Based on the 20 4 10 rule I can't afford a car even of I paid cash because all of my quotes were 20% of my income for insurance due to medical risk (clean driving record)
I live in Malaysia. A Honda Civic starts at 29k USD, and earning 30k annual household income put you in the top 20 percentile of earners. It's normal for people to spend up to 1-2 year gross income or more for a car, taking out a 9 year loan. I almost did that 12 years ago, but I got smart(er) and bought something closer to 1 year income, and paid it off in 3 years. It was a tough 3 year, and I still have that car as a spare car.
Having no car payment is one of the best feeling ever. I make over 100k a year, but still drive a 2014 Honda Civic. As long it gets me from point A to point B then I'm good.
I love talking to suburban moms about their car choices. They say all they want is something that gets them from A to B. And then they get a 7 seat land yacht for the cost of a house.
Oh, it's the same with new drivers. I took my buddy and his 16yr old to look at a car for her (he knows nothing about them so I was brought in as their "expert" ). He wanted something for her that was reliable and had cheap insurance, then asked if a 2018 nissan altima was "okay".
Its always the parents with 1 kid that feel they need a 7 seater suv or van. As someone with 2 kids And 3 nieces i have managed with a sedan just fine specially once they got older.
So basically if you work your way up to a $50,000 salary (which can take 5-10 years) you finally have enough to finance a 2015 Prius with 100k miles. What a time to be alive.
5 to 10 years? If you're not starting at over $40k then you're doing it wrong. I know a guy who just started a job running a forklift. He's starting at $50k with no experience.
Wages just haven't kept up with car prices. $1000 car payment is insane. That's close to a mortgage or rent for something that's going to depreciate 50% over the next 5-10 years. Even the used car market is ridiculous.
Unless you're talking about the last three years, this is a lie. Middle class wages have outpaced inflation for about 75 years, and car prices have lagged inflation.
The range in 20% to 35% in vehicle expense was very useful. Sometimes, a household lives on a single salary, and two vehicles are needed, having a min and max benchmark really helped
@@RGE_Music private market is just as inflated. people selling their cars sees what dealerships are selling for and prices them similarly. A used car that you could have gotten for $5k a couple years ago is now going for $10k+
@@RGE_Music That works when you have rich family and friends. If you grew up poor, your surroundings are poor, so they're also scavenging cheap, reliable cars.
Almost 60 yrs old here, great advice. I try to buy second hand as much as possible. But with a 25% limit methodology....not much options for a guy who likes sedans with comfy seats for my skinny butt.
I bought a Honda Civic (all cash) 21 years ago (synthetic oil, regular maintenance and easy driving is the secret to its longevity) and, at 67, think it might be the last car I ever purchase. For the first 19 years of ownership I was making ‘car payments’ into my investment accounts. I retired two years ago and wake up every day realizing how wonderful it is to be debt free. A reliable car, taken care of, can be a wonderful financial tool. And so is this channel. Believe me, you’ll be old one day and you’ll be glad for the advice offered here.
My new car (leased) costs about 27k new. Got it for 18.7k Payed 8k upfront, will pay 130 each month for 4 years. Can buy it afterwards for another 7k. Which adds up to about 22k. Car is almost brand new also
I’m trying to buy a truck and anything under 15 years old with less than 150k miles is around 12-20 grand. By this videos logic there isn’t a single running 4x4 truck I could afford as a college student
I bought my 2007 Honda Accord 2-door coupe in 2013 with cash (my biggest purchase during my my first job out of college). The previous owner took great care of it and I absolutely (and still) love the car! It’s helped us through some really difficult times, but also shared with us the most amazing memories! Our two toddlers don’t ride it much anymore because the lack of backseat space. I make 300k+ now, and yes the thought of buying a 100k+ “luxury” vehicle crossed my mind multiple times, but my wife and I would drive our beautifully kept red Accord for as long as it allows us!
That is probably one of the most reliable and easy/cheap to maintain cars ever built. There's a guy who hit 1 million miles in one with the original motor recently.
Thanks for a great video. Totally agree on buying a used car. Buying a 3-5 year old vehicle is the best value for your dollar. Im not a fan of financing, but I if I did, I would put down a larger deposit to really minimise the depreciation / resale loss at the time of changing. Some companies like Hyundai give longer warranties so owners can be protected on older cars for longer.
This makes sense if you only use a car as a means of getting from A to B and don't consider cars your hobby or something you're enthusiastic about. Because if you do then a large part of your "fun" money will also go towards your car(s), whereas other people would put the same money into going out clubbing, having frequent vacations, playing golf, drinking at the bar every other night, etc.
I work in auto finance and it is INSANE how often I see applications where people are looking to finance a car with a payment bigger than their mortgage. Cars are depreciating assets people, and they have never been more expensive then they are right now. That car loan debt has no upsides or chance for return on investment. You are literally throwing your money away when you decide to finance that $80K Silverado with all the options at 84 months. Some people have the disposable income to throw money out the window like that but 95% of people just want a cool truck and are willing to stretch their budget to get it, which is an incredibly stupid move. I personally could afford to finance a vehicle like that---but I absolutely never would. The last car I bought was used, I financed $14K, over 48 months, I paid it off early and I am still driving it. It's 10 years old. If you can avoid financing a car in today's market, by ALL MEANS do so. It is an absolutely terrible time to finance any vehicle.
What about option to buy Electric car? For example in Germany I bought financing car 1,97% per year. (Cheap money), in 6 months will get a grant for this car, in 1 year I will sell this car with the minimum loses, basically cost of having this car during the year will be around 3k. That is cheaper then rent a car or leasing.
These people are probably patting themselves in the back thinking it's pretty great they were able to "afford" this "great" car they wanted. That they could fit the payments in their budget (paycheck). Did not remotely estimate how much money went down the drain once lease is over. Then they need a new one and wonder why they never have money to set aside for retirement. At least a mortage you keep equity.
My thoughts exactly. I wouldn't buy a car if I can't pay it off in 4 years. Also I won't pay more than 1000 a month. For me, buying a second property is absolutely more important than impressing my friends.
Getting a brand new car was the biggest financial mistake I had made in several years. Getting rid of it and getting into something cheaper was the best decision at the end of the day. One lesson that I learned is that cars all essentially serve the same purpose (for most people), getting you from point A to point B. IMO the biggest reason that people get expensive cars is for the vanity of it.
Some new cars are better choices than used cars. In particular, some models of Toyota. I bought a new 4Runner and drove it for 2 years then sold it for $2k less than I bought it for. So less than $85/month basically, and every single piece of that car was covered under a full warranty the entire time I drove it. Most cars don’t hold their value like that, but if you’re smart you can make out on a new car.
Used car market is so messed up, that there are some brand new car options that make sense. You’re getting maximum warranty benefit and that can go a long way.
I do think it’s very funny that for the past 70 years we’ve prioritized infrastructure that makes not owning a car extremely inconvenient and then halfway through that infrastructure boom we ended up with an economic ecosystem where a significant and growing portion of the population can’t even afford to purchase a car without going into debt on a depreciating liability
All by design, G. Step one, get them in a position where they need cars, step two, raise prices on cars. What are you going to do, not have a car? See step 1.
All the government wants is worker bees. Put you in debt so you can never stop working. You will soon not own anything and your whole existence is cloud based payments, forever.
Vehicles have always been my hobby, and naturally I like the cool ones. As such I save up and put huge down-payments on them so I can have something nice, but still be in a good spot financially.
A corolla in 1980 cost like 5k to 7k if I googled that right. Today they're like 30k. Wages have not quadrupled to 6x'd to match. Yes, 90% of people probably *should* be driving beaters.
I had no financial education at all growing up, and absolutely love your content! I just accepted my first job and have been binge watching all your stuff to help, and it has helped me SOOOOOO much. Thank you!
Listen to Dave Ramsey as well. His financial teachings will set you up for long term success by being debt free for life and make proper investments to build wealth.
@@pewpewtactical5288 Dave Ramsey is good but some of his recommendations can sometimes be very old school. I recommend also watching him but make certain you sprinkle in some diversity to hear the pros and cons of other ideas and approaches to financial success.
I somewhat did the 10% rule without knowing. I made 42k last year and got a 2000 camry for 2.5k and put 2k in repairs. It has 185k miles and runs great
It all comes down to not having to keep up with the Joneses... I am currently financing my car, but I made sure to not only buy a used car at the optimal point of the depreciation curve, but also one that I can easily afford (i.e.
I’m in car sales and I do have to say . Good luck if you use this for shopping. Even at a franchise dealership during this time finding a $14,000 is very hard. With inflation and most manufacturers behind still from Covid, used car prices are high . So a $14k car will either cost more money long term to maintain also if the mileage is high then your bank is going to give you a higher rate they don’t care if your an 800 score they care about the year and mileage and resale value. So if your trying to find a budget car your car payment may be lower on a new car for the same term. To the buyers it make way more sense to buy something that’s newer and less interest rate .
Thats why people shouldn’t finance cars at all. Someone who make 50k a year after tax shouldn’t finance. Just save up and buy the car at around 20k. You get almost everything which isn’t older then 4 years and hasn’t more then 70k miles on it. But that what you people at car dealerships wouldn’t sugguest the average joe ever.
@@tailedbeast7829 if someone can live rent/mortgage free it would be easier to do to save $20k but in today’s economy it’s hard to just save up money like that.
@@tailedbeast7829 Have you looked? $20k won't even get you into a 4-year-old Civic right now, let alone "almost everything"... prices are sky high. Almost any four-year-old used car is priced within $5k of it's original MSRP. On the plus side, mileages are generally LOW due to the pandemic. I bought my 2006 car for $10K in 2014.. and the same car (with the same mileage) would command every bit of that today.
Not hard to do at all. Just buy an older car that has good reliability (like a Toyota), do proper maintenance, and your own repairs when possible. Buy from a private seller, so you're not throwing money away at a dealer. In fact you really never need to spend even as much as 14k. People significantly overspend on cars. Quit caring what your neighbors think.
My brother in Christ, have you shopped for cars lately? A $14,000 car is over ten years and 100,000 miles. A three year old car sells for roughly the same as a new one.
Yes, that’s the nature of life. Being responsible financially often means not living beyond your means. If you can only afford a 14,000 car then your shopping for cars in that budget regardless of what they look like or how many miles are on them
@@Sarahsmydogbut what good is it to “shop responsibly” if the end result is a car that will cost you more to maintain than just buying a little better car at a higher price? Perfect example, had a paid off car but it needed $2k in repairs if I did all the work myself or $5k at a shop. We bought a car instead that needed nothing for years.
@@ericdavis7523 bro. It cost 2k to repair your car and you’re saying that somehow spending 14k or more is smarter? This is why Americans are in such financial trouble. You’re spending 7x the cost of the repair to avoid spending money on the repair, make it make sense.
@@Sarahsmydog I don't think the math is clear to you. I will give you an example on my skin: I bought a car (Mits Lancer in 2009) paying it 4,000. One week after, I had to pay 1,400 dollars in repair (=5,400 total). In the next 6 years, I paid another 5,000 here and there (anotehr 1,600, then 800, then 1,000 etc). This put the cost of that thing to over 10,000 dollars. On top of this, the car was already not fuel efficient, and right now I pay 35 dollars a week in gas simply to do 20 minutes ride to work (no highway). I calculated that I am spending roughly 1,600 dollars a year in gas. Now let's do the calculation: putting all together, I spent roughly 20,000 for a car that right now I cannot resell (carvana gave a 100$ to pick it up). If I am disonest, I will sell it for 1,000$. By the way, the car is to toss: I do not trust make it more road than I need to. And the insurance is not full-coverage (the cheapest I got at the time). So, no I would have loved to have bought a 20,000 car at the time (couldn't do it though) that had minimal problems (e.g., oil change) and pay that money in 4 years and eventually keep it for another 6. So, my car now, cost me 20,000 dollars and I have to toss it after 6 years. You do the math. Yes, money can be spent wisely, making some efforts and knowing where to spend. A car that cost 14,000 with 100,000 miles is not worth it! Ever.
I care far less about losing a car than I do my home... as such I didn't buy anywhere near the home mortgage brokers, realtors, etc, wanted me to buy. To me, $200k on a home was already alot - I want to be able to pay the payments using passive/guaranteed income for years to come if it came down to it. In contrast, let's say I'm sick... well... I don't need a car, I can sell one or both of them, recoup most or all what's owed on them, and be done with it easily... doing that with a house is more time consuming - and I have to move, which is a hassle in and of itself (and far more expensive than the beating I might take on a $70k car). Thankfully, the used car market is stupid and my cars are both worth more than what's owed ( in fact, my Volt is probably worth more than I paid for it ). I pay ~7% monthly for my mortgage (all costs included)... I pay nearly double that on car payments. To me, it's just a matter of outflow vs inflow, the distribution isn't terribly important. Considering most people in my income bracket are spending 20%+ of their monthly income on their mortgages and then another 10%+ on their auto loans, I have much more disposable income and more headroom.
