Author Topic: MSN Article: How Much Car Can You Afford?  (Read 11087 times)

LivingTheory

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MSN Article: How Much Car Can You Afford?
« on: July 15, 2015, 12:17:03 PM »
The basic gist seems to be that your entire paycheck needs to be spent. Evidenced by the fictitious renter having "money available for debt".  Let's not even start on how off-base the take home calculation seems and the absurdity of owning a home 5x annual gross.  This whole article should be titled: How Normal Feels.

http://www.msn.com/en-us/autos/buying/how-much-should-you-spend-on-a-car/ar-AActeGx

jinga nation

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Re: MSN Article: How Much Car Can You Afford?
« Reply #1 on: July 15, 2015, 12:27:30 PM »
It is the new Normal.

Stop harshing the debt buzz.

Savers are boring.

/s

Chris22

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Re: MSN Article: How Much Car Can You Afford?
« Reply #2 on: July 15, 2015, 01:16:14 PM »
I'm a big car guy, so I believe in paying a little more for a car for myself because it's something I want, but when I read the average new car costs $33k it blows me away.  I paid about $30k (inc. TTL) for my last car for me, and ~$40k for my last car for my wife, but we make 4-5x the average HHI in the US.  So the fact that we are that far above average for income, but not very far at all above average for price paid for a car, is obscene to me.  I literally don't understand how many others do it. 

GatewayTwo

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Re: MSN Article: How Much Car Can You Afford?
« Reply #3 on: July 15, 2015, 01:23:19 PM »
... I literally don't understand how many others do it.

Step 1:  Get Big Wheels
Step 2:  Get a bigger stereo
Step 3:  Gold plate entire car

Voila!  Instant expensive car

zephyr911

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Re: MSN Article: How Much Car Can You Afford?
« Reply #4 on: July 15, 2015, 02:07:32 PM »
the absurdity of owning a home 5x annual gross
Holy Actual Fuck, guys. How is that even a thing?

Even as a profligate 20-something buying my first house, I paid less than 2x gross, and it still felt like way too much.

Now? Less than a year's wages. Mortgage is 4% of gross.

Avidconsumer

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Re: MSN Article: How Much Car Can You Afford?
« Reply #5 on: July 15, 2015, 02:08:36 PM »
The basic gist seems to be that your entire paycheck needs to be spent. Evidenced by the fictitious renter having "money available for debt".  Let's not even start on how off-base the take home calculation seems and the absurdity of owning a home 5x annual gross.  This whole article should be titled: How Normal Feels.

http://www.msn.com/en-us/autos/buying/how-much-should-you-spend-on-a-car/ar-AActeGx

This article wasn't that bad. It seemed conservative by national standards.

Chris22

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Re: MSN Article: How Much Car Can You Afford?
« Reply #6 on: July 15, 2015, 02:28:26 PM »
the absurdity of owning a home 5x annual gross
Holy Actual Fuck, guys. How is that even a thing?

Even as a profligate 20-something buying my first house, I paid less than 2x gross, and it still felt like way too much.

Now? Less than a year's wages. Mortgage is 4% of gross.

Yup.  Our current house is ~1.6x annual salary.  Both of our houses together is about 3x salary, and THAT gives me fits though we don't actually pay one of the two mortgages (rented out).

Apocalyptica602

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Re: MSN Article: How Much Car Can You Afford?
« Reply #7 on: July 15, 2015, 02:45:43 PM »
What was that rule of thumb? Half our annual salary?

...brb going to the Tesla dealership. *eye-roll... little drool too... but mostly eye-roll.*

zephyr911

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Re: MSN Article: How Much Car Can You Afford?
« Reply #8 on: July 15, 2015, 03:08:51 PM »
What was that rule of thumb? Half our annual salary?

...brb going to the Tesla dealership. *eye-roll... little drool too... but mostly eye-roll.*
I know I'm gonna invite facepunches to hell and back, but that's gonna be the last dream of mine that MMM kills, and I may actually get one before it happens. There are days when I care more about eliminating the last little bit of fossil fuel use from my life than I do about FIRE. But so far I just keep convincing myself long-term changes matter more than doing that one thing right now, and I can do more good in the long term if I get filthy rich and THEN devote my life to such things.

Chris22

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Re: MSN Article: How Much Car Can You Afford?
« Reply #9 on: July 15, 2015, 03:19:19 PM »
What was that rule of thumb? Half our annual salary?

