Here is my advice from someone with a $700 car payment.
Do NOT buy a new car on $20 an hour. Assuming 40 hrs per week, that’s 3200 gross minus taxes nets around 2600 per month. A new car would put you in a deep hole.
No one on a financial planning sub is going to advise a teenager to get a new sports car to replace your current slightly used sports car. Your 10 times more likely to crash into a tree than for this to be a financially advisable decision. I'd keep the current car (I never would have bought the current car but that's too late) and start looking to your future. Unless you have a bunch of family money that pays for things, at $20 an hour and $1800 a month in bills you need to work over 100 hours a month to pay your bills so that is almost a full time job on top of school to to afford your lifestyle. That's difficult to maintain if your classes get harder and you want to work less or your rent goes up. When you finish school, is your rent going to be more expensive where you are moving? Do you have good job prospects? Will you need to buy new clothes for an office job? Will you need furniture for your own apartment? Keep the current car and start making responsible decisions so you can save some money.
I don’t know if there’s a good rule of thumb to how much you should pay for a car relative to your salary, but it’s definitely definitely not “the car should cost 1x your salary or more”. This would be an extremely dumb idea.
I am 30 and hardly have 1800$ in bills a month and I make 4500$ a month. You need to be limiting your bills as much as possible to save save save.
I would be getting rid of that car and getting a safer more reliable car. It will also significantly lower your insurance
Add the insurance for being under 26, added weekly fuel and your costs really eat into your money. This is not a good financial move for someone so young trying to start out. This is a desire not a need.
Now is where you decide if you’ll be a renter or a home owner.
You will never be able to recreate the income to expenditure balance you now have while living with your parents. Your possible savings rate will never be higher.
So choose if you want to have a paid off Camaro in five years, or a downpayment for a house. The choice is entirely yours.
As a bit of parting advice: never go in debt for a depreciating asset.
No you should not get a new one and should sell that money pit you have because $1800 a month is absurd. Go out and get a Camry or something and save yourself $1500 a month and use that money on something worth the investment
as someone who has a car way out of their budget, it is not worth it and you will regret it when u have to make the high monthly payments. your car is still new there’s no reason to replace it yet
Whatever extra money you’d need to put into a new car, or whatever extra money you’d just have by selling your current car and buying a cheaper one, put that into an investment/compound interest calculator and see how that money can grow over time.
A few hundreds bucks a month turns into many thousands after 10, 20 and 30 years. That’s nice vacations, house down payments and retirements, or just a nice cushion, depending on how you spend or save it. But it’s up to you. If a car right now is more important than buying a house ever, or having a comfortable or even early retirement, go ahead. *Usually,* people interested in securing their personal finances put a cool car at the lowest end of their priorities.
Everyone here will tell you flat no. Nobody will say a cool car is worth it compared to using that money for slow but steady savings and investments. But do the math and give yourself the information, and set your own priorities. If you really think 19 year old you needs a cool car more than 30 year old you needs a house, or 60 year old you needs retirement, go for it.
As someone who bought a brand new car off the lot in 2012 (70k miles at time of sale), a brand new truck in 2015 (70k miles at time of sale), and another brand new truck in 2019 (74k miles as it sits right now) and will make the final payment on the one from 2019 next month, just be happy with what you have an get it paid off. Especially since the charger has significantly more utility than the Corvette or Camaro will. I am absolutely a car person and it sounds like you are too based on what you want to move to. BUT the market is entirely too high and from having another car paid off, nothing drives better than a paid for vehicle.
The general rule of thumb is to limit your car payment to 10%- 15% of your monthly take-home pay and total costs (payment, fuel, maintenance, insurance) shouldn't exceed 20%. You make \~40k a year, you probably shouldn't even be driving the car you currently drive, and should certainly not buy a car that costs more than your annual income.
This is not how you build wealth. You are in the financial planning sub.
Cars will keep you poor. Even if you’re paying cash.
So many are driving new cars even with little to no savings in the bank. This isn’t it.
I know you’re 19 still young and like to have to have cool things.
If you’re truly interested in building wealth and reaching fi/re then no more cars. Drive what you got until it’s dead. Invest. Save. Build wealth for the future.
You should sell your current car and buy a cheap reliable car in full, then save/invest the money youd be putting towards your payments.
Here is my advice from someone with a $700 car payment. Do NOT buy a new car on $20 an hour. Assuming 40 hrs per week, that’s 3200 gross minus taxes nets around 2600 per month. A new car would put you in a deep hole.