@@looncraz the car market is going to flip really soon with rising interest rates. Your cars may not be worth much in a few months. I have been buying used cars (before this craze started) usually 3 yrs old and after the depreciation makes them cheaper. I currently own a BMW and Lexus, paid ~20K less for each than if they were new.
@@mikezerker6925 I usually buy cars a few years old precisely to skip the major depreciation. Bought my 2018 Volt for $18k in 2021, just as the market started going stupid... market rates for the car had already exceeded $20k but CarMax hadn't updated their pricing, making them the cheapest by a mile. Managed a 0% loan for that purchase, which shocked me... no extras or anything. I did buy a new 2019 Volvo XC90 T8 Inscription, but that was mostly forced by the high cost of (and lack of available) used models, the $7500 tax credit making it cheaper, and a few other factors that made going new the smarter choice. That was $1400/mo in payments for a few years :eek: I keep my cars until they fall apart or reach about 200k miles, sometimes a bit more, so I have a good 4~5 years before I really care about the used market, but both cars will be long paid off before that happens.
I learned my lesson the hard way…29 years old and currently on my fifth car. I financed cars for the passed 12 years and I regret it completely. I was always thinking about how cool I would look but decided to finally wake up and stop spending money on stuff that goes down in value. Switched from a BMW to a 2023 Camry that I got for 29k out the door. Couldn’t be happier and planning on keeping it for at least a decade.
Being more concerned about looking poor than actually being poor is one of the most common problems people have. Good on you for snapping out of it and turning things around.
2023 Camry Hype train! I got the XSE trim with a few upgrades to the package for 36.5k OTD, but it's my daily commuter and I plan to keep it for 15 years. To those criticizing him for buying new, the used market isn't exactly priced well for the reliable camry. Why would I save 1k on a 2022 Camry with 30k miles on it when I could buy new and do a proper drive train break-in, and know the vehicle maintenance from the start?
I'm still driving my mom's 2010 Lexus LS460L....runs like new...got all major repairs done under warranty...... my grandma just gave me her 2006 Lexus LX470 that clocked 190,000 on the odometer and it still runs like brand new.... don't think I'm buying anymore car.....
Car notes are insane now. My dad never paid more than $210 dollars on a car note, now the average is $700, not to mention the rise in interest rates. As long as buyers keep accepting them, they’re going to continue to rise.
these numbers are so wild basically most people cant even afford a decent old used car. at $40,000/year theres basically ZERO cars that you can own with a total monthly payment of $333 including insurance and maintenance. thats literally impossible
Yeah.. in 2021 I was earning $40k, bought a used 2018 Kia forte for 15 grand total (5 grand down) and I was paying 190 a month plus 90 for insurance, but now insurance raised to $160 a month so I'm already over your budget 😂 not saying that you won't be able to have this low payment now... And now I'm also afraid it may get stolen by those Kia boys 😂😂😂
@@americanboy1332 your insurance rate is insane, I'm paying $260 for 6 months on 2019 Mazda CX5 (Geico). If you do some shopping around for insurance, it will save you a lot of $$$.
Don’t buy a new car. I make good money and drive a 2003 Lexus Gs300 that I bought for $5,000 cash. Even at a 10% interest rate with 0% down and a 24mo schedule, that’s still only $230/mo plus insurance. My insurance on this vehicle is $46/mo
@@ryangriffith33in Canada a used Honda fit with 210000km goes for 10k. With that you’re taking on any potential issues and maintenance. A new car that you plan to keep for many years with regular upkeep can end up being much cheaper in the span of 6-8 years
@@haydentronnes9539 Not even close. 210,000km is barely broken in for a Honda or Toyota. I bought my car at 310,000km for $5,000. Have driven it for 2 years with maybe $600 in maintenance aside from oil changes.
I'm still driving my old 1999 Toyota Tacoma. 4 wheel drive, standard/manual shift, and basically analog. No power windows or anything. Pros: Easy to repair and it does have AC. Cons: Underpowered with only a 4-cylinder motor.
Unless you own a hauling business or own horses there's no need to have a big displacement pickup. Your Tacoma can do 99% of the activities a V8 full sized pickup can do and will last longer too.
Sometimes it's also about why you need the car for. We got a new car last year because we drive all around the US for work on a regular basis. It wasn't smart financially but the life improvement it created is worth it. Obviously it wasn't the financially smart thing to do and that's not what your channel is about, but I also wanted to express that sometimes when you buy a car you also buy much more and if you're willing to pay for it, it might also be worth it in some way.
He just speaks in general guidelines, and it's not bad advice for the vast majority. I own my business, and bought a more expensive truck. It's my office, and I spend more hrs driving a week, then many work. I also spent more for a new venture that I can rent out trailers, actually paying for my trailers and truck payment. That doesn't include the tax incentives for businesses. Breaking down to that level is just not very feasible. At the end of the day, sometimes, a car can be your enjoyment. Some people go to the bar, the movies, or put that money into their vehicle.
@Steve Hope while I agree with everything you said it's apples and oranges to compare a vehicle bought for a business than a personal vehicle. They are two completely different propositions.
I'm going on 19 years with my 1997 bmw (paid $7000 cash in 2004). Lots of diy, but it still puts a smile on my face. Stay away from turbos, automatics, SUV's and staggered wheels and you are my kind of person.
Great video. Here's another tip. The first vehicle I leased was great! If you're able to stay under the mileage limit, maintain it properly, and keep it in great shape, you can make some $$. I bought the car for a sweet price, turned around and sold it for a handsome profit, and use that $ for the initial payment on the lease. Did the same with the second lease, and had enough to get my midlife-crisis car, used 1yr, and had it payed off in less that 3 years (had a 5-year finance). Drove it to the wheels where close to literally falling off. Junked it, added a little more $ for the next used car, paid-off in about the same amount of time and still driving it now. Not sure if it was luck or good planning, but it's worked for me!
I am a car enthusiast . A lot of my passion and ambition comes from the deep desire to own expensive sports cars. At the same time I live a very financially sound lifestyle with investing and saving. The key is balance when it comes to needs and wants. If you want to own expensive cars you need to make cuts in other areas. I do not buy expensive clothes, housing, go on vacation or have kids. I have had friends shocked at how much I pay in fixed car payments but their travel, childcare, and home cost far exceed my car cost. Its all about the bigger picture when it comes to how much you want or can spend on a car.
@@ROVA00 You could buy a Civic Si 7 gen easily, haha. I think driving certain inepensive cars can show having a good tastee too; I drove a 05 Mustang GT to the work once and my boss asked me "is it manual or automatic ?" On the other hand, my assistant manager drove his AT WRX to work and evey colleague and male customers were teasing at him.
@@YuShawStang yeah but a civic SI just wouldn’t do it for me anymore. My last car was a built 2006 STI and it would have to be an upgrade for me to consider spending much over $40k :-( sad times
@@YuShawStang not with the markups, no. But at $43k I think it’s a fantastic value. The type R is a track weapon and handle like fighter jets. Has four doors and enough cargo space to make it a livable daily that I could take on a trip. I can’t think of many cars for the price that have all of that going for it while also having Honda reliability. The Golf R is kind of close but I’ve driven them and they are a bit bland and VW has terrible reliability after the warranty period ends.
It’s tough because the 35% rule and the 10% rule equate to very different cars you can buy too. I got a car right out of school that’s total worth was nearly half my starting income but the monthly payment was only about 11 or 12% and at that time still lived with my parents and could afford a payment like that since I didn’t have any massive other expenses. Could I have gotten a way cheaper car? Absolutely. But looking back I’m so happy because I got a car I loved, while it was pricey I could still afford it, and 4 years later the car is paid off and I should continue to have reliable transportation and a car I’m very happy with for a minimum of 7 or 8 more years hopefully. It’s hard to follow a specific rule when situations always very so drastically person to person
You're situation is different because you didn't have to pay for rent or a mortgage which is the biggest monthly expense for the vast majority of people. It still wasn't a good idea, but it is far more manageable.
@@moonlit85I’m 20 and want to start investing. I’m thinking of financing a car and investing at the same time to accumulate more profit than the total that there is to pay off.
@@Deimian676Living with your parents in your 20s is extremely common, I’d argue people in their early 20s and even maybe mid 20s living on their own (this includes living without a roommate) are the outliers.
Sadly, many car manufacturers are not making cars for the average income earner. Following the 25% guideline, a salary of 50k puts you in the 12.5k car price. The cheapest car in the market is the 2022 Chevy Spark at 13.6k
@@seed.planted That's where the hazards of being post-warranty, questionable reliability, high mileage, electronics issues whether it's sensors or infotainment, etc can all easily turn into big repair bills. They're cheap because either the car's old, unreliable, high mileage, or some combo of the three.
@@Eibarwoman that’s not really true. a 4 year old car with 40-50k miles will not be giving you any problems (let alone expansive ones) for a while, unless you buy a POS car. Cars these days will rarely have problems before 100k miles. This is especially true if you research brand reliability and stick with tried and true Honda/acura, Toyota/Lexus. The only scenario where I would buy a brand new car is if I’m making over $200k/year and if it’s a sports car that is more likely to be abused. My Mercedes c-class was worth $53k when new. I bought it when it was 4 years old and had 54k miles on it for $19k. It looked and even smelled basically brand new and 50k miles and 4 years later, the only thing I’ve had to do is regular maintenance and replace the thermostat housing.
@@ROVA00 The problem is the depreciation from 20K to the affordable to the masses 12K under the guidelines suddenly moves from 4 year old vehicles to a 10 year old vehicle. The market's not exactly behaving rationally and the electronics/infotainment are the least reliable aspect of newer cars.
I love UA-cam recommendations. This guy helped me to realize how poor I am and my country is. By this logic no employee can buy a new car in my country, it's fascinating. What's more fascinating is, at least for now, we have to pay more tax than the actual price of car, even for the cheapest models. Gotta love being a Turkish citizen.
This all worked pretty well until the past few years. The average price of a new car is something like $47k. So the usual answer to getting around high new car prices is to buy used. Well used cars aren't cheap like they used to be. I keep waiting for a halfway decent car that is 3-5 years old to fall within my budget and it isn't happening. Thankfully, I have a very reliable 12-year old Acura and I can try and wait this out.
Happened to me pre-pandemic when I bought a truck. I was looking at 2-3 year old ones on the lot that were only listed about 3-5k lower than the new models and they had an average of maybe 50-60k miles on them. When you buy used you usually don't get any of the dealer benefits so when I pulled the trigger I got a bunch of GM cash, money for having good credit, some other 'sales marathon' thing and spent less than $1k more on a new truck with 7 miles on it than a used with mileage already on it. The dealer incentives kinda ruin that "buy 2-3 year old vehicle" rule sometimes.
@@RossGoneRogue I have literally seen the used version (30k-45k miles) of a car I was looking at for the same price as it is new within a two hour drive. When I bought my Acura in 2013, it was 2 years old with 18k miles and it was $13k off of the MSRP price.
Well done video. I am in the car business and work for a high end store and it amazes me how many people will come in and pay a crazy amount of their income on a vehicle. I even had a couple in their 50s that wanted to buy a house and were told to lower their car payments. When I suggested the nice low miles Honda we just took on trade, the wife said she wouldn't drive "that" and instead she wanted the brand new luxury car that was increasing the current car payment.
I’m a Realtor and have seen way too many people turned down on a loan because of car debt. They are short sighted and hopefully won’t end up like your fifty year old couple. No house and a flashy car.
Thanks for the informative video i’m just getting into buying my first car and few days ago i decided not to buy a car that’ll keep me shackled in debt just to impress people who don’t care, and i would like to add that people should look for reliable well known brands with cheap car parts because people can get fooled easily into buying unreliable cheap cars that will be a nightmare for them it would’ve been better if they bought that expensive car they wanted
I have a 20 year old Mercedes W203 that I bought used, 5 years ago. Everyone tells me that I spent a lot in repairs, but (consider chilean context), annual tax is cheaper, I don't pay any credit, I spent a high amount in repairs and maintenance and the car still runs sweet, but it will be much cheaper than buying a new one for the nexrt 4 years. When this one is dead I'll surely follow this advice :) Thanks!!