...brb going to the Tesla dealership. *eye-roll... little drool too... but mostly eye-roll.*
I know I'm gonna invite facepunches to hell and back, but that's gonna be the last dream of mine that MMM kills, and I may actually get one before it happens. There are days when I care more about eliminating the last little bit of fossil fuel use from my life than I do about FIRE. But so far I just keep convincing myself long-term changes matter more than doing that one thing right now, and I can do more good in the long term if I get filthy rich and THEN devote my life to such things.

Quite frankly, I could give a shit about the environment, and the constant twisting of facts to support the pseudo-hidden agenda pisses me off to no end.

That said, I'd kill for a P85D because the acceleration will rip your face off.

CoreyTheMan

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Re: MSN Article: How Much Car Can You Afford?
« Reply #10 on: July 15, 2015, 04:33:23 PM »
What was that rule of thumb? Half our annual salary?

...brb going to the Tesla dealership. *eye-roll... little drool too... but mostly eye-roll.*
I know I'm gonna invite facepunches to hell and back, but that's gonna be the last dream of mine that MMM kills, and I may actually get one before it happens. There are days when I care more about eliminating the last little bit of fossil fuel use from my life than I do about FIRE. But so far I just keep convincing myself long-term changes matter more than doing that one thing right now, and I can do more good in the long term if I get filthy rich and THEN devote my life to such things.

Quite frankly, I could give a shit about the environment, and the constant twisting of facts to support the pseudo-hidden agenda pisses me off to no end.

That said, I'd kill for a P85D because the acceleration will rip your face off.
MOD NOTE: PERSONAL ATTACK REMOVED. Please refer to our forum rules.
« Last Edit: July 15, 2015, 08:58:59 PM by swick »

Chris22

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Re: MSN Article: How Much Car Can You Afford?
« Reply #11 on: July 15, 2015, 06:03:42 PM »
What was that rule of thumb? Half our annual salary?

...brb going to the Tesla dealership. *eye-roll... little drool too... but mostly eye-roll.*
I know I'm gonna invite facepunches to hell and back, but that's gonna be the last dream of mine that MMM kills, and I may actually get one before it happens. There are days when I care more about eliminating the last little bit of fossil fuel use from my life than I do about FIRE. But so far I just keep convincing myself long-term changes matter more than doing that one thing right now, and I can do more good in the long term if I get filthy rich and THEN devote my life to such things.

Quite frankly, I could give a shit about the environment, and the constant twisting of facts to support the pseudo-hidden agenda pisses me off to no end.

That said, I'd kill for a P85D because the acceleration will rip your face off.

You should teach me how to be a selfish prick like you are.

Sure. Live in a small house that's extremely energy efficient because it's well built and insulate, and live close to work so you have a short commute and don't use a lot of gas, and then ignore people who scream about superficial garbage like driving an SUV is killing the earth. That's what bugs me, the mentality that all SUVs are awful, no matter the usage and if you ever buy one you're going to be bankrupt earth killers. Never mind that an SUV drive 4 miles is a lot better than a Prius driven 50, it's all about the illusion.

zephyr911

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Re: MSN Article: How Much Car Can You Afford?
« Reply #12 on: July 16, 2015, 07:07:25 AM »
How about let's not be dicks? Not sure where that came from.

I've got no problem with varying levels of concern over spotted owls and such, but on some level we all need a givashit. "The environment" isn't a faraway abstract; it includes the air you're breathing right now and the water you drink, which you'd have to hate yourself pretty hard not to care about at all.

zephyr911

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Re: MSN Article: How Much Car Can You Afford?
« Reply #13 on: July 16, 2015, 07:48:52 AM »
Follow-up:

You're absolutely right about 4 miles in an SUV vs. 50 miles in a Prius, but how often is that the choice? Yes, it is a case of multiplication - both the miles driven and the impact/cost per mile are relevant. But I have yet to see a case where switching to a more efficient vehicle produced more mileage. Most people are going to drive the same regardless, so with all else being equal, the vehicle choice matters.

The primary reason for the pervasive negativity about SUVs here is the common habit in the U.S. today of making poor choices on both sides - driving large inefficient vehicles long distances with little or no cargo, and often only 1-2 humans. That's obviously bad for both finances and air quality. I don't think SUVs are dumb in general but the way most people use them clearly is. It's all about the right tool for the job.

As your analysis indicates, the obvious choice for most personal transport is to drive an efficient vehicle AND drive it as little as possible.

teadirt

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Re: MSN Article: How Much Car Can You Afford?
« Reply #14 on: July 16, 2015, 09:26:53 AM »
Quote
Let’s take a look at each of these rules and how they impact how much someone making $50,000 per year can afford to spend on a new car. We’ll assume that this person pays 11.64 percent of their income in taxes, leaving them with $44,180 in net pay each year.

