Car financing question

With winter cars are a lot better with corrosion resistance, you don’t see the leprosy that used to eat cars bodies out routinely. In winter you can get a ‘chasis bath’ done at a car wash that basically washes out the underside, it will help get rid of accumulated salt and such. Back in the day when the car industry pretended galvanized steel didn’t exist (amazingly, Italian cars were the worst, ironic given that galvanization is named after Luigi Galvani lol) they used to sell all these undercoating services, like Ziebart and Rusty Jones, dealerships up until not long ago used to sell an undercoating package at a several hundred dollar premium, and they were pretty much worthless (what generally happened was, besides the undercoating they sprayed on getting where it shouldn’t, the salt water from roadspray would get underneath the rubberized crap, you would think it was great until suddenly a floor pan collapsed, etc).

I am a car person, very much a gearhead (well, retired), so I understand about cars, but my recommendation to you is to hold off until you actually are settled in a job and area before deciding. Your G35 if it is still in good running shape might be an ideal first car, could even drive it to the east coast (or have it shipped, it isn’t that expensive). If it is paid for, then for example you likely wouldn’t bother with collision insurance, potentially could have only liability, and you won’t be making payments that basically are paying for a car worth less and less. Depending on where you plan on living, while California is expensive the cost of living on the east coast can be very expensive, between housing, food and other expenses like commuting and taxes, and you may find that it will be a lot more expensive then you think.

As a young guy getting your own insurance, an older G35 with liability only will be a lot cheaper than a new car you are financing, because you would be required to have full coverage including collision, and as a male under 25 that is going to be very expensive, take it from me. I don’t know specifically how insurance companies view a G35, but any car considered even halfway “sporty” or “performance” will get you a much higher premium, and if the car is a new, expensive car they will factor in the likelyhood of them paying for you doing something to damage it, which likely will be very expensive to them.

I also agree with others, if deciding to finance do it based on your take home pay, gross pay percentages are useless. Between taxes, health insurance costs, 401k (hopefully), and other deductions, you might find that your take home is a lot less than you might think.

My advice? Hang onto the G35, while maintainence can be expensive (you are likely getting into the range where they have to change the cam belts, it usually is 80-100k miles), they are generally pretty reliable. Since the car is getting up there, you may want to switch to a regular service guy, dealership service is a lot more expensive and they tend to sell you a lot more than you need, it will help you save money. I would do it for a couple of years, or if you do need to get a car hump it for several years, buy a nondescript used car, then when you hit 25 think of upgrading. I also highly recommend not buying a new car unless you are really hyped on that new car smell and such, you can get even luxury cars coming off lease as certified used at like 25,30k miles, that drive great, look great and save you a lot of $$$$. You can spend the next several years deciding what you want, saving money, and when you are over 25, established, get something nice with at least a large down payment if not totally bought that won’t kill you financially.

Consumer lenders (back when I did lending) would usually suggest potential home buyers spend no more than 28% of gross monthly income on the housing payment and 36% on all consumer debt, mortgage included.

I always thought that was too high for my taste, but that is probably what a lender would allow you to borrow. Doesnt’ mean it’s advisable to do so.

Wasn’t wearing my glasses when I first looked at the thread title. I thought it said “Cat financing question.”

Lol, there are some really expensive breeds out there, but that was going to be a first for CC. :smiley:

@musicprnt I appreciate the thorough response. I am thinking my girlfriend and I are going to do a cross-USA road trip. Probably more on the Northern than Southern side of the US. I keep hearing speed limits in places like Montana are 80mph? That sounds like a fun trip to me.

BTW I think that my parents are going to keep paying for my car insurance while I’m finishing up college. They won’t be paying for college as it stands right now so hey better than nothing! I’m definitely not obsessed with a new car smell, but I was wondering for example about foreign cars. If I want to buy another car in 3-4 years I was thinking it should probably be something with a little more space than what I have right now - and I like european sedans. Isn’t it better to buy something like an Audi or BMW new because it will come with a warranty? Or maybe CPO is the way to go if possible because German cars depreciate a ton as soon as you drive them off the lot.

Hahaha @Nrdsb4

https://www.youtube(dot)com/watch?v=70XMW2fxHtQ

It’s 2 Chainz with the most expensive kittens I’ve ever heard of. But no, I’m a dog person :slight_smile:

@3puppies I’m somewhere in the middle. I definitely would not want to buy a car that would put me in debilitating debt, but I would rather have a nicer car to drive at home, and stay in a less nice hotel during my whole vacation - maybe even an airbnb.

@philbegas:
Places in Montana used to have no speed limit, it basically was based on conditions, and even in the days of the 55 limit they used to do things like let people buy ticket books at 5 bucks a ticket, and if caught speeding, could use that to plead guilty on the spot (they had to enforce the 55, but they did, just simply made the penalties small), I believe they have at least higher limits, or if they don’t, they don’t really enforce them all that much:).

It is true that to get people to buy them Audi and BMW have programs where they pay for routine maintainence the first couple of years, but to be honest I never saw that as being a big deal, it isn’t that expensive and with what you lose from depreciation, not so sure it is worth it (some dealers will do the same thing for a certified used car). Most cars come with a 3 year, 36000 mile bumper to bumper warranty which you wouldn’t get if you bought it late model used (you may be able to transfer that if the car is less than 3 yrs old/3000 miles, not sure). On the other hand, at least BMW’s are pretty reliable (I am not a fan of Audi’s, never have been) so the odds are anything that broke like that was already fixed. Most of the cars have a longer powertrain warranty, which is the really expensive stuff (transmission and engine), and you likely would get something like that on a certified used car.

Short Answer: Wait until your student loans are paid off until splurging on a new car. Most cars should be good for 150k-200k miles, lasting you well past undergrad.

Longer Answer: It makes no sense to assume everyone should be pay X% of their money on a car. It all depends on how it fits into your overall budget and what trade-offs you’re willing to make. Some people might be happy living in a box, eating nothing but ramen, and never traveling as long they could drive a new Z4. That’s not a trade-off I would make, but one answer isn’t necessarily right or wrong, as long as you’re paying down debt and saving for a house and retirement. The higher up the income ladder you go, a higher percentage of your income can be allocated to discretionary expenses. Head over to https://www.bogleheads.org/ and they’ll give some good advice on how to structure your overall financial situation, although they sometimes run toward the frugal side.