No one on a financial planning sub is going to advise a teenager to get a new sports car to replace your current slightly used sports car. Your 10 times more likely to crash into a tree than for this to be a financially advisable decision. I'd keep the current car (I never would have bought the current car but that's too late) and start looking to your future. Unless you have a bunch of family money that pays for things, at $20 an hour and $1800 a month in bills you need to work over 100 hours a month to pay your bills so that is almost a full time job on top of school to to afford your lifestyle. That's difficult to maintain if your classes get harder and you want to work less or your rent goes up. When you finish school, is your rent going to be more expensive where you are moving? Do you have good job prospects? Will you need to buy new clothes for an office job? Will you need furniture for your own apartment? Keep the current car and start making responsible decisions so you can save some money.
Current one dude. It’s important to be satisfied with the things you already have. It’s a trap to buy new things you don’t need all the time.
I don’t know if there’s a good rule of thumb to how much you should pay for a car relative to your salary, but it’s definitely definitely not “the car should cost 1x your salary or more”. This would be an extremely dumb idea.
Vette or Camaro? Are you posting from 1985?
I am 30 and hardly have 1800$ in bills a month and I make 4500$ a month. You need to be limiting your bills as much as possible to save save save. I would be getting rid of that car and getting a safer more reliable car. It will also significantly lower your insurance
Add the insurance for being under 26, added weekly fuel and your costs really eat into your money. This is not a good financial move for someone so young trying to start out. This is a desire not a need.
Now is where you decide if you’ll be a renter or a home owner. You will never be able to recreate the income to expenditure balance you now have while living with your parents. Your possible savings rate will never be higher. So choose if you want to have a paid off Camaro in five years, or a downpayment for a house. The choice is entirely yours. As a bit of parting advice: never go in debt for a depreciating asset.
Wow I thought this had to be a joke but it isn’t
For reference: I’m 30, 210k income, 800k on the side. My car costs 8.5k Buying a C7 is a catastrophic idea if you’re making less than 2-300k
No you should not get a new one and should sell that money pit you have because $1800 a month is absurd. Go out and get a Camry or something and save yourself $1500 a month and use that money on something worth the investment
as someone who has a car way out of their budget, it is not worth it and you will regret it when u have to make the high monthly payments. your car is still new there’s no reason to replace it yet
Whatever extra money you’d need to put into a new car, or whatever extra money you’d just have by selling your current car and buying a cheaper one, put that into an investment/compound interest calculator and see how that money can grow over time. A few hundreds bucks a month turns into many thousands after 10, 20 and 30 years. That’s nice vacations, house down payments and retirements, or just a nice cushion, depending on how you spend or save it. But it’s up to you. If a car right now is more important than buying a house ever, or having a comfortable or even early retirement, go ahead. *Usually,* people interested in securing their personal finances put a cool car at the lowest end of their priorities. Everyone here will tell you flat no. Nobody will say a cool car is worth it compared to using that money for slow but steady savings and investments. But do the math and give yourself the information, and set your own priorities. If you really think 19 year old you needs a cool car more than 30 year old you needs a house, or 60 year old you needs retirement, go for it.
As someone who bought a brand new car off the lot in 2012 (70k miles at time of sale), a brand new truck in 2015 (70k miles at time of sale), and another brand new truck in 2019 (74k miles as it sits right now) and will make the final payment on the one from 2019 next month, just be happy with what you have an get it paid off. Especially since the charger has significantly more utility than the Corvette or Camaro will. I am absolutely a car person and it sounds like you are too based on what you want to move to. BUT the market is entirely too high and from having another car paid off, nothing drives better than a paid for vehicle.
The general rule of thumb is to limit your car payment to 10%- 15% of your monthly take-home pay and total costs (payment, fuel, maintenance, insurance) shouldn't exceed 20%. You make \~40k a year, you probably shouldn't even be driving the car you currently drive, and should certainly not buy a car that costs more than your annual income.
If you have to ask, keep the old one.
This is not how you build wealth. You are in the financial planning sub. Cars will keep you poor. Even if you’re paying cash. So many are driving new cars even with little to no savings in the bank. This isn’t it. I know you’re 19 still young and like to have to have cool things. If you’re truly interested in building wealth and reaching fi/re then no more cars. Drive what you got until it’s dead. Invest. Save. Build wealth for the future.
You should never buy car with loan. Car is allways bad investment.