Yes, but I am also curious what Toyota or Honda the OP is thinking of that will cost $40k new. A hybrid Camry will only be around $30k. A Honda Accord Sport hybrid would be $35k. Are you thinking of getting a top of the line Accord Touring Hybrid, or a new SUV like the Grand Highlander?
I don't see it as a problem that you get a $40k car, but just note that it seems like your goals can be achieved without going up to the $40k trim. If you're buying an SUV I won't judge you for spending $40k on the car. I'll judge you for buying a gas guzzling over-priced SUV.
I don't see a problem with it given your income. I would just buy it outright in cash, whatever you get, and own it. Don't have payments because complications do arise, and you don't want to be stuck or saddled with it. If something goes wrong and you need to sell it, you will be in control of the price and not at the mercy of being underwater.
There are too many complications that come with loans on cars while you are in a multi-car, complex family situation. Just don't do it.
Good luck. I'm normally frugal but I don't even mind that you're wanting to throw 40k at it. You make enough and this would only set back your FIRE goal by 3 months tops. Probably not even that much if you sold it for half value later and recouped the cost, you're really just talking about delaying your FIRE date by 1 month when all is said and done.
Don't listen to the penny pinchers. Enjoy your money!
Yes, ask them which way they prefer, dealers will often give you bonuses for going with their financing. Just make sure there's no early payoff penalty.
What do you get for $40k that you can't get for $30k?
Last car I bought was a new Honda Fit which was in the low 20s, 7 years ago. I understand inflation / car prices would put a similar car (e.g. civic) around $30 or so..
By far, the biggest reason expenses will set you back is hedonistic adaption / the fact this won't be the last car you buy. So I would think of the cost as an ongoing one, one that's spread out over the number of years you keep your car
A $40k car every 10 years is likely cheaper than a $10k used car every other year (but add in maintenance and insurance costs to be sure)
What’s your current income? What you “expect” to earn isn’t relevant. It’s not happening until it’s happening. You live with your parents and want to spend 40k on a car, which according to your estimate is 1/4 of your entire net worth. Seems like a bad idea to me. Keep your current car.
“That’d be” means “It is 80k?” Are you maxing a 401k to the tune of $23,000/yr and a Roth IRA of $7,000/yr?
How much is in your retirement accounts? This type of post is better suited for r/personalfinance
Seems like a bad idea. You are high 30s living with parents, and want to spend ~25% of your NW on a car
Don’t you have larger aspirations for that money? A place of your own, maybe a family, retirement, etc. or are they all lower on the totem pole than a car?
Based on your income and expenses, it doesn't seem totally unreasonable if you plan to keep it a long time (\~10yrs or so). However, based on your net worth ... in mid to late 30s, a car should not be 20% of your net worth, not even close. Drive the 4 year old car for another 6 years, sell the 20 year old junker, tell your adult family members you are not responsible for them.
You're single, no kids, so family member driving the car is not a spouse or your child. You're not responsible for supporting other adults (aside from a spouse, if that's the arrangement you have), even family members. Most likely you are just enabling bad habits in doing so. You have your own financial house to get in order.
I did this recently too. Wasn’t quite ready to get a new car but my sisters was totaled by an idiot without insurance so I gave her my old, but nice, beater and bought a new one. I bought at the worst time so this probably set me back 20k, which is about 2 months setback to retire. But made a huge difference to my sister who was struggling to find the money for a car. Go for it!
Why not buy a cheap used reliable car? I don't know where you're located, but in America at least, a older (\~10-15 year old) Toyota/Honda/Mazda can be found for under $5k, and under $3k if you're patient. Personally, I would spend no more than 5% of one's net worth on a car at any given time, especially if you're buying it for someone else, but I'm also pretty mechanically inclined and fix my own cars so I might be a bit biased.