Old 1995 VW station wagon here. Bought for about $350. In the last 5 years of ownership, I've replaced a crankshaft sensor and a door handle for a total of about $15. You could complain that the gas mileage isn't great, it's not as safe as modern cars and that it's not trendy, but on the other hand it's extremely reliable and gets wherever I need to go. :)
I’m 18 and I recently bought a 2016 Toyota Corolla my car payment is $310 a month over 48 months. I think I got a good deal I put 5k down and financed about $12500 with a warranty that covers basically everything. This is something I’m proud about and plan to drive this car for 10+ years.
@@heyohlaha7858 I think they are providing a reminder because toyota has been pushing the 10k mile oil change on their new vehicles. Which in some cases is way too long, especially if driving in city.
When I was 18, I bought a brand new car off the lot. It cost 100% of my annual income. I made the decision because I didn't want to deal with a hunk of junk that someone else had abused. Practically zero maintenance, and fuel efficient. I'm turning 30 next month and it remains the only car I've ever bought. It's been paid off for six years. It's one of the best decisions I've ever made.
What a comment. What did you eat? Did you live in the car? Are you understating your income because other people were paying your expenses when you were 18?
It’s interesting to see this numbers and put them in other markets’ perspective, for example here in Brazil following the 35% rule, only the 1% would be able to afford the officially cheapest new car sold in our market.
You'd have to be pretty damn upper middle class here in the US right now, minimum of a new car you can insure is realistically 25k+, everything else is either impossible to find or like with Kia, insurance companies either charge through the roof or won't accept them because they're easy to steal
@@Dbb27then what do you think the used car price will be when the Supply of used car dried up, smarty? 😂That is right, we are seeing the begining of it.
@@林振华-t4v well smarty. Used car prices have dropped and the inventory has increased. There are plenty of people that can afford a new car and trade theirs in every 2-4 years. Not everyone is broke. Also people age and can’t drive anymore as well and let their low mileage car go. I’m in the market and there’s plenty of cars available. Not sure what you are saying. People who don’t have assets and have to make a higher payment in order to buy a new car shouldn’t.
The other problem with getting a car that you can afford, which is usually a higher mileage, older car if you don't know how much it's gonna cost to fix it, I mean, at least with a newer when you have a warranty and you can save up for things, but if a fuel pump breaks the transmission engine brakes it's on you and that's thousands of dollars
Buy an old Toyota. The chance of most models having the transmission go out before 350k miles is low. There are some specific models that give out at exactly 350k miles but it'll take you awhile to get there from 150-200k.
Do yourself a favour, and do either of the following: 1. Buy a decent, safe, reliable, and cheap (under $10,000) car (e.g., Accord, Camry, Corolla, Civic) that is ~10 years old and run it till it’s dead. 2. Buy a moderately priced used car ($15,000) that doesn’t depreciate as fast (e.g., Japanese cars) and run it for 5 years and sell it for $7-10,000 afterwards. Currently driving a 2009 CRV that I bought for $6,000. It’s absolutely perfect. I could drive it for another 5 years if I wanted to but I will probably sell it in a year and get something newer like a 2012-15 4Runner
@@NPC10912 Just looked up a 2014 corolla and found one for 8k and 150,000 miles. My mother in law has a 07 corolla with over 300k miles and is still running. People are trying to justify their purchases and impress other people who couldnt give a damn about your financial security.
I bought a 2015 Honda Accord and paid in full. It was a sacrifice putting that much money away in savings but the freedom and peace I have knowing my car is fully paid for is priceless!
One thing that often gets overlooked is registration costs and insurance costs. Our current 2 cars (14 and 15 years old) cost only $60/month for registration and insurance. 2 cars that are just a few years old could easily costs 6X that.
Thank you for the validation. I unknowingly did this on my last car purchase (honestly just lucked out and didn't get over my head). 20-4-10 is a great rule! Great advice!
I am a resident of NYC, never needed a car now I have a child and I want to expand my footprint possibly to the suburbs. I own property, save judiciously and I just started shopping for a car and it’s INSANE…. LITERALLY a money pit wealth killer. Even used cars are so inflated now. Thank you for this great video. Super helpful !
Just buy a prius or something similar with Toyota Hybrid. You may spend about 20k for a good used one but it will hold its value good, has ridiculous MPG and has great reliability. Far away from a money pit 😉
As long as you get a good and reliable old family car there are some good options and also giving the primary maintenance yourself you save aton of money
I had that thinking in my 20s. It's the new generation that have finance on tap. When I was younger, people spent £500/1500 on a car, and that was it. Nowadays people think they need to spend £10,000+ for their first car.
Hey. Here in Brazil you pay 1.92% interest per month with a good credit score. If the car is used, the interest increases. It's brutal to live with an environment of high rates.
I have a 2012 Honda Fit. I bought it new in cash. I drive approximately 52 miles per day for work plus vacation mileages. I have 193,890K miles so far. It’s been a great vehicle. Praying it’ll drive until 400K miles!!
Best financial advice I ever received from my father regarding car buying-- 1-save enough to pay cash. 2-if you must finance - nothing more than 36 months. If you finance longer than 36 months, you’re buying a car you can’t afford. Retired 18 months ago and still drive the SUV I paid cash for 23 years ago.
Congratulations. Do you want a star on your fridge for your effort? Did you live and love life to the fullest and are you happy? If so, you did it right.
Awesome video! Lots of great info. Its just amazing how many people get sucked into buying a vehicle they cant really afford because they want what everyone else has or are easily persuaded by the sales person. Nobody wants to be patient and put in the time and work to afford something comfortably. They have to have it right now. And you should definitely have your finances figured out so you know exactly what you can afford, length of term, and monthly payments, insurance, etc before you set foot on a dealership. Otherwise those sales people will shake you dry! Give yourself some wiggle room in case extra unexpected costs come up too. If you figure you can afford max a $25,000 car, start looking at cars that are around $20,000. You may find something you like that is less than the max you were willing to spend and be much happier about your purchase in the long run. Plus there are other things to consider like extended warranties on a used vehicle for instance. Things like that which may not cross your mind when you are budgeting for your car. So a little wiggle room is wise!
Kinda similar in Poland. People spend fortunes on cars. Down here it is called " you need to live on a certain level" or " you know it is all about the safety" :) When I lived back in the States I drove cheap used cars and people thought I'm kinda stupid. Now I live in Poland and keep driving cheap used cars and people think I'm kinda stupid :D So I guess as my grandma used to say - no matter how fast you spin, your a$$ is still behind you.
@Kevin Nobody told me I'm stupid. Is more like reading between the lines. Both friends and family think as I am kinda torturing myself not buying more fancy car. They do not get it, by doing so I have more days off at work at the time they get mobbed at work they hate :)
Good points. Thank you for speaking about opportunity cost. As a CPA, this is one of my huge pet peeves when people discuss making sound financial decisions. It might feel nice and dandy to own the car up front, but you are forgoing all that potential growth on the free market. I would also say that car loan term length is not really relevant. While yes, you will pay more interest on a depreciating asset, the benefit of more cash in your pocket from month to month is a superior position to be in. If you follow the rule of owning at least 20% of the car up front, the term is irrelevant. Just manage cashflow, and use excess cash to build wealth.
Your point on opportunity cost was some of the best advice I heard when I was buying a car last March. I went with that approach and it ended up saving me thousands. I watched many other advice videos at that time and nobody else mentioned that tactic.
Hi there! I’m not sure which vid of Humphrey’s you were referring, but in short would you say the answer should be buying? Since you mentioned that decided to buy one? Thanks!
The car you can afford is the one you can pay cash for. I saved up and bought my first car at age 23 in cash, it was new and $17k. Although I see that as a smart decision because I never had a payment, it would have been even more wise if I bought a cheaper used car.
If interest is low, then it’s not smart to buy in cash Having said that, I’m 25 and still buying the beat up car that my parents got for me in college.
That’s great man. I mean, it’s better than paying interest. And paying several thousands more. I mean sure you could’ve gotten something cheaper or even better, getting a $300 bike or something. But why dwell on it. I’m sure you’ve already made the 17k back by now.
i got my car for 0.99% rate and at the time my savings account was a 0.5% rate did make sense to cash a car when my rate was .049% essentially. now my savings rate is 3.25%. so it makes even less sense for my to pay off my car. so it depends on the situation of course
Bought my first car for 5500 cash off Craig’s list. Still driving it. 5x’d my income in that time. Commute in my company car. Don’t buy a nice car until you own the garage you’ll be parking it in.
My father recognized the car market was skyrocketing and so when he found a car for my first vehicle I outright bought it with my savings at 16 ( my own job) . Im 18 now and still run my 2007 Volvo. It was in an accident a few months ago (nothing major) and owning the vehicle I decided I didn't care enough to fix it. I 100% recommend any teenagers save save save and buy an older vehicle outright.
I had to buy a car after mine got totaled, after having just paid it off😭 Because it was the time when used cars were going for more than new cars it made sense for me to get a brand new car. I make just over 50K and my car payment is $326. Might be more than the rule suggestions but overall happy with my decision(plus the insurance payout was greater if I went with new than used🤷♂️)
I like this chat! My RAV4 2008 is in mint conditions. Paint is super glossy, miles on my car is at 300,000. Still running like a champ. Monthly payments: N/A Salary: $125,000
Someday we will get back to cars depreciating 20% in the first year, but many used cars still sell for near msrp (over in some cases) at 1 year old. Car market has been horrible for years.
Terrible time to buy a car but I did. My 03 Camry finally gave up on me. Got a 2023 corolla cross. Let's say I'm eating rice and salt for the next 5 years. Lol! Jk.. im just frugal and would rather use that money elsewhere. Payment of 435 a month. I know nothing about cars so I feel its better for me to get a newer car with warranty to take in if anything happens. Thanks Humphrey
So proud of my car purchase for the time I got it. $5k loan, at 7% for 36 months. I’m right at about 12 or 13 months in and only $1,000 left. I’ve been making over double payments and just got aggressive with it. Car runs great and I do all my own repairs. Hoping it can last me until I can pay cash for my truck in a couple years. Great video advice.
I just bought a 2020 atlas cross sport for $39k. Paid cash while maintaining a 9 month emergency fund. I struggled with the idea of spending so much with a salary of $118k/year but I really like the ride and plan to keep it for 7-10 years, so decided what’s the point of making money if I don’t spend it.
Bought a 2022 Honda HR-V just about a year ago. Went to a local credit union and got 1.9% APR for 5 year auto loan. Put $11,000 down and out the door price of car was $29,990. Payments are $335 a month with gap insurance. This was before the rate hikes, also why I wanted to buy last year even though car supply sucked. My salary before taxes is 45k. Most new cars are just too expensive now, used cars last year were a rip off. Wanting 2k less then a new car for a car with 50,000+ miles on it
Loved this video! I make a little over $200k in the Bay Area and recently sold my $68,000 Supra with ~$850ish/mo car payments for a used 2022 RAV4 Adventure. No more car payments since I payed it off in full using the proceeds from selling my car. I cut my insurance in half and now I'm saving over ~$2000/mo due insurance/gas/maintenance costs. Better to live under your means. Now I'm investing that extra $2000 every month.
I think buying a nice used car 3-5 years old is the way to go. I bought a 3 year old Hyundai sonata for 19k it has 19000 miles and was in great shape. Had it 6 years zero problems. Great car.
Not always. Used cars a few years old can still be a stones throw away to a new car cost and if it's a few years old...you got no warranty most likely. So if the transmission or engine goes out halfway through your loan term...hope you have a nice savings or you'll be taking out another loan.
@@professorfarnsworth6189 when I got my Hyundai sonata it was 3 years old, had 19000 miles, was in great condition, and they honored the 100, 000 mile warranty. I never had to use the warranty for anything. Obviously that's not always gonna be the case... But that was my experience.
with a chip shortage last year and a half it was impossible to buy a 3YR old car for a depreciated price. Used certified cars had MSRP price tags and most of the dealerships slapped 4-5K on top of new car price tag. Looks like lately market started to come back to normality though
I hear ya.. I had a *major* repair on my 2008 Honda Accord last year. That weekend I did some car shopping. The new Mazda CX.5 Turbo that I like had a $4K dealer markup! And, the *used* Civic and Accords that I liked? Civic was listed for $3,000 *more* than when it was new (4 years old w/ 57K miles), and the Accord was listed for $2,000 *more* * than when it was new (3 years old w/ 37K miles)!!
Yeh much of this video is accurate 4 years ago and NOT even close to accurate today, I’ve bought 4 cars2 used and 2 new in the last 18 months and only lost money on one and it was purchased used.
No. The market ain't back to normal. It's stopped shooting upward like crazy but now it's seemingly leveling out. Which is bad because it's leveling out at a really high place. What we need is a market crash, and I don't think that'll happen for a bit. If used car market stays steady in this area without dropping, people are gonna be fucked.
