?

Post by researcher »

pacodelostigres wrote:I lease a new vehicle with reasonable annual miles for 185/month with only 1st payment and taxes due at signing.
Can you please share the make, model, and trim level?
Also, how many miles do you get, and how long is the lease term?
pacodelostigres wrote:You aren't getting the nicest car out there for that monthly price, but the cheap car you get 9 years out is going to be a lot nicer than the 9 year old car that you buy today.
I don't necessarily agree with this.
I would argue that a new stripper Nissan Versa or Mitsubishi Mirage is NOT going to be nicer than 9 year old Accord, Maxima, Avalon, ect.
wolf359
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Re: Do I deserve it?

Post by wolf359 »

If my kid was getting subsidized living expenses by living with me, and he bought a new car, I would conclude that it is time for him to move out. Clearly, he doesn't need the support anymore.

Parents want their kids to be independent, successful adults. Prioritize independence and making responsible money decisions over buying a car.
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Marjimmy
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Re: Do I deserve it?

Post by Marjimmy »

I guess it should be noted that I left home at 17, spent 4 years in the military, then did 4 years at college paying rent. I have just returned home and found it an opportunity to live rent free for a little.
Very little is needed to make a happy life; it is all within yourself, in your way of thinking. -Marcus Aurelius
2m2037
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Re: Do I deserve it?

Post by 2m2037 »

It sounds like you don't currently like your present car and want to switch it for something else. You don't need to spend 35K to do this swap to something you like. You might be able to find something lightly used for much less. To provide a bit more perspective, a brand new car can be had for under 20K.

Find out what you want out of the 35K car you're considering and see if you can replicate it with a cheaper option? Is it the new tech that comes with a late model vehicle? Looks? Reliability? Leather interior? Sunroof?
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flamesabers
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Re: Do I deserve it?

Post by flamesabers »

Marjimmy wrote:I guess it should be noted that I left home at 17, spent 4 years in the military, then did 4 years at college paying rent. I have just returned home and found it an opportunity to live rent free for a little.
OP,

I've been in a somewhat similar situation as you. I joined the army at 19, finished my active duty contract at 23 and came home to my mom's house. Like you I had a used car and a decent amount of my money in my vanguard account. Once I readjusted to civilian life, one of my top priorities was getting my own place. The thought of buying a new car never crossed my mind. Even though nobody likes having to pay rent or a mortgage, having your own place I think will be a very satisfying experience for you, especially if you had your share of bad roommates during your time in the military.

Until you get your own place and readjust your finances accordingly, I recommend you set aside your dream of buying a new car.
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HomerJ
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Re: Do I deserve it?

Post by HomerJ »

Marjimmy wrote:Hello All, hope everyone had a nice 3 day weekend.

Little background about me. 25, single no kids, never bought a new car, (drive an 06 ford taurus 135k miles) recent graduate, no debt (living at home), 6 months emergency funds, and roughly 100k in vanguard.

Since graduating I landed a job which pays salaries in the mid 60's. Eventually I want to buy a new car and replace the taurus right now. But what stops me is thinking that if I buy a new car now for 35k, if I were to have invested that money instead 30 years down the road at 8% growth......I'm actually paying well over 100k for the car.

When do you justify new purchases for yourself? Do I deserve a new car for myself?
Why not buy a new car for $20k? The 2017 Honda Civic is a LOT nicer than a 06 Taurus. Or if you want something nicer than a Civic, maybe something else used-car with 40,000 miles on it.

I don't think you need to jump straight to a $35k car as your first new car. Plus, you're still living at home, so you really should wait until you have your own place and a better idea of what you can afford.
bluebolt
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Re: Do I deserve it?

Post by bluebolt »

DW and I are in our 40s and well into the 2 comma club. On our way to FI even if we never contribute another penny.
We literally just bought the first new car of our lives a few days ago.

So, I would say (as others have) that you would be much better served by buying a much less expensive used car to replace your current vehicle.

I'd also like to discuss the use of the word "deserve." My 2 bit observation is that the kind of people who discuss whether they deserve something or say they bought something because they deserve it are the opposite of the BH mentality. BHers ask if they need it and ask if they can afford it. For non-necessities, they make sure all of their ducks are in a row before they consider the purchase, and then they think about it some more. At no point is their decision based on being deserving.
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Re: Do I deserve it?

Post by bottlecap »

Marjimmy wrote:I guess it should be noted that I left home at 17, spent 4 years in the military, then did 4 years at college paying rent. I have just returned home and found it an opportunity to live rent free for a little.
Thank you for your service and congratulations on transitioning back into civilian life, going back to school, and landing a decent job. I know from friends and children of friends that that's not always a small task when coming out of active duty.

There's something to be said for living rent free for a little while to save up some funds, but I still wouldn't spend that "benefit" on a new vehicle. I'd sit down and figure out what my goals were and plan how to best achieve them. Living at home "rent-free" for some time might be a part of that plan.

And maybe those plans include a different vehicle (new or not), and maybe they don't. But unless you're a craven consumer, a new or different car at age 25 is not going to a) give you more than fleeting happiness or b) advance your real goals in life.

If a new car is the most important thing to you, then get one you can afford, whatever that might be.

However, know that a new car is just rarely worth it, especially when you're young and starting out financially. Will it ruin you? Unlikely. But will the joy/benefit outweigh the expense? Very unlikely. It's just a vehicle, it will be an old car in 6 months, and isn't going to change anything important in your life.