What? Maybe if you don't include social security and state income taxes. I make about this much and my withholding is more like 24%.

The rest of the numbers in the article don't seem realistic either. I call bs. For example, they claim that owning a car costs $275 in monthly operating costs! Although I guess if you buy the $18,000 SUV they recommend (Ha! I couldn't imagine spending this much on a vehicle while making $50k), get maintenance done at the dealer and drive it 50 miles to work every morning, maybe your costs would be higher...

nobodyspecial

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Re: MSN Article: How Much Car Can You Afford?
« Reply #15 on: July 18, 2015, 10:10:16 AM »
the absurdity of owning a home 5x annual gross
Holy Actual Fuck, guys. How is that even a thing?



That was a year ago, prices are rising 8% a year and the rate is likely to double now that Canada cut interest rates.

maizeman

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Re: MSN Article: How Much Car Can You Afford?
« Reply #16 on: July 20, 2015, 07:17:22 AM »
I'm a big car guy, so I believe in paying a little more for a car for myself because it's something I want, but when I read the average new car costs $33k it blows me away.  I paid about $30k (inc. TTL) for my last car for me, and ~$40k for my last car for my wife, but we make 4-5x the average HHI in the US.  So the fact that we are that far above average for income, but not very far at all above average for price paid for a car, is obscene to me.  I literally don't understand how many others do it.

I see what you're saying, but I do want to make the point that the average price for a new car is quite different from the average price paid for a car. I found various estimates that the average price for used cars is between $14,500-$18,000 which still seems ridiculously high, but less so. And houses with incomes at or below the median are more likely to be buying used cars than new ones. In 2011 (the most recent year for which I could find data) almost 3/4th of new car were bought by households with incomes above the median.

nobodyspecial

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Re: MSN Article: How Much Car Can You Afford?
« Reply #17 on: July 20, 2015, 12:14:54 PM »
Quote
I'm a big car guy, so I believe in paying a little more for a car for myself because it's something I want, but when I read the average new car costs $33k it blows me away.
Always question the statistics.
"Average new car cost" sounds like the sort of number that would be collected by manufacturers/dealers rather than a national statistic office or university. So it's in their interest to make it sound as high as possible, so you feel you should be paying that. Even without outright lying it's easy to list invoice$ and ignore special deals and include fees and taxes  etc etc.

Same with used cars, data from brand name main dealers is included, back street lots selling $300 clunkers isn't

bloomability

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Re: MSN Article: How Much Car Can You Afford?
« Reply #18 on: July 21, 2015, 11:54:04 AM »
4% sales tax? In what world?

It was 8.625% where I lived in Colorado.

At least the article was pushing for a 60 month term instead of 72 or 84 months.

cautiouspessimist

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Re: MSN Article: How Much Car Can You Afford?
« Reply #19 on: July 21, 2015, 12:20:07 PM »
4% sales tax? In what world?

It was 8.625% where I lived in Colorado.

At least the article was pushing for a 60 month term instead of 72 or 84 months.

The tax rate on car purchases is usually less than the sales tax on other items. Here in VA, it's 4.05%, whereas the tax on goods is over 6%.

Jack

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Re: MSN Article: How Much Car Can You Afford?
« Reply #20 on: July 21, 2015, 01:38:44 PM »
*eye-roll... little drool too... but mostly eye-roll.*

You should probably see a doctor about that. ; )

the absurdity of owning a home 5x annual gross
Holy Actual Fuck, guys. How is that even a thing?



That was a year ago, prices are rising 8% a year and the rate is likely to double now that Canada cut interest rates.

So what? It's imaginary bubble inflation. Buying a house in Vancouver is speculation, not prudent finance. The thing that gets me is that it's irresponsible for banks to lend at such stupid debt-to-income ratios (and irresponsible for Canada's government to allow it).

My wife and I bought a house at 3x annual gross, but that's because I'd just graduated college and didn't have a job yet (intentionally, so that we'd qualify for gov't down-payment assistance). Including my (expected) job, it was more like 1x annual gross.

beltim

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Re: MSN Article: How Much Car Can You Afford?
« Reply #21 on: July 21, 2015, 01:41:50 PM »
*eye-roll... little drool too... but mostly eye-roll.*

You should probably see a doctor about that. ; )

the absurdity of owning a home 5x annual gross
Holy Actual Fuck, guys. How is that even a thing?

That was a year ago, prices are rising 8% a year and the rate is likely to double now that Canada cut interest rates.