I really enjoyed the video. I find myself in a situation where I will be needing a new/used vehicle whenever my paid off one stops running. I’m finding one though my biggest concern is having enough seats. Lol😂. I need an 8 seat vehicle if I want to be able to fit my family in it. Looking at options, I really like the MPG hybrid Sienna, but the man in me also loves the Suburan. The price though is apples to oranges. In the end I will probably go for the Sienna as it has the 8 seats, fits the family, and doesn’t kill me in price. I like the ideas of rules of car buying and it is important. I have so many other needs to pay for in the large family dynamic. Thank you for sharing
I think a good rule of thumb is that you should be investing % of your income than your car payment. Always buy 3-5 year old cars that have predictable total cost of ownership (know your exit and how much it cost to own the car). Pay it off and apply the car payment to increase your investing/savings rate. Good video!
What has worked for me: Drive a POS as your daily commuter (getting to the Metro station parking lot in my case, or do quick grocery runs), and get a second more "confy" and safer car for your roadtrips and rolling with the family. Both were used cars and cost me less than buying 1 brand new. In most cases you should be able to buy them with cash or using minimum financing.
10% rule is one of the best I´ve heard about owning a car so far. I calculated my budget and turned out I could afford a car I want. I earn 45k a year and has always thought it was too much money owning a car. Turned out I was on 5-7% budget but 10% sounds good and fair. Never thought about thinking in % of your budget before.
@@chiefhere1968 I have many choices but the one thing I´m more into is the toyota corolla 2019/2020 executive model hybrid. Its almost like a new car and a car I can keep for 6-7 years+ with no problem. 184HP. Nothing super fancy but a reliable car for many years
Toyotas are a safe investment, and won't depreciate anywhere near as much as other makes. Sadly, dealers are well aware of this and jack up the prices of their artificially limited inventory.
@@catha86 wise choice brother. Hope it treats you right. :) I am prolly gonna risk it for the biscuit. Have my eyes set on a 2014 benz c300/350 but let's see if I actually go thru with it.
@@ps3beatswiiToyota lost all of my respect. 😡 They are purposely limiting production to make profit. Dealerships are marking up the prices so high, even for base trims
I have an Audi A4 and I will keep this for 10 years. The motor is already refined and it’s not the most fancy but I love it and I don’t want car payments. Yea I’ll pay a bit more in maintenance but it makes me happy so it’s fine. Plus I got it CPO used out the dealer with 5k miles for $40k 15%-20% depreciation on the dealers dime. Gotta be smart in life and just be happy!
Congrats on the 1 Mill!!! And honestly, this video put into perspective what I could afford at the moment or even in the future, I have been tossing around the idea of getting a newer car than the one I have. But your video shows that I have a bit more to do before I should start to really think about it, so thank you :)
I'd seen many 20s like me spending their youth, working 2 or 3 jobs making 50 60k a year to pour in those German cars in order to gain their status. I don't see the point of it and of course, its their lives they do what they want
Well, I drive an old 07 Camry that cost $6000 about 4 years ago, so yeah, you can find one. And my credit is pristine, so I could've financed an expensive car, but I'd rather have no monthly payments.
In toronto, the car insurance alone will be 400 per month. I own my car cash thankfully and it’s fairly new but I have friends paying $1300 for payments and insurance on Honda CRVs
Bought a 2017 SUV. Made monthly payments for about 4 months and then just paid it off in month 5. Still have the SUV and I still love it. 6.5 years, no payments. Not having any car payment and OWNING a car is the BEST thing ever. Buy what you want, pay it off and don’t be in a rush to get rid of it.
I bought a used Mitsubishi Space Star for less than 10k$ cash. Sure, sometimes I wish to have a car that's a bit flashier, but it gets me from A to B and was probably one of the more responsible decisions I made in my life. My anual gross salary is around 80k$, so theoretically I could maybe afford more, but to me it doesn't really make sense to spend that much on a car, because you will be stuck in traffic for the same amount of time (at least where I live).
I can't believe the amount of money people spend on cars. In 2017 I purchased a new truck which was 20% of my salary and paid it off in 3 years. I'm still driving it and plan to do so until the wheels fall off. The one thing I was always good with in life was driving beater cars. I really never had a car payment.
I bought a new car this year. It was 23,6% rule. Had to borrow part of it, but I'm planning to pay it back within an year. My monthly payment makes up 4,3% of monthly rule. Lithuania. Paid up front. Used.
Yeah I've really wanted a Toyota truck for the ability to haul but they were ~40k and couldn't really justify the larger payments or a longer loan term (even with 16k down payment), so I ended up buying a mazda cx-30 crossover for ~27k out the door (11k loan). Eventually when I get a house I'll just get an old beater truck to move stuff from a to b.
remember - if you have a neighbor or a friend who owns a truck, see if you can borrow it off of them for a day or two. Give them $100 cash, and promise to fill the tank. If you only rarely use it, this will absolutely be worth it to both you *and* your friend.
When I was making $40k in 2020, I bought my 2019 Nissan frontier for $18k and ended up with a $350/mo payment. It only had 1800 miles on it at the time so I think I have a good deal. I make six figures now but have kept the truck since then. My payment is still $350/mo and I pay it off on 3 years!! It runs like new because I take really good care of it so there's no reason to buy a new car, especially if the only reason to do so is to flex, My buddy bought a Tesla last year and I can't even imagine what the payment is on that.
Good video and can’t say I followed all the advice! One minor point though - the opportunity cost section should reflect the difference in the investment income vs the cost of financing. It can only make sense if the cost of financing is less than 10% in your example and should factor in that the financing is guaranteed while investment returns are not. This opportunity cost certainly looks different with current interest rates than it would have a couple of years ago.
We are still paying on our family car but the older two hatchbacks have been paid off for a long time. Its a good feeling when you get to no more loan. The third car, a 2014 Focus needed a bunch of work on the suspension due to rust, and other issues. I paid the $2700 because I examined the cost of a replacement and figured it will probably last a few more years. Having the third car has been a great luxury because it’s a spare and we can lend it out when family or friends need to borrow it.
Bought a car for $300. Had to fix it myself, now we are at 533,xxx miles. Now I'm thinking of buying a mitsubishi mirage. It starts off at 13,xxx and it is so good on gas. 43 mpg highway. I would only spend 60$ a month on gas. You giys should check it out
I always check IIHS crash test ratings before purchasing a vehicle. Cant get rich if you arent alive. Do yourself a favor and get that Mirage. Surely it's safer than the $300 beater you have now.
i wish i had this video before i got my car last year, as the 35% (rather than the 25%, i like my cars) and the 20-4-10 rules would've have kept me in good shape. i've broken the 35% rule, but have managed to keep within all of the 20-4-10, which i'm happy about. once a year has passed, i'll look to buy something outright that falls below 35%!
We're just about at 1M! Thanks for all the support and love 🙏 Make sure to checkout the Free 🐪 Hump Days Newsletter ➭ humpdays.substack.com
Love you this video helped my dad alot he's getting a new car soon
Based on the 20 4 10 rule I can't afford a car even of I paid cash because all of my quotes were 20% of my income for insurance due to medical risk (clean driving record)
Congrats on the 1 mill!! 🎉
Why not finance to 7 years but pay it off in 4? Gives you room if an emergency happens.
I live in Malaysia. A Honda Civic starts at 29k USD, and earning 30k annual household income put you in the top 20 percentile of earners. It's normal for people to spend up to 1-2 year gross income or more for a car, taking out a 9 year loan. I almost did that 12 years ago, but I got smart(er) and bought something closer to 1 year income, and paid it off in 3 years. It was a tough 3 year, and I still have that car as a spare car.
Having no car payment is one of the best feeling ever. I make over 100k a year, but still drive a 2014 Honda Civic. As long it gets me from point A to point B then I'm good.
thats awesome.
Same, I drive a 2016 Corolla
Same here bro. I make 60 K a year, and have been driving my 2008 Honda Accord for 8 years now, even thoug i'm going to replace it soon.
That’s incredible considering people at make 30 drive benzes
@Xx XK9 live below your means, do that long enough, and eventually, the Benz will be considered a small purchase.
I love talking to suburban moms about their car choices. They say all they want is something that gets them from A to B. And then they get a 7 seat land yacht for the cost of a house.
I mean. It shouldn't cost that much. Even used with 100k miles being 30k it's crazy. I guess I need what they are smoking.
Oh, it's the same with new drivers. I took my buddy and his 16yr old to look at a car for her (he knows nothing about them so I was brought in as their "expert" ). He wanted something for her that was reliable and had cheap insurance, then asked if a 2018 nissan altima was "okay".
@@mgloriousone9823 lol a novice here, but is a Nissan Altima 2018 not good as a cheaper option? I really don’t know
Women always feel the need to save face before letting their true desires out.
Its always the parents with 1 kid that feel they need a 7 seater suv or van. As someone with 2 kids And 3 nieces i have managed with a sedan just fine specially once they got older.
So basically if you work your way up to a $50,000 salary (which can take 5-10 years) you finally have enough to finance a 2015 Prius with 100k miles. What a time to be alive.
If you not starting a job making 40k something wrong
I just got my first 30k a year job at 32. This video makes me wanna off myself
What do you do for work?
5 to 10 years? If you're not starting at over $40k then you're doing it wrong. I know a guy who just started a job running a forklift. He's starting at $50k with no experience.
@@Superb_Legend you would be supprised how little people are paid even for education required jobs
Paid my car off this month! So happy, hoping to keep for as long as I can with little to no trouble!
Wages just haven't kept up with car prices. $1000 car payment is insane. That's close to a mortgage or rent for something that's going to depreciate 50% over the next 5-10 years. Even the used car market is ridiculous.
Stop buying family cars that cost more than a sport car if you want the price to drop.
Have you priced a mortgage or rent recently? It’s almost 3k or more. Between rent and a car they are close to 4k a month
It's almost like closing down the economy for 2 years, printing tons of money, and implementing net zero policies are driving prices way up.
@@ickster23 Also massive tariffs and bad trade deals.
Unless you're talking about the last three years, this is a lie. Middle class wages have outpaced inflation for about 75 years, and car prices have lagged inflation.
The range in 20% to 35% in vehicle expense was very useful. Sometimes, a household lives on a single salary, and two vehicles are needed, having a min and max benchmark really helped
This is my situation. Guess we’ll replace one car and then the other once it’s paid off. Hopefully car 2 holds up during that time!
Does it apply to the full price of a vehicle or a yearly leasing cost?
Yeah but in europe, thats likely to be 40% if you wanna buy in the 3-5 year used range.
As a 19yo college student finding a car that’s 10% of my salary is basically impossible. Inflation and car markets are so fun!
buy private!
Buy a bike. Take the bus.
Don’t have a car in college. Live on campus or close to campus. Take bus and bike
@@RGE_Music private market is just as inflated. people selling their cars sees what dealerships are selling for and prices them similarly. A used car that you could have gotten for $5k a couple years ago is now going for $10k+
@@RGE_Music That works when you have rich family and friends. If you grew up poor, your surroundings are poor, so they're also scavenging cheap, reliable cars.
Almost 60 yrs old here, great advice. I try to buy second hand as much as possible. But with a 25% limit methodology....not much options for a guy who likes sedans with comfy seats for my skinny butt.
I bought a Honda Civic (all cash) 21 years ago (synthetic oil, regular maintenance and easy driving is the secret to its longevity) and, at 67, think it might be the last car I ever purchase. For the first 19 years of ownership I was making ‘car payments’ into my investment accounts. I retired two years ago and wake up every day realizing how wonderful it is to be debt free. A reliable car, taken care of, can be a wonderful financial tool. And so is this channel. Believe me, you’ll be old one day and you’ll be glad for the advice offered here.
⬆️Get in touch with me!❤
That's incredible 👍🏼 way to go!
Problem is that used car now a days are going for almost as much as the new ones, it looks like a terrible deal even if it is 2-3K cheaper.
My new car (leased) costs about 27k new. Got it for 18.7k
Payed 8k upfront, will pay 130 each month for 4 years. Can buy it afterwards for another 7k. Which adds up to about 22k. Car is almost brand new also
@@Chitario not sure i see the logic your paying the same price either way you lease or buy
I’m trying to buy a truck and anything under 15 years old with less than 150k miles is around 12-20 grand. By this videos logic there isn’t a single running 4x4 truck I could afford as a college student
@@kidamere2408the logic is if you don’t like it or it breaks down before the lease ends you can return that crap.