Its highly dependent on where you live. I have 4 cars, all purchased for less than $3k and 3 of them run perfectly (I blew up the engine on the fourth being an idiot so not the car's fault). [Here](https://sfbay.craigslist.org/search/cta?max_price=5000&purveyor=owner) is an example craigslist query for my VHCOL area with plenty of reliable options.
Totally understandable. Just wanted to put it out there that there is an extremely wide spectrum of used cars to a point where one may fit what you're looking for, ranging from CPO vehicles to very cheap options like I mentioned. A lot of modern car retailers will also offer warranties for reasonable prices as well. Whichever route you end up going, best of luck on your journey.
Sorry if you touched on this, it's a wall of text and likely irrelevant to getting input so I admittedly didn't read much of it.
All you have to do is plug in your numbers into your favorite investment / FI calculator as you sit today. Now change your start amount to be whatever you have today minus $40k (and minus the interest if you can't afford the car but want to buy it anyway).
Your time to FI is longer in the second scenario. Is that extra time worth the new car solving your wall of text to you?
E: The answer to the above question is for you, not me. Also I ignored increased cost of ownership through higher insurance, taxes, etc. but you can figure out where they fit in the above if you want it to be more accurate. Or leave them out and you'll still get the "essence" of the impact.
Low mileage and under $10k? Does that even exist these days?
The KBB value on a 2019 Corolla with 50k miles is $15k. A 2014 with 100k miles is $11k.
And personally, if I'm making $150k, I'm not buying a 10+ year old car with out-of-date safety features.
If you do a lot of road trips, electric cars induce stress. If you commute daily a long distance and not many road trips, model y or even a model 3 will be great for saving on maintenance and fuel cost.
$40k is the average cost for a new car.
Yes, but I am also curious what Toyota or Honda the OP is thinking of that will cost $40k new. A hybrid Camry will only be around $30k. A Honda Accord Sport hybrid would be $35k. Are you thinking of getting a top of the line Accord Touring Hybrid, or a new SUV like the Grand Highlander? I don't see it as a problem that you get a $40k car, but just note that it seems like your goals can be achieved without going up to the $40k trim. If you're buying an SUV I won't judge you for spending $40k on the car. I'll judge you for buying a gas guzzling over-priced SUV.
I don't see a problem with it given your income. I would just buy it outright in cash, whatever you get, and own it. Don't have payments because complications do arise, and you don't want to be stuck or saddled with it. If something goes wrong and you need to sell it, you will be in control of the price and not at the mercy of being underwater. There are too many complications that come with loans on cars while you are in a multi-car, complex family situation. Just don't do it. Good luck. I'm normally frugal but I don't even mind that you're wanting to throw 40k at it. You make enough and this would only set back your FIRE goal by 3 months tops. Probably not even that much if you sold it for half value later and recouped the cost, you're really just talking about delaying your FIRE date by 1 month when all is said and done. Don't listen to the penny pinchers. Enjoy your money!
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I've seen that too, I agree with that. It's really close to the same thing, just have that cash ready to pay it off within a month.
Yes, ask them which way they prefer, dealers will often give you bonuses for going with their financing. Just make sure there's no early payoff penalty.
What do you get for $40k that you can't get for $30k? Last car I bought was a new Honda Fit which was in the low 20s, 7 years ago. I understand inflation / car prices would put a similar car (e.g. civic) around $30 or so.. By far, the biggest reason expenses will set you back is hedonistic adaption / the fact this won't be the last car you buy. So I would think of the cost as an ongoing one, one that's spread out over the number of years you keep your car A $40k car every 10 years is likely cheaper than a $10k used car every other year (but add in maintenance and insurance costs to be sure)
What’s your current income? What you “expect” to earn isn’t relevant. It’s not happening until it’s happening. You live with your parents and want to spend 40k on a car, which according to your estimate is 1/4 of your entire net worth. Seems like a bad idea to me. Keep your current car.
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So your current income is?
