what is this

[JeffreyLebowski]

Originally posted by: ironwing
Save your pennies for a car and pay cash. You'll know how much car you can afford by how much money you have in the bank. If you can't save enough to afford the car you want then you can't afford that car on time either. Debt sucks, even when taken on for a good reason, it still sucks.

That is bad advise.
Some people need a vehicle to get to and from work. Mass transit is not always an option, so what is that person supposed to do? Living the Dave Ramsey life is easy when you're paid more than the average American, and you get more money for speaking appearances and book deals, but us common folk have to live off of some debt. The only debt I carry is my mortgage and car payment. Everything else is paid with cash. Computer parts, TV's ect, there is no reason to finance such things with credit cards.
But housing and transportation are necessities for 90% of Americans.

To the OP's edit:
percentage wise, there's no magic number. Take into account your current bills that you pay, plus how much spreading around money you want for other entertainment or savings purposes.
Your profile says you are in NYC, so I would say don't bother with a car as you do have a huge mass transit system and a car will be more of a hinderance than anything when trying to get around. Plus, $80K doesn't go to far there.

Now if you are not in NYC and are in a lower cost of living area, I would say a $25-$30K car tops. You have to factor in insurance and maintenance costs. Plus, if you're making 80k and living in an apt, i think you don't want to have a very expensive car there as it will get door dinged and if you drop a ton of cash on a car you'll want it to look nice and little imperfections will bother you.
Get a cheaper car and look into buying a house.

 

[IronWing]

Originally posted by: JeffreyLebowski

Originally posted by: ironwing
Save your pennies for a car and pay cash. You'll know how much car you can afford by how much money you have in the bank. If you can't save enough to afford the car you want then you can't afford that car on time either. Debt sucks, even when taken on for a good reason, it still sucks.

That is bad advise.
Some people need a vehicle to get to and from work. Mass transit is not always an option, so what is that person supposed to do? Living the Dave Ramsey life is easy when you're paid more than the average American, and you get more money for speaking appearances and book deals, but us common folk have to live off of some debt. The only debt I carry is my mortgage and car payment. Everything else is paid with cash. Computer parts, TV's ect, there is no reason to finance such things with credit cards.
But housing and transportation are necessities for 90% of Americans.

The problem is that most cars lose value rapidly after purchase and being upside down on a car loan is a pretty much a given for the first couple years of the normal five year loan. Taking out such a loan in uncertain times might be fine or it might be a financial disaster if the borrower gets laid off or is asked to take a pay cut.

People who can't afford a car basically have to structure their lives around this reality, living in proximity to their work or transit. Being less well off is very inconvenient. I don't write that flippantly, when you have little money, everything becomes a pain in the butt. However, I don't consider somebody making $80k/year as being in that category.

Unless the OP is carrying other debts or obligations, earning $80k/year should allow the OP to very rapidly save enough money to buy a reliable used car using cash. Unless there is more to his economic picture, there is simply no reason to be looking at taking out a loan for a car.

 

[PricklyPete]

Originally posted by: rh71

Originally posted by: PricklyPete
Even so, if someone is making 80K a year...the time it takes to save up more than 30K is substantial based on an "average" person's consumption nationwide. Of course someone who spends nothing other than on his car could potentially save a lot more...but that is very, very rare.

Therein lies the problem. Too many people are in debt with monthly credit card charges and I would guess it isn't all for critical things. You have your mortgage/rent, utilities, & food. How much of that $80k does it cost? Ask yourself what fun stuff you spend on and how often. Sure, like you said, a lot of people have different priorities, but that doesn't mean you can't do it with just savings after a couple years. What do you think of these numbers?

$80k gross = $55k net - $25k living/expenses (pretty high estimate already)... annual amount left over $30k. Nice car within 2 years, paid. And still have some left over for entertainment during this. And yes, rainy day money is from all the time you hadn't started the car fund. The point is if you spend wisely and don't waste it on weekly/monthly crap (which undoubtedly a lot of people buy, I'm guilty now too), you can make it work and not be constrained to a specific ceiling for a car given an annual salary figure. I believe all it takes is patience if you have a goal in mind. Instead it seems everyone wants things now and won't work toward it. A guy making $50k can get the same car in a bit more time. That's why I don't believe in this salary = specific car thing.

It just isn't financially responsible.

Neither are their current expenditures, then. I can't stand the phrase "above your means". If you have a decent place to live, food for a family (dual income), some change in the bank for 6-12 months, you are living fine, not "above your means" just because your new car (which incidentally lasts 10+ years) is a big portion of a 1-yr salary.

I wouldn't be recommending they spend there "disposable" income on other frivolous items either. At 80K a year, I wouldn't recommend spending money on an expensive vehicle or a frivolous expenditures. I'm not disagreeing that if a car is a high priority for someone...they couldn't go buy an M3 if they wanted to on 80K...but I still maintain it is a poor financial decision even if you have savings attributed to someone making 80K a year. Obviously if the person had inherited millions of dollars...then we're talking about a whole different discussion. But purely on the basis of someone making 80K, assuming average savings and living expenses...I still don't think you should be buying more than a $30K car if you intend on being financially responsible.