@@dudeman3186why would you need a 4x4 truck as a college student? He's talking about a-b cars which are low end used cheap cars 😂
I bought my 2007 Honda Accord 2-door coupe in 2013 with cash (my biggest purchase during my my first job out of college). The previous owner took great care of it and I absolutely (and still) love the car! It’s helped us through some really difficult times, but also shared with us the most amazing memories! Our two toddlers don’t ride it much anymore because the lack of backseat space. I make 300k+ now, and yes the thought of buying a 100k+ “luxury” vehicle crossed my mind multiple times, but my wife and I would drive our beautifully kept red Accord for as long as it allows us!
The 07 Accords are a beautiful car, I love modified cars and have always though the Accord was one of the best looking cheap cars out there.
That is probably one of the most reliable and easy/cheap to maintain cars ever built. There's a guy who hit 1 million miles in one with the original motor recently.
@@daveclark8337one million?? 😂
Accords last. Getting a newer used Accord sedan wouldn't be a bad purchase. The 11th generation isn't as Nice as the 10th Generation in my opinion.
So where do now your toddlers ride? 😂
Thanks for a great video. Totally agree on buying a used car. Buying a 3-5 year old vehicle is the best value for your dollar. Im not a fan of financing, but I if I did, I would put down a larger deposit to really minimise the depreciation / resale loss at the time of changing. Some companies like Hyundai give longer warranties so owners can be protected on older cars for longer.
This makes sense if you only use a car as a means of getting from A to B and don't consider cars your hobby or something you're enthusiastic about. Because if you do then a large part of your "fun" money will also go towards your car(s), whereas other people would put the same money into going out clubbing, having frequent vacations, playing golf, drinking at the bar every other night, etc.
Very well said !! .
Yes, some people treat car as something that move them from A to B. To us car enthusiasts, car is a hobby lol
That's why he said, early on in the video, that the higher percentages are going to be for enthusiasts.
@@cloudoftime35% is “agressive” he said… for car enthusiasts? I don’t think so. I’d say 50% is more realistic.
@@Henry_Aguirre214 Great. You can disagree with the percentages he gave if you like. That was not the point of my reply.
I work in auto finance and it is INSANE how often I see applications where people are looking to finance a car with a payment bigger than their mortgage. Cars are depreciating assets people, and they have never been more expensive then they are right now. That car loan debt has no upsides or chance for return on investment. You are literally throwing your money away when you decide to finance that $80K Silverado with all the options at 84 months. Some people have the disposable income to throw money out the window like that but 95% of people just want a cool truck and are willing to stretch their budget to get it, which is an incredibly stupid move. I personally could afford to finance a vehicle like that---but I absolutely never would. The last car I bought was used, I financed $14K, over 48 months, I paid it off early and I am still driving it. It's 10 years old. If you can avoid financing a car in today's market, by ALL MEANS do so. It is an absolutely terrible time to finance any vehicle.
That’s what I’m talking about 👏👏👏👏 you will never regret NOT going into debt to buy a car, specially now…
What about option to buy Electric car? For example in Germany I bought financing car 1,97% per year. (Cheap money), in 6 months will get a grant for this car, in 1 year I will sell this car with the minimum loses, basically cost of having this car during the year will be around 3k. That is cheaper then rent a car or leasing.
These people are probably patting themselves in the back thinking it's pretty great they were able to "afford" this "great" car they wanted. That they could fit the payments in their budget (paycheck). Did not remotely estimate how much money went down the drain once lease is over. Then they need a new one and wonder why they never have money to set aside for retirement.
At least a mortage you keep equity.
My thoughts exactly. I wouldn't buy a car if I can't pay it off in 4 years. Also I won't pay more than 1000 a month. For me, buying a second property is absolutely more important than impressing my friends.
@@o0mkaElectric cars are boring, there’s no engine noise.
Getting a brand new car was the biggest financial mistake I had made in several years. Getting rid of it and getting into something cheaper was the best decision at the end of the day. One lesson that I learned is that cars all essentially serve the same purpose (for most people), getting you from point A to point B. IMO the biggest reason that people get expensive cars is for the vanity of it.
Except it's not an opinion
At least you did it. Too many ppl keep suffering in their stupidity
Some new cars are better choices than used cars. In particular, some models of Toyota. I bought a new 4Runner and drove it for 2 years then sold it for $2k less than I bought it for. So less than $85/month basically, and every single piece of that car was covered under a full warranty the entire time I drove it. Most cars don’t hold their value like that, but if you’re smart you can make out on a new car.
Used car market is so messed up, that there are some brand new car options that make sense.
You’re getting maximum warranty benefit and that can go a long way.
I bought a BYD for 40k. Now it's worth 50k since they bumped up the price.
I love how Humphrey gives practical advice on car expenses that can really make a difference in your financial future.
I do think it’s very funny that for the past 70 years we’ve prioritized infrastructure that makes not owning a car extremely inconvenient and then halfway through that infrastructure boom we ended up with an economic ecosystem where a significant and growing portion of the population can’t even afford to purchase a car without going into debt on a depreciating liability
All by design, G. Step one, get them in a position where they need cars, step two, raise prices on cars. What are you going to do, not have a car? See step 1.
That's what happens when corporations control the government
You can thank your politicians.
And then went into a global lockdown where car manufacturers stopped, driving up the price of used cars to be even more unaffordable
All the government wants is worker bees. Put you in debt so you can never stop working. You will soon not own anything and your whole existence is cloud based payments, forever.
Never thought I would see the day when having an 80k salary can only get you a Corolla. 🤣
More like a smart car
IKR!!
Right? As I was watching this, all I could think was "damn if everyone followed this 90% of us would be driving beaters" lol
Vehicles have always been my hobby, and naturally I like the cool ones. As such I save up and put huge down-payments on them so I can have something nice, but still be in a good spot financially.
A corolla in 1980 cost like 5k to 7k if I googled that right.
Today they're like 30k.
Wages have not quadrupled to 6x'd to match.
Yes, 90% of people probably *should* be driving beaters.
I had no financial education at all growing up, and absolutely love your content! I just accepted my first job and have been binge watching all your stuff to help, and it has helped me SOOOOOO much. Thank you!
Listen to Dave Ramsey as well. His financial teachings will set you up for long term success by being debt free for life and make proper investments to build wealth.
@@pewpewtactical5288 Dave Ramsey is good but some of his recommendations can sometimes be very old school. I recommend also watching him but make certain you sprinkle in some diversity to hear the pros and cons of other ideas and approaches to financial success.
The 20-4-10 rule: 10% is of income includes car insurance/maintenance/gas. Not just the car payment.
I know right this guy is full of shit
I somewhat did the 10% rule without knowing. I made 42k last year and got a 2000 camry for 2.5k and put 2k in repairs. It has 185k miles and runs great
Nice!
It all comes down to not having to keep up with the Joneses... I am currently financing my car, but I made sure to not only buy a used car at the optimal point of the depreciation curve, but also one that I can easily afford (i.e.
yes agreed Spencer
Porsche 911 holds its value the best. Fyi
What car did you buy?
I’m in car sales and I do have to say . Good luck if you use this for shopping. Even at a franchise dealership during this time finding a $14,000 is very hard. With inflation and most manufacturers behind still from Covid, used car prices are high . So a $14k car will either cost more money long term to maintain also if the mileage is high then your bank is going to give you a higher rate they don’t care if your an 800 score they care about the year and mileage and resale value. So if your trying to find a budget car your car payment may be lower on a new car for the same term. To the buyers it make way more sense to buy something that’s newer and less interest rate .
Thats why people shouldn’t finance cars at all. Someone who make 50k a year after tax shouldn’t finance. Just save up and buy the car at around 20k. You get almost everything which isn’t older then 4 years and hasn’t more then 70k miles on it. But that what you people at car dealerships wouldn’t sugguest the average joe ever.
@@tailedbeast7829 if someone can live rent/mortgage free it would be easier to do to save $20k but in today’s economy it’s hard to just save up money like that.
@@tailedbeast7829 Have you looked? $20k won't even get you into a 4-year-old Civic right now, let alone "almost everything"... prices are sky high. Almost any four-year-old used car is priced within $5k of it's original MSRP. On the plus side, mileages are generally LOW due to the pandemic. I bought my 2006 car for $10K in 2014.. and the same car (with the same mileage) would command every bit of that today.
@@tailedbeast7829 with how people drive these days, I never will buy a car that already has 70k miles on it. I'll spend a little more.
Not hard to do at all. Just buy an older car that has good reliability (like a Toyota), do proper maintenance, and your own repairs when possible. Buy from a private seller, so you're not throwing money away at a dealer. In fact you really never need to spend even as much as 14k. People significantly overspend on cars. Quit caring what your neighbors think.
My brother in Christ, have you shopped for cars lately? A $14,000 car is over ten years and 100,000 miles. A three year old car sells for roughly the same as a new one.
Yes, that’s the nature of life. Being responsible financially often means not living beyond your means. If you can only afford a 14,000 car then your shopping for cars in that budget regardless of what they look like or how many miles are on them
@@Sarahsmydogbut what good is it to “shop responsibly” if the end result is a car that will cost you more to maintain than just buying a little better car at a higher price? Perfect example, had a paid off car but it needed $2k in repairs if I did all the work myself or $5k at a shop. We bought a car instead that needed nothing for years.
@@ericdavis7523 bro. It cost 2k to repair your car and you’re saying that somehow spending 14k or more is smarter? This is why Americans are in such financial trouble. You’re spending 7x the cost of the repair to avoid spending money on the repair, make it make sense.
@@Sarahsmydog its insane the way people rationalize themselves into debt
@@Sarahsmydog I don't think the math is clear to you. I will give you an example on my skin: I bought a car (Mits Lancer in 2009) paying it 4,000. One week after, I had to pay 1,400 dollars in repair (=5,400 total). In the next 6 years, I paid another 5,000 here and there (anotehr 1,600, then 800, then 1,000 etc). This put the cost of that thing to over 10,000 dollars. On top of this, the car was already not fuel efficient, and right now I pay 35 dollars a week in gas simply to do 20 minutes ride to work (no highway). I calculated that I am spending roughly 1,600 dollars a year in gas. Now let's do the calculation: putting all together, I spent roughly 20,000 for a car that right now I cannot resell (carvana gave a 100$ to pick it up). If I am disonest, I will sell it for 1,000$. By the way, the car is to toss: I do not trust make it more road than I need to. And the insurance is not full-coverage (the cheapest I got at the time). So, no I would have loved to have bought a 20,000 car at the time (couldn't do it though) that had minimal problems (e.g., oil change) and pay that money in 4 years and eventually keep it for another 6. So, my car now, cost me 20,000 dollars and I have to toss it after 6 years. You do the math.
Yes, money can be spent wisely, making some efforts and knowing where to spend. A car that cost 14,000 with 100,000 miles is not worth it! Ever.
When a vehicle payment is as much as a house payment we've hit a new level of idiocy.
My monthly mortgage used to be $976 per month! Some people are paying way over that for a car!! Mind blowing!
I care far less about losing a car than I do my home... as such I didn't buy anywhere near the home mortgage brokers, realtors, etc, wanted me to buy. To me, $200k on a home was already alot - I want to be able to pay the payments using passive/guaranteed income for years to come if it came down to it.
In contrast, let's say I'm sick... well... I don't need a car, I can sell one or both of them, recoup most or all what's owed on them, and be done with it easily... doing that with a house is more time consuming - and I have to move, which is a hassle in and of itself (and far more expensive than the beating I might take on a $70k car). Thankfully, the used car market is stupid and my cars are both worth more than what's owed ( in fact, my Volt is probably worth more than I paid for it ).
I pay ~7% monthly for my mortgage (all costs included)... I pay nearly double that on car payments.
To me, it's just a matter of outflow vs inflow, the distribution isn't terribly important. Considering most people in my income bracket are spending 20%+ of their monthly income on their mortgages and then another 10%+ on their auto loans, I have much more disposable income and more headroom.
Facts my co worker just bought a 100,000 dollar gmc truck traded his truck in 32,500 and is paying a 1100 a month of 84 months that’s wild af
@@looncraz the car market is going to flip really soon with rising interest rates. Your cars may not be worth much in a few months.
I have been buying used cars (before this craze started) usually 3 yrs old and after the depreciation makes them cheaper. I currently own a BMW and Lexus, paid ~20K less for each than if they were new.
@@mikezerker6925 I usually buy cars a few years old precisely to skip the major depreciation. Bought my 2018 Volt for $18k in 2021, just as the market started going stupid... market rates for the car had already exceeded $20k but CarMax hadn't updated their pricing, making them the cheapest by a mile. Managed a 0% loan for that purchase, which shocked me... no extras or anything.
