If I make 50k a year, is 16k too much to spend on a car?
I recently graduated from college and got a job as a web developer, making 50k a year. I have about 12k in student loan debt, and I'm still living at home with my parents. I'm currently driving a 2005 Chrystler town and country (Van) with 200,000 miles on it, and I have been pouring thousands of dollars into it for maintenance. Would it be wise to buy another car now? I'm looking into getting a 2013 Honda Accord, which costs about 16k. Is this too much to spend on a car based on my salary?
(Hour commute to work every morning)
http://m.autotrader.com/cars-for-sale/vehicledetails.xhtml?listingId=411343503&zip=43016&endYear=2013&pageLayout=list&sortBy=distanceASC&startYear=2013&listingTypes=used&transmissionCodes=AUT&searchRadius=25&mmt=%5BHONDA%5BACCORD%5B%5D%5D%5B%5D%5D
Sdsdds
Hi That sounds like a good investment however if extended warranty is available pay for it as it will be worth it.
If you are making 50K a year and living at your parent's house, you can afford a 16K car. You should be able to pay cash for it.
32% of salary is about the max you should spend - it repair costs are equal to or close to a monthly pmt on a newer car, then it makes no sens to keep repairing
You have $12,000 in student loans. Pay those off by Feb 2016 (four months from now). It's $3,000 per month and the loan is gone.
I agree with Love big words… Pay off the student loans. Then put away at least $5k for a new vehicle. Finance the rest of the new car and pay it off as quickly as possible with extra payments and larger payments.
That way you can get the credit score boosts, save money on interest, and have no debt.
It would be too much for me. I would only buy what I could pre-save for. And I would be sure to pay off the student loan in full, first. When I first stared working, I got a used car for one month's pay, but only because I had no debt. If you want to save more months for a better car, that's your choice. The thing about paying cash is that you will have a good appreciation for how long it takes to save up the money.
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