With what salary can I comfortably afford a $60,000 car (a BMW M6 2010 convertible)?
These answers are complicated and I don't think they tell you what you want to know. First off, let me tell you the answer based on new cars, because it's much simpler.As a general rule, you never want to spend more than 20% of your monthly income, after taxes, on car payments. If you factor in closing costs, which vary by location (I used $197, which is what we used at my dealership), a nice 3% interest rate (really hard to get), a 60 month loan term (to make the math easier), and sales tax of 6.75% (in my state), a $60,000 car will bring about a $1200 monthly payment, with no downpayment and no trade-in. Multiply this by 5 and you need to make at least $6000 a month, after taxes. This next part is incredibly simplified, and may not apply to your situation directly.Okay, so taxes are marginal: The first $9225 is taxed at 10%The next $28225 is taxed at 15%The next $53300 is taxed at 25%Total taxes on $90750 is $18481.25That leaves $72,268.75 per year, divided by 12 is about $6022 per month.So, to afford a $60,000 new car, you need to make around $90,750 a year. At least, I would. Your situation will almost certainly be different.Now, remember that this only applies to NEW cars. Used cars are an entirely different story. If you have stellar credit and low expenses, a bank might lend you the $60000 on your $90750 salary, but, since the car is older, we (and the banks) expect it to need more upkeep than a new one. For this reason, it is harder to get a loan, and it should be, unless you have a cushion between the car payment and your maximum. I would say an extra income of $25k per year ought to cover the difference, so about $115,000 - about the price of a brand new M6. But hey, selling cars, I've seen some crazy shxt happen. I've seen people making $100,000 a year get turned down for a $30,000 car loan, and people who make $25,000 a year get approved for a $70,000 truck. There's really a huge amount of factors. What I've found on the internet is that if your rent and bills are approximately 1/3 of your post-tax monthly income, and your payment is 1/5, you should be squarely in a comfortable existence. By my calculations, you should be comfortable with $60,000 car and a $90,750 salary.tldr; $90750
Why do people buy cars when they can't afford them?
One of the biggest reasons that people will purchase cars that they cannot afford is that people underestimate the cost of ownership of their new vehicles.For one thing, car prices are presented to them in a way that hides the true cost, in the form of a long term loan. Often, dealerships will show you the price of a car in the form of either a monthly, biweekly, or a similar rate. For example, a $40000 car would be presented as $280 a month for 8 years. This price seems much more appealing than the actual $40000 price tag, making the car seem cheaper.Additionally, a $40000 car costs WAY more than $40000 over 8 years due to interest on the loan, insurance, and maintenance. For one thing, the loan one takes on the car will have interest. The rate varies based on ones credit but expect to pay a couple thousand on top of the MSRP of the car. Furthermore, if you want to insure your new car, you have to pay a higher insurance rate as you car costs more to replace. Finally, your new car, with mild use, will definitely need maintenance on something within 8 years. All these things come together to make you car much more than you had anticipated.In no way do I think dealers are at fault, in fact the workers in dealers have to sell cars to make money as many of them work on commission. Rather, the reason people buy cars that are more expensive than they can afford is because they are financially illiterate and assume that their monthly fee is the only cost of owning their new car.
Can I afford a $40,000 car on a $30,000 salary?
Auto finance is what I do for a living and the answer is most likely no. $30,000.00 / 12 = $2,500.00 a month. Auto lenders only allow 20% of your gross income for payments so that would cap you at $500.00 a month. The rule of thumb is $20.00 to $25.00 per thousand financed so your payments would be between $800.00 and $1,000.00. So without a very large down payment you will not budget for the payments on a $40,000.00 vehicle. Good luck. Good luck.
How can young people afford these things.?
I always see people under 25 that own their own house, have nice cars and wear expensive clothes. Are there really that many people that just have $200,000 lying around that they can buy a house with, and another $40,000 to buy a car with. I am 26, and I don't have $240,000 in cash just sitting there to buy stuff with. Where do they get this money from?
Can i afford a 40,000$ vehicle making 50,000$ per year?
Auto finance is what I do for a living and math wise yes you can as long as your credit is good enough to get a good interest rate. $50,000.00 a year is $4,166.00 a month and auto lenders allow up to 20% of monthly income for a payment so you would qualify for $833.00 a month which should be enough as long as your interest rate is good. Additional information; 3-thumbs down, give me a break. I did not say it was a good idea people, all I did was answer the persons question truthfully.
Getting a $40,000 car loan at the age of 20?
you can try but i can almost guarantee you with absolute certainty that no bank or financing company will approve you for that amount. Your 20 years old strike one most banks won't approve anything over 20k unless your 25 (show your responsible) Im assuming since your 20 you have only had your credit cards for 2 years thats strike two. You haven't had credit long enough to approve a 40k car loan. Unless you have a credit score of 715 + most banks can't approve, not they won't but they can't approve you for anything (except student loans) above 10k. I'm assuming since you didn't put it in your not paying rent, not paying phone bills, basically it will look like your still dependent on your parents. On the very slim chance that you do get approved they will make you have one if not two co signers. Your best bet would be apply for the loan under your dads name.
How much should i put on down payment for a $40,000 car?
No, you don't have it all figured out. You're 16, and you work at McDonalds (or so you stated in a previous question). http://answers.yahoo.com/question/index;... First and foremost, you cannot enter into a legally binding contract until you turn 18. This means you cannot buy a car, register it, or obtain insurance. Second, you're asking about a $40,000 car. A $40,000 vehicle, plus tax ($3,200 - estimated at 8%), title and license ($600 - estimated at 1.5%), will give you a total amount financed of $43,800. If your parents had perfect credit, and they bought it for you, then your payments would be $846 (6% interest, for 60 months). You would need to have full coverage insurance, so, considering the price of the vehicle, and your age, expect no less that $400 per month. In addition, the average driver in the US spends approximately $250 per month on gas. On top of that, you need to consider incidentals (oil changes, tires, maintenance, and upkeep), so let's estimate another $50 per month. Just the regular expenses on this car would be $1,546. If you worked 40 hours per week at minimum wage, you would make a total of $1,266.67 per month (before taxes). Your net (take home, after taxes) pay would be $879.67. In order to get this car to where you can afford it, you would need your parents to pay the insurance. Then, you would have $579 to spare. you would need to put down $14,000, to get a payment of $576 for 60 months. Something else you should know, for future reference. Banks loan money based on your "debt to net" ratio, which is how much you bring in versus how much you pay out. Lenders will not approve you for a payment which exceeds 25% of your net pay. In your case, at minimum wage, your max payment would be $219.92. To get this kind of payment, you would need to put down a total of $33,000, to get a $208 payment. even with this payment, plus gas, and incidentals, your expenses would be at $508 per month, just on this car. Sorry man, even if you were old enough, there is no way you could possibly afford this car. None. At all... Sorry I don't have better news.