So what? It's imaginary bubble inflation. Buying a house in Vancouver is speculation, not prudent finance. The thing that gets me is that it's irresponsible for banks to lend at such stupid debt-to-income ratios (and irresponsible for Canada's government to allow it).

My wife and I bought a house at 3x annual gross, but that's because I'd just graduated college and didn't have a job yet (intentionally, so that we'd qualify for gov't down-payment assistance). Including my (expected) job, it was more like 1x annual gross.

You don't have to go to crazy Vancouver markets to see markets where it's nigh-impossible to buy a house at, say, 2x gross household income.

MsPeacock

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Re: MSN Article: How Much Car Can You Afford?
« Reply #22 on: July 21, 2015, 02:47:40 PM »
DC being an example - unless you make 250k per year, you aren't buying a house at 2x annual gross. House in outlying suburbs in ok (and worse) areas start at 500k and run very quickly upward (this is for an not-updated 3/1 built in the 1950s). Many areas have nothing below 800k- 1 million.

zephyr911

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Re: MSN Article: How Much Car Can You Afford?
« Reply #23 on: July 21, 2015, 02:52:09 PM »
DC being an example - unless you make 250k per year, you aren't buying a house at 2x annual gross. House in outlying suburbs in ok (and worse) areas start at 500k and run very quickly upward (this is for an not-updated 3/1 built in the 1950s). Many areas have nothing below 800k- 1 million.
I don't dispute that it's hard for the average person to find a house for 2x gross in some markets. And 2x isn't terrible, if you keep your costs down in other areas. It was the 5x figure that blew my fucking mind. Even if you have no other debt and can somehow qualify for that, it's such a Very Bad Idea that anyone at a financial institution issuing such a loan should be beaten severely about the face. It's a bad investment for the bank and a bad gamble for the consumer. You're talking about getting two checks a month and sending one to the mortgage before you eat, drive, insure anything, or make a phone call. Add in the typical person's consumptive habits and it's a recipe for disaster.

beltim

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Re: MSN Article: How Much Car Can You Afford?
« Reply #24 on: July 21, 2015, 03:00:38 PM »
DC being an example - unless you make 250k per year, you aren't buying a house at 2x annual gross. House in outlying suburbs in ok (and worse) areas start at 500k and run very quickly upward (this is for an not-updated 3/1 built in the 1950s). Many areas have nothing below 800k- 1 million.
I don't dispute that it's hard for the average person to find a house for 2x gross in some markets. And 2x isn't terrible, if you keep your costs down in other areas. It was the 5x figure that blew my fucking mind. Even if you have no other debt and can somehow qualify for that, it's such a Very Bad Idea that anyone at a financial institution issuing such a loan should be beaten severely about the face. It's a bad investment for the bank and a bad gamble for the consumer. You're talking about getting two checks a month and sending one to the mortgage before you eat, drive, insure anything, or make a phone call. Add in the typical person's consumptive habits and it's a recipe for disaster.

The median income is about $50k.  A $250k house with 20% down would have a monthly payment (not including taxes) of about $950.  This is just 23% of gross income, and a married couple with household income of $50k would be pay relatively low taxes.

That's not a bad investment, and it's certainly not a gamble.
« Last Edit: July 21, 2015, 03:04:20 PM by beltim »

beltim

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Re: MSN Article: How Much Car Can You Afford?
« Reply #25 on: July 21, 2015, 03:15:13 PM »
You can look at a wide variety of cities' median house price to median household income ratios here:
http://www.forbes.com/sites/zillow/2013/04/16/high-home-price-to-income-ratios-hiding-behind-low-mortgage-rates/


slugline

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Re: MSN Article: How Much Car Can You Afford?
« Reply #26 on: July 21, 2015, 03:53:25 PM »
The median income is about $50k.  A $250k house with 20% down would have a monthly payment (not including taxes) of about $950.  This is just 23% of gross income, and a married couple with household income of $50k would be pay relatively low taxes.

That's not a bad investment, and it's certainly not a gamble.

A down payment equal to an entire year of gross income? I suppose it's not a big deal if it was accumulated through a Mustachian lifestyle. Otherwise, I can't help but wonder if gifts would be involved for non-Mustachians to reach this sum, and if that's the case, whether the housing costs are sustainable. That $950 doesn't account for insurance or property taxes. (Last I checked, property taxes don't scale with income where I live!). That monthly housing cost is more realistically approaching $1300.

nobodyspecial

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Re: MSN Article: How Much Car Can You Afford?
« Reply #27 on: July 21, 2015, 04:00:48 PM »
So what? It's imaginary bubble inflation. Buying a house in Vancouver is speculation, not prudent finance.
I was responding to a zephyr's comment about how can you spend 5x income on a house. In this city 5x joint income is about the minimum to get a house. I wasn't saying it was a good idea - the graph just showed how crazy house prices are here.