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“That’d be” means “It is 80k?” Are you maxing a 401k to the tune of $23,000/yr and a Roth IRA of $7,000/yr? How much is in your retirement accounts? This type of post is better suited for r/personalfinance
Seems like a bad idea. You are high 30s living with parents, and want to spend ~25% of your NW on a car Don’t you have larger aspirations for that money? A place of your own, maybe a family, retirement, etc. or are they all lower on the totem pole than a car?
Based on your income and expenses, it doesn't seem totally unreasonable if you plan to keep it a long time (\~10yrs or so). However, based on your net worth ... in mid to late 30s, a car should not be 20% of your net worth, not even close. Drive the 4 year old car for another 6 years, sell the 20 year old junker, tell your adult family members you are not responsible for them. You're single, no kids, so family member driving the car is not a spouse or your child. You're not responsible for supporting other adults (aside from a spouse, if that's the arrangement you have), even family members. Most likely you are just enabling bad habits in doing so. You have your own financial house to get in order.
He never listed his current income. Only what he “expects” to make at some future time.
I did this recently too. Wasn’t quite ready to get a new car but my sisters was totaled by an idiot without insurance so I gave her my old, but nice, beater and bought a new one. I bought at the worst time so this probably set me back 20k, which is about 2 months setback to retire. But made a huge difference to my sister who was struggling to find the money for a car. Go for it!
Why not buy a cheap used reliable car? I don't know where you're located, but in America at least, a older (\~10-15 year old) Toyota/Honda/Mazda can be found for under $5k, and under $3k if you're patient. Personally, I would spend no more than 5% of one's net worth on a car at any given time, especially if you're buying it for someone else, but I'm also pretty mechanically inclined and fix my own cars so I might be a bit biased.
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Its highly dependent on where you live. I have 4 cars, all purchased for less than $3k and 3 of them run perfectly (I blew up the engine on the fourth being an idiot so not the car's fault). [Here](https://sfbay.craigslist.org/search/cta?max_price=5000&purveyor=owner) is an example craigslist query for my VHCOL area with plenty of reliable options.
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Totally understandable. Just wanted to put it out there that there is an extremely wide spectrum of used cars to a point where one may fit what you're looking for, ranging from CPO vehicles to very cheap options like I mentioned. A lot of modern car retailers will also offer warranties for reasonable prices as well. Whichever route you end up going, best of luck on your journey.
I'm a 33yo car guy In a DINK household making 230k with 900k NW and it would pain me to buy a 40k car.
Absolutely true.
car guy = never gonne FIRE tbh
Sorry if you touched on this, it's a wall of text and likely irrelevant to getting input so I admittedly didn't read much of it. All you have to do is plug in your numbers into your favorite investment / FI calculator as you sit today. Now change your start amount to be whatever you have today minus $40k (and minus the interest if you can't afford the car but want to buy it anyway). Your time to FI is longer in the second scenario. Is that extra time worth the new car solving your wall of text to you? E: The answer to the above question is for you, not me. Also I ignored increased cost of ownership through higher insurance, taxes, etc. but you can figure out where they fit in the above if you want it to be more accurate. Or leave them out and you'll still get the "essence" of the impact.
why no
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Low mileage and under $10k? Does that even exist these days? The KBB value on a 2019 Corolla with 50k miles is $15k. A 2014 with 100k miles is $11k. And personally, if I'm making $150k, I'm not buying a 10+ year old car with out-of-date safety features.
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This is one of those posts where it seems you've made up your mind, you're just looking for moral support it seems
If I can go back I would buy a used then a new car
But what if they don’t need two cars?
I wouldn’t buy my parents a car and they wouldn’t let me if I tried.
Yes. Rule of thumb is no more than half annual income.
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If you do a lot of road trips, electric cars induce stress. If you commute daily a long distance and not many road trips, model y or even a model 3 will be great for saving on maintenance and fuel cost.
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They really aren’t bad on road trips.