I did buy a new 2019 Volvo XC90 T8 Inscription, but that was mostly forced by the high cost of (and lack of available) used models, the $7500 tax credit making it cheaper, and a few other factors that made going new the smarter choice. That was $1400/mo in payments for a few years :eek:
I keep my cars until they fall apart or reach about 200k miles, sometimes a bit more, so I have a good 4~5 years before I really care about the used market, but both cars will be long paid off before that happens.
I learned my lesson the hard way…29 years old and currently on my fifth car. I financed cars for the passed 12 years and I regret it completely. I was always thinking about how cool I would look but decided to finally wake up and stop spending money on stuff that goes down in value. Switched from a BMW to a 2023 Camry that I got for 29k out the door. Couldn’t be happier and planning on keeping it for at least a decade.
Being more concerned about looking poor than actually being poor is one of the most common problems people have. Good on you for snapping out of it and turning things around.
You apparently still didn't learn your lesson if you bought a brand new car LOL
@@lfpurpose facts
2023 Camry Hype train! I got the XSE trim with a few upgrades to the package for 36.5k OTD, but it's my daily commuter and I plan to keep it for 15 years.
To those criticizing him for buying new, the used market isn't exactly priced well for the reliable camry. Why would I save 1k on a 2022 Camry with 30k miles on it when I could buy new and do a proper drive train break-in, and know the vehicle maintenance from the start?
I'm still driving my mom's 2010 Lexus LS460L....runs like new...got all major repairs done under warranty...... my grandma just gave me her 2006 Lexus LX470 that clocked 190,000 on the odometer and it still runs like brand new.... don't think I'm buying anymore car.....
Car notes are insane now. My dad never paid more than $210 dollars on a car note, now the average is $700, not to mention the rise in interest rates. As long as buyers keep accepting them, they’re going to continue to rise.
these numbers are so wild
basically most people cant even afford a decent old used car.
at $40,000/year theres basically ZERO cars that you can own with a total monthly payment of $333 including insurance and maintenance. thats literally impossible
Yeah.. in 2021 I was earning $40k, bought a used 2018 Kia forte for 15 grand total (5 grand down) and I was paying 190 a month plus 90 for insurance, but now insurance raised to $160 a month so I'm already over your budget 😂 not saying that you won't be able to have this low payment now... And now I'm also afraid it may get stolen by those Kia boys 😂😂😂
@@americanboy1332 your insurance rate is insane, I'm paying $260 for 6 months on 2019 Mazda CX5 (Geico). If you do some shopping around for insurance, it will save you a lot of $$$.
Don’t buy a new car. I make good money and drive a 2003 Lexus Gs300 that I bought for $5,000 cash. Even at a 10% interest rate with 0% down and a 24mo schedule, that’s still only $230/mo plus insurance. My insurance on this vehicle is $46/mo
@@ryangriffith33in Canada a used Honda fit with 210000km goes for 10k. With that you’re taking on any potential issues and maintenance. A new car that you plan to keep for many years with regular upkeep can end up being much cheaper in the span of 6-8 years
@@haydentronnes9539 Not even close. 210,000km is barely broken in for a Honda or Toyota. I bought my car at 310,000km for $5,000. Have driven it for 2 years with maybe $600 in maintenance aside from oil changes.
I'm still driving my old 1999 Toyota Tacoma. 4 wheel drive, standard/manual shift, and basically analog. No power windows or anything.
Pros: Easy to repair and it does have AC.
Cons: Underpowered with only a 4-cylinder motor.
99 Land Cruiser here. I'm a little tall for the tacoma and need to fit the car seats or I might have one instead. Love the manual
Unless you own a hauling business or own horses there's no need to have a big displacement pickup. Your Tacoma can do 99% of the activities a V8 full sized pickup can do and will last longer too.
@@RossGoneRogueand is its a v6 it will get the power of a 4 banger with mpgs of a v8
Sometimes it's also about why you need the car for. We got a new car last year because we drive all around the US for work on a regular basis. It wasn't smart financially but the life improvement it created is worth it. Obviously it wasn't the financially smart thing to do and that's not what your channel is about, but I also wanted to express that sometimes when you buy a car you also buy much more and if you're willing to pay for it, it might also be worth it in some way.
He just speaks in general guidelines, and it's not bad advice for the vast majority.
I own my business, and bought a more expensive truck. It's my office, and I spend more hrs driving a week, then many work. I also spent more for a new venture that I can rent out trailers, actually paying for my trailers and truck payment. That doesn't include the tax incentives for businesses.
Breaking down to that level is just not very feasible.
At the end of the day, sometimes, a car can be your enjoyment. Some people go to the bar, the movies, or put that money into their vehicle.
@Steve Hope while I agree with everything you said it's apples and oranges to compare a vehicle bought for a business than a personal vehicle. They are two completely different propositions.
It’s been 18 years and I’m still driving my 2005 Corolla. 13-14 years of no car payment!
Ok
I'm going on 19 years with my 1997 bmw (paid $7000 cash in 2004). Lots of diy, but it still puts a smile on my face. Stay away from turbos, automatics, SUV's and staggered wheels and you are my kind of person.
Still rocking my 2008 VW Jetta
You're the real MVP!
My parents have a 2005 corolla they bought new and beat the shit out of. Still going at 200k miles with absolutely abysmal maintenance history.
Great video. Here's another tip.
The first vehicle I leased was great!
If you're able to stay under the mileage limit, maintain it properly, and keep it in great shape, you can make some $$.
I bought the car for a sweet price, turned around and sold it for a handsome profit, and use that $ for the initial payment on the lease.
Did the same with the second lease, and had enough to get my midlife-crisis car, used 1yr, and had it payed off in less that 3 years (had a 5-year finance).
Drove it to the wheels where close to literally falling off.
Junked it, added a little more $ for the next used car, paid-off in about the same amount of time and still driving it now.
Not sure if it was luck or good planning, but it's worked for me!
I am a car enthusiast . A lot of my passion and ambition comes from the deep desire to own expensive sports cars. At the same time I live a very financially sound lifestyle with investing and saving. The key is balance when it comes to needs and wants. If you want to own expensive cars you need to make cuts in other areas. I do not buy expensive clothes, housing, go on vacation or have kids. I have had friends shocked at how much I pay in fixed car payments but their travel, childcare, and home cost far exceed my car cost. Its all about the bigger picture when it comes to how much you want or can spend on a car.
I’m right there with you. I’m seeing that even making a little over $100k I still can’t really afford a civic type R.
@@ROVA00 You could buy a Civic Si 7 gen easily, haha.
I think driving certain inepensive cars can show having a good tastee too; I drove a 05 Mustang GT to the work once and my boss asked me "is it manual or automatic ?"
On the other hand, my assistant manager drove his AT WRX to work and evey colleague and male customers were teasing at him.
@@YuShawStang yeah but a civic SI just wouldn’t do it for me anymore. My last car was a built 2006 STI and it would have to be an upgrade for me to consider spending much over $40k :-( sad times
@@ROVA00 For Cost/Performance perspective, CIvic Type R is not a good choice
@@YuShawStang not with the markups, no. But at $43k I think it’s a fantastic value. The type R is a track weapon and handle like fighter jets. Has four doors and enough cargo space to make it a livable daily that I could take on a trip. I can’t think of many cars for the price that have all of that going for it while also having Honda reliability. The Golf R is kind of close but I’ve driven them and they are a bit bland and VW has terrible reliability after the warranty period ends.
It’s tough because the 35% rule and the 10% rule equate to very different cars you can buy too. I got a car right out of school that’s total worth was nearly half my starting income but the monthly payment was only about 11 or 12% and at that time still lived with my parents and could afford a payment like that since I didn’t have any massive other expenses. Could I have gotten a way cheaper car? Absolutely. But looking back I’m so happy because I got a car I loved, while it was pricey I could still afford it, and 4 years later the car is paid off and I should continue to have reliable transportation and a car I’m very happy with for a minimum of 7 or 8 more years hopefully. It’s hard to follow a specific rule when situations always very so drastically person to person
You're situation is different because you didn't have to pay for rent or a mortgage which is the biggest monthly expense for the vast majority of people. It still wasn't a good idea, but it is far more manageable.
@@moonlit85I’m 20 and want to start investing. I’m thinking of financing a car and investing at the same time to accumulate more profit than the total that there is to pay off.
Lol your circumstances isn’t common, and it’s an outlier .
@@Deimian676Living with your parents in your 20s is extremely common, I’d argue people in their early 20s and even maybe mid 20s living on their own (this includes living without a roommate) are the outliers.
@@DsgSleazy got ya!
Sadly, many car manufacturers are not making cars for the average income earner. Following the 25% guideline, a salary of 50k puts you in the 12.5k car price. The cheapest car in the market is the 2022 Chevy Spark at 13.6k
There are used vehicles less than 12.5k. That’s kinda the point. Don’t buy a brand new car
@@seed.planted That's where the hazards of being post-warranty, questionable reliability, high mileage, electronics issues whether it's sensors or infotainment, etc can all easily turn into big repair bills. They're cheap because either the car's old, unreliable, high mileage, or some combo of the three.
@@seed.planted a 12.5 k used vehicle is going to be at least ten years old these days. Better buy a Japanese car and pray. The old normal is gone
@@Eibarwoman that’s not really true. a 4 year old car with 40-50k miles will not be giving you any problems (let alone expansive ones) for a while, unless you buy a POS car. Cars these days will rarely have problems before 100k miles. This is especially true if you research brand reliability and stick with tried and true Honda/acura, Toyota/Lexus.
The only scenario where I would buy a brand new car is if I’m making over $200k/year and if it’s a sports car that is more likely to be abused.
My Mercedes c-class was worth $53k when new. I bought it when it was 4 years old and had 54k miles on it for $19k. It looked and even smelled basically brand new and 50k miles and 4 years later, the only thing I’ve had to do is regular maintenance and replace the thermostat housing.
@@ROVA00 The problem is the depreciation from 20K to the affordable to the masses 12K under the guidelines suddenly moves from 4 year old vehicles to a 10 year old vehicle. The market's not exactly behaving rationally and the electronics/infotainment are the least reliable aspect of newer cars.
I love UA-cam recommendations. This guy helped me to realize how poor I am and my country is.
By this logic no employee can buy a new car in my country, it's fascinating. What's more fascinating is, at least for now, we have to pay more tax than the actual price of car, even for the cheapest models. Gotta love being a Turkish citizen.
This all worked pretty well until the past few years. The average price of a new car is something like $47k. So the usual answer to getting around high new car prices is to buy used. Well used cars aren't cheap like they used to be. I keep waiting for a halfway decent car that is 3-5 years old to fall within my budget and it isn't happening. Thankfully, I have a very reliable 12-year old Acura and I can try and wait this out.
It will happen. I see soooo many used cars in lots right now and it'll get to the point where they are forced to sell them cheaper.
Happened to me pre-pandemic when I bought a truck. I was looking at 2-3 year old ones on the lot that were only listed about 3-5k lower than the new models and they had an average of maybe 50-60k miles on them. When you buy used you usually don't get any of the dealer benefits so when I pulled the trigger I got a bunch of GM cash, money for having good credit, some other 'sales marathon' thing and spent less than $1k more on a new truck with 7 miles on it than a used with mileage already on it. The dealer incentives kinda ruin that "buy 2-3 year old vehicle" rule sometimes.
@@RossGoneRogue I have literally seen the used version (30k-45k miles) of a car I was looking at for the same price as it is new within a two hour drive. When I bought my Acura in 2013, it was 2 years old with 18k miles and it was $13k off of the MSRP price.
@@norwegianblue2017 those days are long gone I'm afraid
Yep...I am still driving my old pontiac waiting for the market to get under control. I have been waiting for 2 years.
Well done video. I am in the car business and work for a high end store and it amazes me how many people will come in and pay a crazy amount of their income on a vehicle. I even had a couple in their 50s that wanted to buy a house and were told to lower their car payments. When I suggested the nice low miles Honda we just took on trade, the wife said she wouldn't drive "that" and instead she wanted the brand new luxury car that was increasing the current car payment.
I’m a Realtor and have seen way too many people turned down on a loan because of car debt. They are short sighted and hopefully won’t end up like your fifty year old couple. No house and a flashy car.
At that age, it’s just sad
😮😮😮
@@Shay416 driving their quickly depreciating net worth.
Thanks for the informative video i’m just getting into buying my first car and few days ago i decided not to buy a car that’ll keep me shackled in debt just to impress people who don’t care, and i would like to add that people should look for reliable well known brands with cheap car parts because people can get fooled easily into buying unreliable cheap cars that will be a nightmare for them it would’ve been better if they bought that expensive car they wanted
I have a 20 year old Mercedes W203 that I bought used, 5 years ago. Everyone tells me that I spent a lot in repairs, but (consider chilean context), annual tax is cheaper, I don't pay any credit, I spent a high amount in repairs and maintenance and the car still runs sweet, but it will be much cheaper than buying a new one for the nexrt 4 years. When this one is dead I'll surely follow this advice :) Thanks!!