Unless you can buy a new car without putting yourself behind on your other, presumably more important, goals, my advice would be to hold off and reevaluate once you've gotten closer to some of those other goals.

Whatever you decide, I wish you luck.

JT
Dottie57
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Re: Do I deserve it? [A new car]

Post by Dottie57 »

No one "deserves" a car. You can either afford it or not. I waited about 15 years before buying anything more than basic.
First new car was a honda civic which rusted like crazy. Next was was a chevy nova. I was so happy with the nova because it had a/c!

Spend your money well. A new fancier car is in your future. Probably not right now.
Exodus
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Re: Do I deserve it? [A new car]

Post by Exodus »

I think more than do you deserve a new car and thinking about how much you are losing in investments by buying a $35K depreciating asset is what are you giving up material wise to get this new car. It's great you have $100K, but you are still living with your parents. Do you really want to be that guy with a nice car, but still lives with their parents. I have a few friends with BMW M4s that still live with their parents when they could have moved out or done something better with the money. I think you are giving up too much to have a status symbol. That is just my honest opinion.

Do you deserve it though? That can be very subjective and only you can decide if you "deserve" it.

If you are comparing what you drive to what your friend's drive, try and take a step back and realize that maybe having a fancy car isn't as great as you imagine.

-B
The outcome is the perspective...
Gill
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Re: Do I deserve it? [A new car]

Post by Gill »

In November 2014, when you were 23, you were inquiring about buying a Rolex. My Dad used to love the expression, "Don't let the money burn a hole in your pocket". You need to curtail your tastes and wants if you hope to have a comfortable future. It is a huge mistake to think you deserve these luxuries.
Gill
Cost basis is redundant. One has a basis in an investment | One advises and gives advice | One should follow the principle of investing one's principal
MutualEdge
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Re: Do I deserve it? [A new car]

Post by MutualEdge »

What's wrong with your current car? Kudos on the mileage. I personally would drive it 'till it dies and then decide about the car.

Taking into account your age, savings (impressive!), income, and living-status, you could definitely purchase a car as long as you keep putting money away for retirement. I would compare new vs. used once you settle on a make and model; you might check out KBB, Edmunds, and Consumer Reports to help guide you. As a previous poster mentioned, 35k is high. Around 20k sounds more reasonable. You might consider saving for it while living at home and paying cash-just a personal preference as I'm debt adverse for most things.

Hondas and Toyotas are great brands as mentioned. When I bought my car, I ended up going with Nissan because the price point was much cheaper vs. a similar car with Honda or Toyota. I've had it for 7 years; no problems yet.

Good luck!
multiham
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Re: Do I deserve it? [A new car]

Post by multiham »

Many years ago, I bought a $20,000 car when I was making $40,000. I'm a car guy and don't view a car simply as a means of getting from point A to point B. I truly loved that car and was having no problem paying off the car loan. Than I met my future wife, decided to get married, and wanted to save for a house. At that point, I regretted buying the car as my priorities had changed and I was not able to save as much for the house as I wanted.

Here is the question you need to ask yourself. Is the car at the top of your priority list? Is there anything that may take its place and make you disappointed that you spent $35K on the car? You are not currently in an "AND" situation where you can buy the car "AND" save a substantial amount for other things. Only you know the answer to this question. Before you buy it, make sure you really want the car more than anything else.
mortfree
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Re: Do I deserve it? [A new car]

Post by mortfree »

This will echo others comments.

Get a new car; just not a $35k car (this includes new, used, certified).

maybe you can find a used/certified car that was $35k MSRP but is now discounted since it is not brand new and has depreciated.

if you are a recent graduate, car manufacturers will give you $500 rebate (Honda) towards a new vehicle so look into that.

Kind of like how people have starter homes, you may want to find a starter vehicle. Not sure what you are looking at for $35k but I bet you can find something that doesn't cost as much. civics, corolla, cruze, mazda3, crosstrek, RAV4, CRV to name a few...

I did the live at home with parents thing and saved up a lot of cash; making similar to you at the time. I had two cars (20k and 6k), bought the latest home theater stuff; I also accumulated tools, etc as I wanted to be a home owner... I was saving for a downpayment, paying off student loans (and the 2 cars), investing, and saving for retirement too. My parents should have kicked me out sooner, but they didn't.

You need to prioritize to get your finances in order: home, retirement, savings, auto... and figure out how long you plan to stay at home with your parents.

good luck
arsenalfan
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Re: Do I deserve it? [A new car]

Post by arsenalfan »

I believe you had a Rolex thread previously?
It seems you have some cash burning a hole in your pocket.
I had the same issues (and still do whenever the surplus cash account gets above a certain amount).
Get an Investment Policy Statement, allocate your funds appropriately including leftovers at the end of the month to avoid this.
Have a budget fixed that permits some "fun money" - and save that up towards a $35k car or a $5k watch, if you want to - but you may need a system other than asking BH forums for advice on avoiding impulse purchases.
Daryl
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Re: Do I deserve it? [A new car]

Post by Daryl »

When I was your age, I bought a new compact SUV. It was over 25% of my net worth and over 33% of my gross annual salary. I still drive that car each day. If I had to do it all over again, I wouldn't change a thing.
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