My 2010 Z

dudafunk

My question from this - LOOKING BACK - do you feel you would have been going crazy in a house worth $200k instead of $220k - and thereby been in a position to afford an extra $20k on your car. I'd put my money on YES which is why I'm so into buying a 'better' car first. But I'm open to change my thinking and would love to understand why someone would say NO to this.

Slynky

Well, without figuring it out, the difference in a house payment for $200K -vs- $220K will mean a difference of about $120 per month. If this amount of extra money would mean the difference between you getting a nice car or a REALLY nice car, then I guess you have your answer.

What Micas was wanting you to be concerned about was the amount of money one puts forth in total when going into debt for a huge chunk of cash. It's, in reality, wasted money. So, as long as you're trying to determine, for instance, if buying a cheaper house will allow you to have a more expensive car, you should also consider if paying/wasting (for example) $3,000 in interest over the life of the loan is worth having it NOW instead of saving up for it.

That's the sort of thought I weighed when considering purchasing a Z for myself... if paying/wasting (for example) $500 is worth having a 2010 model instead of waiting for the 2011 model and having just about all the cash I need.

Hope this answers your question.

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dudafunk

The reason why I don't cry about the $3000 interest and call it 'borderline marketing' is because I could be picking a car which advertises 0% interest and then just eliminate this factor --- but no. That wouldn't be right. So I will look at it holistically - that OK, I'm going to be spending $X overall - for SOME product. And is it going to be ok living in a house $X cheaper than what I would buy if I don't buy a $X car.

Overall, I feel consensus though, with mica's and your arguments. BTW I'm 24.

Slynky

If you can get a car at ZERO interest, just make sure it somehow isn't built into the price of the car. If you're bringing your own loan company, then obviously that's not a worry.

Getting a car at ZERO % is pretty much like paying straight cash for it (but a little at a time). In fact, better because money inflates (to some degree).

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XBadgerX

Can't compare a house to a car.
House = investment that can actually gain value over time.
Car = horrible investment.
It's your money, do what you want with it.

Slynky

And to specifically answer...

We had a Honda Accord purchased one year earlier. We sold it in 2006, so we didn't really get a new car. We did, however, buy a Nissan XE PU the same year. Paid it off in about 18 months. If we had gotten a house for $20K less, I don't think we would "gone crazy". I also doubt we would have done anything differently as it relates to car buying. (but the house would have been paid off by now... LOL)

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Micas

Okay, I lied, one last thing.

You're quibbling over 20K so you can "afford a car", as if that 20k is going to be putting you at your limit. You're looking at it in very strange terms.

Let's get right down to it. How old are you and what's your annual income? I'm betting that you make less in a year than you want to spend on a car. The sense that I get is that you're a young guy who really wants a car he has no business getting, and is that 19 year old type that is Slynky's son.

Young people do stupid things. I did. I'm not going to tell you not to buy something, that's obviously pretty pretentious. I can try and talk you out of leveraging everything in order to satisfy a material desire, but ultimately we're all product of our mistakes as well as our successes. Being held hostage by a big debt for a long time is a lesson that sometimes needs to be learned the hard way.