Old 1995 VW station wagon here.
Bought for about $350. In the last 5 years of ownership, I've replaced a crankshaft sensor and a door handle for a total of about $15.
You could complain that the gas mileage isn't great, it's not as safe as modern cars and that it's not trendy, but on the other hand it's extremely reliable and gets wherever I need to go.
:)
I’m 18 and I recently bought a 2016 Toyota Corolla my car payment is $310 a month over 48 months. I think I got a good deal I put 5k down and financed about $12500 with a warranty that covers basically everything. This is something I’m proud about and plan to drive this car for 10+ years.
Make sure you change the oil every 5k miles. Got that from a trusted Toyota mechanic.
@@deborahjackson6108thats like telling him to breathe air
Lol changing oil at 5k miles is standard for all cars.
@@heyohlaha7858 I think they are providing a reminder because toyota has been pushing the 10k mile oil change on their new vehicles. Which in some cases is way too long, especially if driving in city.
When I was 18, I bought a brand new car off the lot. It cost 100% of my annual income. I made the decision because I didn't want to deal with a hunk of junk that someone else had abused. Practically zero maintenance, and fuel efficient. I'm turning 30 next month and it remains the only car I've ever bought. It's been paid off for six years. It's one of the best decisions I've ever made.
You were 18 probably still living at home. Try that when you 30. Not going to happen lol
⬆️Get in touch with me!.❤
@@snc237 You should be making twice or triple the money you’ve been making at 18 when 30 ..
What a comment. What did you eat? Did you live in the car? Are you understating your income because other people were paying your expenses when you were 18?
Sounds like you're not interested in cars. But wasting your money in your early years for a chunk of metal and plastic? Why?
It’s interesting to see this numbers and put them in other markets’ perspective, for example here in Brazil following the 35% rule, only the 1% would be able to afford the officially cheapest new car sold in our market.
You'd have to be pretty damn upper middle class here in the US right now, minimum of a new car you can insure is realistically 25k+, everything else is either impossible to find or like with Kia, insurance companies either charge through the roof or won't accept them because they're easy to steal
Then don’t buy a new car.
@@Dbb27 if only one percent of people buy new cars how are there supposed to be enough used cars for the other 99 percent? Use half a braincell
@@Dbb27then what do you think the used car price will be when the Supply of used car dried up, smarty? 😂That is right, we are seeing the begining of it.
@@林振华-t4v well smarty. Used car prices have dropped and the inventory has increased. There are plenty of people that can afford a new car and trade theirs in every 2-4 years. Not everyone is broke. Also people age and can’t drive anymore as well and let their low mileage car go. I’m in the market and there’s plenty of cars available. Not sure what you are saying. People who don’t have assets and have to make a higher payment in order to buy a new car shouldn’t.
The other problem with getting a car that you can afford, which is usually a higher mileage, older car if you don't know how much it's gonna cost to fix it, I mean, at least with a newer when you have a warranty and you can save up for things, but if a fuel pump breaks the transmission engine brakes it's on you and that's thousands of dollars
Buy an old Toyota. The chance of most models having the transmission go out before 350k miles is low. There are some specific models that give out at exactly 350k miles but it'll take you awhile to get there from 150-200k.
Do yourself a favour, and do either of the following:
1. Buy a decent, safe, reliable, and cheap (under $10,000) car (e.g., Accord, Camry, Corolla, Civic) that is ~10 years old and run it till it’s dead.
2. Buy a moderately priced used car ($15,000) that doesn’t depreciate as fast (e.g., Japanese cars) and run it for 5 years and sell it for $7-10,000 afterwards.
Currently driving a 2009 CRV that I bought for $6,000. It’s absolutely perfect. I could drive it for another 5 years if I wanted to but I will probably sell it in a year and get something newer like a 2012-15 4Runner
All the models you listed have gone up the most in price both in New and used market.
@@NPC10912 Just looked up a 2014 corolla and found one for 8k and 150,000 miles. My mother in law has a 07 corolla with over 300k miles and is still running. People are trying to justify their purchases and impress other people who couldnt give a damn about your financial security.
I bought a 2015 Honda Accord and paid in full. It was a sacrifice putting that much money away in savings but the freedom and peace I have knowing my car is fully paid for is priceless!
One thing that often gets overlooked is registration costs and insurance costs. Our current 2 cars (14 and 15 years old) cost only $60/month for registration and insurance. 2 cars that are just a few years old could easily costs 6X that.
Thank you for the validation. I unknowingly did this on my last car purchase (honestly just lucked out and didn't get over my head). 20-4-10 is a great rule! Great advice!
I am a resident of NYC, never needed a car now I have a child and I want to expand my footprint possibly to the suburbs. I own property, save judiciously and I just started shopping for a car and it’s INSANE…. LITERALLY a money pit wealth killer. Even used cars are so inflated now. Thank you for this great video. Super helpful !
Just buy a prius or something similar with Toyota Hybrid. You may spend about 20k for a good used one but it will hold its value good, has ridiculous MPG and has great reliability. Far away from a money pit 😉
As long as you get a good and reliable old family car there are some good options and also giving the primary maintenance yourself you save aton of money
My rule now is I pay cash for it, or I don't get it. Amazing how your thinking changes from your 20's to your 40's. Thanks for the great info!
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I had that thinking in my 20s. It's the new generation that have finance on tap. When I was younger, people spent £500/1500 on a car, and that was it. Nowadays people think they need to spend £10,000+ for their first car.
Hey. Here in Brazil you pay 1.92% interest per month with a good credit score. If the car is used, the interest increases. It's brutal to live with an environment of high rates.
I’m so glad that I’m into old Japanese enthusiast cars and just fix them up. Cheapest way to be a car guy ever.
I have a 2012 Honda Fit. I bought it new in cash. I drive approximately 52 miles per day for work plus vacation mileages. I have 193,890K miles so far. It’s been a great vehicle. Praying it’ll drive until 400K miles!!
Best financial advice I ever received from my father regarding car buying--
1-save enough to pay cash.
2-if you must finance - nothing more than 36 months. If you finance longer than 36 months, you’re buying a car you can’t afford.
Retired 18 months ago and still drive the SUV I paid cash for 23 years ago.
That is really bad advice
paying cash means no interest and no need to worry about the interest rate.@@StEvEn420BrUlE
I laugh when people brag about owning vehicles for 20 plus years. Try doing that in the northeast.
Dealers now charge higher price for cash purchases than if you finance.
Congratulations. Do you want a star on your fridge for your effort? Did you live and love life to the fullest and are you happy? If so, you did it right.
Awesome video! Lots of great info. Its just amazing how many people get sucked into buying a vehicle they cant really afford because they want what everyone else has or are easily persuaded by the sales person. Nobody wants to be patient and put in the time and work to afford something comfortably. They have to have it right now.
And you should definitely have your finances figured out so you know exactly what you can afford, length of term, and monthly payments, insurance, etc before you set foot on a dealership. Otherwise those sales people will shake you dry! Give yourself some wiggle room in case extra unexpected costs come up too. If you figure you can afford max a $25,000 car, start looking at cars that are around $20,000. You may find something you like that is less than the max you were willing to spend and be much happier about your purchase in the long run. Plus there are other things to consider like extended warranties on a used vehicle for instance. Things like that which may not cross your mind when you are budgeting for your car. So a little wiggle room is wise!
Good advice, tip #2 doesn’t refer to inflated car market where used cars hardly depreciate though
Me: This should be helpful!
*lowest example is $40K/year*
Me: Frick my life.
If you can, ware house jobs can usually get you well over 40k a year , tho it’s tough work
@@cyberdefaultyes you can. But still can't afford Anything. Only 3 or 4 cars under 25k new I think it was.
@@bosshoss6640 the whole point of the video I feel is not to buy a new car especially on a salary under 80k
@@cyberdefaultnot in Germany, I have a quite good paying IT job and I am far away from making 40k€/y after taxes…
@@bosshoss6640welcome to Germany where a basic Ford Focus kosts u way over 30k€
Kinda similar in Poland. People spend fortunes on cars. Down here it is called " you need to live on a certain level" or " you know it is all about the safety" :) When I lived back in the States I drove cheap used cars and people thought I'm kinda stupid. Now I live in Poland and keep driving cheap used cars and people think I'm kinda stupid :D So I guess as my grandma used to say - no matter how fast you spin, your a$$ is still behind you.
love that saying from your grandma 🔥
@@humphrey Thanks. And I love your videos. Very useful and inspiring.
@Kevin Nobody told me I'm stupid. Is more like reading between the lines. Both friends and family think as I am kinda torturing myself not buying more fancy car. They do not get it, by doing so I have more days off at work at the time they get mobbed at work they hate :)
Good points. Thank you for speaking about opportunity cost. As a CPA, this is one of my huge pet peeves when people discuss making sound financial decisions. It might feel nice and dandy to own the car up front, but you are forgoing all that potential growth on the free market.
I would also say that car loan term length is not really relevant. While yes, you will pay more interest on a depreciating asset, the benefit of more cash in your pocket from month to month is a superior position to be in. If you follow the rule of owning at least 20% of the car up front, the term is irrelevant. Just manage cashflow, and use excess cash to build wealth.
I completely agree. The extra cash can be used for investment in to a business, Roth IRA, 401k, etc…
Your point on opportunity cost was some of the best advice I heard when I was buying a car last March. I went with that approach and it ended up saving me thousands. I watched many other advice videos at that time and nobody else mentioned that tactic.
Hi there! I’m not sure which vid of Humphrey’s you were referring, but in short would you say the answer should be buying? Since you mentioned that decided to buy one? Thanks!
@@红色的浩克
The car you can afford is the one you can pay cash for. I saved up and bought my first car at age 23 in cash, it was new and $17k. Although I see that as a smart decision because I never had a payment, it would have been even more wise if I bought a cheaper used car.
If interest is low, then it’s not smart to buy in cash
Having said that, I’m 25 and still buying the beat up car that my parents got for me in college.
It's very difficult to pay cash for a car usually and there too many places where you can't do anything without a car
@@mjrvi9866 sounds like an excuse really. There are plenty of ways to get around without a car, a car just makes it easier and more convenient.
That’s great man. I mean, it’s better than paying interest. And paying several thousands more. I mean sure you could’ve gotten something cheaper or even better, getting a $300 bike or something. But why dwell on it. I’m sure you’ve already made the 17k back by now.
i got my car for 0.99% rate and at the time my savings account was a 0.5% rate did make sense to cash a car when my rate was .049% essentially. now my savings rate is 3.25%. so it makes even less sense for my to pay off my car. so it depends on the situation of course
Bought my first car for 5500 cash off Craig’s list.
Still driving it. 5x’d my income in that time. Commute in my company car.
Don’t buy a nice car until you own the garage you’ll be parking it in.
nice!
I make $151k per year, and my car payment is $352 per month. I would never dream of paying $1,000 per month. That's insane.
What do you do for a living?! I work in Healthcare and am trying to get paid a bit more so I can be around 120k a yr
Same here!I felt bad getting a 2023 Honda civic thinking I was over stepping my means. But it is nice to have a car that is reliable now.
@@mytrungYesssss. Love me a Honda.
Exactly, that chart says $1083 for me and I’m like hell no. Just paid $268/mo for 4 years and it’s so nice to not pay that anymore.
Cap, with a name like that you ain't making 151k 😂
Literally the best video break down of this process. I appreciate the visuals and graphics.
My father recognized the car market was skyrocketing and so when he found a car for my first vehicle I outright bought it with my savings at 16 ( my own job) . Im 18 now and still run my 2007 Volvo. It was in an accident a few months ago (nothing major) and owning the vehicle I decided I didn't care enough to fix it. I 100% recommend any teenagers save save save and buy an older vehicle outright.
I got a 2008 Volvo for $4k on Craigslist last year and I love that car
I bought my car in 2020 using the 20-4-10 rule and am so happy I did. I love those little "rules" on budgeting it helps me a great deal.
I wish I had cared more about money management earlier. Im 25 but really made alot of big mistakes up to this year. bad Mental health is a bitch.
@@chancemcclendon3906 you can turn it around you’re young enough
I had to buy a car after mine got totaled, after having just paid it off😭 Because it was the time when used cars were going for more than new cars it made sense for me to get a brand new car. I make just over 50K and my car payment is $326. Might be more than the rule suggestions but overall happy with my decision(plus the insurance payout was greater if I went with new than used🤷♂️)
I like this chat! My RAV4 2008 is in mint conditions. Paint is super glossy, miles on my car is at 300,000. Still running like a champ.
