Brand new 2017 NISMO tech

Originally Posted by Doc's Z

You will definitely want to refinance (if you can); otherwise, the APR and your 72-month loan put you well behind when it comes to the value of the car vs. what you owe (interest is front-loaded - like a mortgage). You may want to verify that your insurance company will pay what you owe, not the vehicle's value, if it's totaled. If they only cover the vehicle's value, research "gap insurance."

If your APR and loan remain unchanged (not refinanced), approximately 30% of the total loan will have gone to interest payments. If you financed an extended warranty, sales tax, fees, etc., then this percentage increases.

Include $725 car payment + $X on car insurance + $X on monthly fuel/etc, and that takes a rather large chunk out of your ability to save for a home (or other purposes). There is a term called "house poor." The same thing applies to cars. You are now car poor. The reality is, you are now spending over $1,000 a month on a single vehicle. Said another way, after you deduct taxes from your annual salary (compare apples to apples - your actual take home pay), you are spending upwards of 25% of your annual salary on a car. For a house payment, there is what is known as the "28% rule." Granted, this rule is for "gross income" rather than take-home pay; however, you are nearly exceeding that rule, and for a car.