Monthly payments: N/A
Salary: $125,000
Someday we will get back to cars depreciating 20% in the first year, but many used cars still sell for near msrp (over in some cases) at 1 year old. Car market has been horrible for years.
I make 100K/year and have an 05 Hyundai Tiburon and ive been driving it forever. Ive been trying to stay discplined and not get my 65K dream car.
I net 80-100k a year and drive a newer jeep I paid 28k for but I keep a 93 ford escort as backup lol. Love that little ford.
Similar story here, stay strong LOL. Nice cars a money pits.
@@awesomemusic3882 Thank you! I needed thos.
how miles do you have on your Hyundai?
Terrible time to buy a car but I did. My 03 Camry finally gave up on me. Got a 2023 corolla cross. Let's say I'm eating rice and salt for the next 5 years. Lol! Jk.. im just frugal and would rather use that money elsewhere. Payment of 435 a month. I know nothing about cars so I feel its better for me to get a newer car with warranty to take in if anything happens. Thanks Humphrey
So proud of my car purchase for the time I got it. $5k loan, at 7% for 36 months. I’m right at about 12 or 13 months in and only $1,000 left. I’ve been making over double payments and just got aggressive with it. Car runs great and I do all my own repairs. Hoping it can last me until I can pay cash for my truck in a couple years. Great video advice.
I just bought a 2020 atlas cross sport for $39k. Paid cash while maintaining a 9 month emergency fund. I struggled with the idea of spending so much with a salary of $118k/year but I really like the ride and plan to keep it for 7-10 years, so decided what’s the point of making money if I don’t spend it.
@kent hoover: is that 39k out the door including taxes and fees etc? I would assume basic trim right?
Bought a 2022 Honda HR-V just about a year ago. Went to a local credit union and got 1.9% APR for 5 year auto loan. Put $11,000 down and out the door price of car was $29,990. Payments are $335 a month with gap insurance. This was before the rate hikes, also why I wanted to buy last year even though car supply sucked. My salary before taxes is 45k. Most new cars are just too expensive now, used cars last year were a rip off. Wanting 2k less then a new car for a car with 50,000+ miles on it
thank you for this video. I just reached min. 1:40 to know I cannot afford a car.
Loved this video! I make a little over $200k in the Bay Area and recently sold my $68,000 Supra with ~$850ish/mo car payments for a used 2022 RAV4 Adventure. No more car payments since I payed it off in full using the proceeds from selling my car. I cut my insurance in half and now I'm saving over ~$2000/mo due insurance/gas/maintenance costs. Better to live under your means. Now I'm investing that extra $2000 every month.
I think buying a nice used car 3-5 years old is the way to go. I bought a 3 year old Hyundai sonata for 19k it has 19000 miles and was in great shape. Had it 6 years zero problems. Great car.
Not always. Used cars a few years old can still be a stones throw away to a new car cost and if it's a few years old...you got no warranty most likely. So if the transmission or engine goes out halfway through your loan term...hope you have a nice savings or you'll be taking out another loan.
@@professorfarnsworth6189 when I got my Hyundai sonata it was 3 years old, had 19000 miles, was in great condition, and they honored the 100, 000 mile warranty. I never had to use the warranty for anything. Obviously that's not always gonna be the case... But that was my experience.
with a chip shortage last year and a half it was impossible to buy a 3YR old car for a depreciated price. Used certified cars had MSRP price tags and most of the dealerships slapped 4-5K on top of new car price tag. Looks like lately market started to come back to normality though
I hear ya.. I had a *major* repair on my 2008 Honda Accord last year. That weekend I did some car shopping. The new Mazda CX.5 Turbo that I like had a $4K dealer markup! And, the *used* Civic and Accords that I liked? Civic was listed for $3,000 *more* than when it was new (4 years old w/ 57K miles), and the Accord was listed for $2,000 *more* * than when it was new (3 years old w/ 37K miles)!!
Yeh much of this video is accurate 4 years ago and NOT even close to accurate today, I’ve bought 4 cars2 used and 2 new in the last 18 months and only lost money on one and it was purchased used.
No. The market ain't back to normal. It's stopped shooting upward like crazy but now it's seemingly leveling out. Which is bad because it's leveling out at a really high place. What we need is a market crash, and I don't think that'll happen for a bit. If used car market stays steady in this area without dropping, people are gonna be fucked.
The tip to buy a used car would make sense IF used car prices were not overinflated the way they are at the moment.
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I really enjoyed the video. I find myself in a situation where I will be needing a new/used vehicle whenever my paid off one stops running.
I’m finding one though my biggest concern is having enough seats. Lol😂. I need an 8 seat vehicle if I want to be able to fit my family in it.
Looking at options, I really like the MPG hybrid Sienna, but the man in me also loves the Suburan. The price though is apples to oranges.
In the end I will probably go for the Sienna as it has the 8 seats, fits the family, and doesn’t kill me in price.
I like the ideas of rules of car buying and it is important. I have so many other needs to pay for in the large family dynamic. Thank you for sharing
I think a good rule of thumb is that you should be investing % of your income than your car payment. Always buy 3-5 year old cars that have predictable total cost of ownership (know your exit and how much it cost to own the car). Pay it off and apply the car payment to increase your investing/savings rate. Good video!
What has worked for me: Drive a POS as your daily commuter (getting to the Metro station parking lot in my case, or do quick grocery runs), and get a second more "confy" and safer car for your roadtrips and rolling with the family. Both were used cars and cost me less than buying 1 brand new. In most cases you should be able to buy them with cash or using minimum financing.
First smart comment in this section
10% rule is one of the best I´ve heard about owning a car so far. I calculated my budget and turned out I could afford a car I want. I earn 45k a year and has always thought it was too much money owning a car. Turned out I was on 5-7% budget but 10% sounds good and fair. Never thought about thinking in % of your budget before.
and what is the car that you wanted?
@@chiefhere1968 I have many choices but the one thing I´m more into is the toyota corolla 2019/2020 executive model hybrid. Its almost like a new car and a car I can keep for 6-7 years+ with no problem. 184HP. Nothing super fancy but a reliable car for many years
Toyotas are a safe investment, and won't depreciate anywhere near as much as other makes. Sadly, dealers are well aware of this and jack up the prices of their artificially limited inventory.
@@catha86 wise choice brother. Hope it treats you right. :) I am prolly gonna risk it for the biscuit. Have my eyes set on a 2014 benz c300/350 but let's see if I actually go thru with it.
@@ps3beatswiiToyota lost all of my respect. 😡 They are purposely limiting production to make profit. Dealerships are marking up the prices so high, even for base trims
I have an Audi A4 and I will keep this for 10 years. The motor is already refined and it’s not the most fancy but I love it and I don’t want car payments. Yea I’ll pay a bit more in maintenance but it makes me happy so it’s fine. Plus I got it CPO used out the dealer with 5k miles for $40k 15%-20% depreciation on the dealers dime. Gotta be smart in life and just be happy!
Congrats on the 1 Mill!!! And honestly, this video put into perspective what I could afford at the moment or even in the future, I have been tossing around the idea of getting a newer car than the one I have. But your video shows that I have a bit more to do before I should start to really think about it, so thank you :)
By most math no one who makes under 50-60k a year can afford any car. Unfortunately we kinda need one.
that's the sad part. the public transportation needs to be better/safer in order for that to happen but that's not how it works in the US.
that is not true at all. You just cant afford the shiny , flashy , new car that is better than your neighbors.
Plenty of used 10k cars on marketplace.
I'd seen many 20s like me spending their youth, working 2 or 3 jobs making 50 60k a year to pour in those German cars in order to gain their status. I don't see the point of it and of course, its their lives they do what they want
Young people wanting status by buying expensive car is real but poor public transportation is also true
Well, I drive an old 07 Camry that cost $6000 about 4 years ago, so yeah, you can find one. And my credit is pristine, so I could've financed an expensive car, but I'd rather have no monthly payments.
In toronto, the car insurance alone will be 400 per month. I own my car cash thankfully and it’s fairly new but I have friends paying $1300 for payments and insurance on Honda CRVs
Bought a 2017 SUV. Made monthly payments for about 4 months and then just paid it off in month 5. Still have the SUV and I still love it. 6.5 years, no payments. Not having any car payment and OWNING a car is the BEST thing ever. Buy what you want, pay it off and don’t be in a rush to get rid of it.
I bought a used Mitsubishi Space Star for less than 10k$ cash. Sure, sometimes I wish to have a car that's a bit flashier, but it gets me from A to B and was probably one of the more responsible decisions I made in my life. My anual gross salary is around 80k$, so theoretically I could maybe afford more, but to me it doesn't really make sense to spend that much on a car, because you will be stuck in traffic for the same amount of time (at least where I live).
Seriously, I’ve never been impressed by flashy cars. As long as it’s clean and fully functional it’s fine with me.
You guys aren't just buying a brand. Safety features are way better on cars that cost more. 5 star crash safety 10 yrs ago now would be a 1 star.
I love my 2017 Buick encore! $26k OTD grandmas come up to me all the time asking how I like driving it
I can't believe the amount of money people spend on cars. In 2017 I purchased a new truck which was 20% of my salary and paid it off in 3 years. I'm still driving it and plan to do so until the wheels fall off. The one thing I was always good with in life was driving beater cars. I really never had a car payment.
Things have completely changed because of covid and "shortages". Used car prices are insane and dealers are robbing people blind
I bought a new car this year. It was 23,6% rule. Had to borrow part of it, but I'm planning to pay it back within an year. My monthly payment makes up 4,3% of monthly rule. Lithuania. Paid up front. Used.
Yeah I've really wanted a Toyota truck for the ability to haul but they were ~40k and couldn't really justify the larger payments or a longer loan term (even with 16k down payment), so I ended up buying a mazda cx-30 crossover for ~27k out the door (11k loan). Eventually when I get a house I'll just get an old beater truck to move stuff from a to b.
remember - if you have a neighbor or a friend who owns a truck, see if you can borrow it off of them for a day or two. Give them $100 cash, and promise to fill the tank. If you only rarely use it, this will absolutely be worth it to both you *and* your friend.
When I was making $40k in 2020, I bought my 2019 Nissan frontier for $18k and ended up with a $350/mo payment. It only had 1800 miles on it at the time so I think I have a good deal. I make six figures now but have kept the truck since then. My payment is still $350/mo and I pay it off on 3 years!! It runs like new because I take really good care of it so there's no reason to buy a new car, especially if the only reason to do so is to flex, My buddy bought a Tesla last year and I can't even imagine what the payment is on that.
i live in rural east coast canada - a Tesla model 3 will easily run you 100k $CAD after third party dealer markup
Good video and can’t say I followed all the advice! One minor point though - the opportunity cost section should reflect the difference in the investment income vs the cost of financing. It can only make sense if the cost of financing is less than 10% in your example and should factor in that the financing is guaranteed while investment returns are not. This opportunity cost certainly looks different with current interest rates than it would have a couple of years ago.
We are still paying on our family car but the older two hatchbacks have been paid off for a long time. Its a good feeling when you get to no more loan. The third car, a 2014 Focus needed a bunch of work on the suspension due to rust, and other issues. I paid the $2700 because I examined the cost of a replacement and figured it will probably last a few more years. Having the third car has been a great luxury because it’s a spare and we can lend it out when family or friends need to borrow it.
For a car enthusiast you can spend a bit more because it is your hobby as well and something you are passionate about in my opinion
😅 are you à cars dealer? You do sound like one 🙂
Bought a car for $300. Had to fix it myself, now we are at 533,xxx miles. Now I'm thinking of buying a mitsubishi mirage. It starts off at 13,xxx and it is so good on gas. 43 mpg highway. I would only spend 60$ a month on gas. You giys should check it out
You can afford more than this, with the help of financial planner.
ELIZABETH GREEN HUNTS
I always check IIHS crash test ratings before purchasing a vehicle. Cant get rich if you arent alive. Do yourself a favor and get that Mirage. Surely it's safer than the $300 beater you have now.
i wish i had this video before i got my car last year, as the 35% (rather than the 25%, i like my cars) and the 20-4-10 rules would've have kept me in good shape. i've broken the 35% rule, but have managed to keep within all of the 20-4-10, which i'm happy about. once a year has passed, i'll look to buy something outright that falls below 35%!
good insight here, what car is it btw?
@@humphrey Kia Picanto 2016 with 19k miles, from UK. one of the cheapest cars i can insure as a new driver!