Quote
The thing that gets me is that it's irresponsible for banks to lend at such stupid debt-to-income ratios
That's a business decision - profits from interest payment vs losses from foreclosures. If the banks never loaned money to people who probably shouldn't borrow they would all be broke !

Quote
(and irresponsible for Canada's government to allow it).
That's capitalism baby - and up here there is no mortgage interest deduction AND you can't walk away from mortgage debt.
There is a compulsory extra government insurance if you have less than 10 or 20% down payment.

Quote
Including my (expected) job, it was more like 1x annual gross.
Tricky in this city - unless your first job was Warren Buffet !

beltim

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Re: MSN Article: How Much Car Can You Afford?
« Reply #28 on: July 21, 2015, 04:01:32 PM »
The median income is about $50k.  A $250k house with 20% down would have a monthly payment (not including taxes) of about $950.  This is just 23% of gross income, and a married couple with household income of $50k would be pay relatively low taxes.

That's not a bad investment, and it's certainly not a gamble.

A down payment equal to an entire year of gross income? I suppose it's not a big deal if it was accumulated through a Mustachian lifestyle. Otherwise, I can't help but wonder if gifts would be involved for non-Mustachians to reach this sum, and if that's the case, whether the housing costs are sustainable. That $950 doesn't account for insurance or property taxes. (Last I checked, property taxes don't scale with income where I live!). That monthly housing cost is more realistically approaching $1300.

Yeah, saving for a down payment is one reason home ownership is low among millennial especially in high coat of living areas.

$1300 is a bit higher than I was thinking but reasonable for a high tax area or if you include maintenance.

I'm not saying I would recommend spending 5x on a house - but I think zephyr went off the deep end saying that ruin would come to bank and homeowner at that level.  The fact is, lots of people buy at that level because that's how much it costs to get what they want where they want to live. It's definitely doable.

Jouer

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Re: MSN Article: How Much Car Can You Afford?
« Reply #29 on: July 21, 2015, 04:08:52 PM »
I'm also going to jump in here to crap on the statistic of average car price. Almost always use median when discussing something with finite floor but (near) infinite ceiling, like $$. Outliers and all that.

Of course, neither statistic is great alone when discussing car price since the difference in class of car is so large. Saying average car price is $X doesn't tell us if that is from luxury cars only of if there is a real difference in price of "regular person" cars.


cautiouspessimist

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Re: MSN Article: How Much Car Can You Afford?
« Reply #30 on: July 22, 2015, 08:47:02 AM »
DC being an example - unless you make 250k per year, you aren't buying a house at 2x annual gross. House in outlying suburbs in ok (and worse) areas start at 500k and run very quickly upward (this is for an not-updated 3/1 built in the 1950s). Many areas have nothing below 800k- 1 million.

You seem to have a strange definition of 'ok (and worse) areas'. Yes, in Arlington and Bethesda you're not going to find anything reasonable less than 450k, but Alexandria (for example) is full of houses (updated ones at that!) for around 300k. Most areas in MD are even cheaper; for good reason, I suppose. I would not live in MD if I could help it.

This post is a good example of just stating 'common knowledge' without actually doing the research.

EricP

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Re: MSN Article: How Much Car Can You Afford?
« Reply #31 on: July 22, 2015, 09:07:17 AM »
I'm also going to jump in here to crap on the statistic of average car price. Almost always use median when discussing something with finite floor but (near) infinite ceiling, like $$. Outliers and all that.

Of course, neither statistic is great alone when discussing car price since the difference in class of car is so large. Saying average car price is $X doesn't tell us if that is from luxury cars only of if there is a real difference in price of "regular person" cars.

You use the stats you have.  Median and mean car price are likely within a few thousand dollars of each other, and I've never seen a mean car price statistic, so I'm stuck using Median.  I'd love to have Median new car price but it's not readily available.  Likely because of the reasons mentioned above, that this stat is meant to drive up car prices by telling people that they're spending less than the average and Mean car price is higher than Median car price.

MsPeacock

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Re: MSN Article: How Much Car Can You Afford?
« Reply #32 on: July 22, 2015, 10:28:47 AM »
DC being an example - unless you make 250k per year, you aren't buying a house at 2x annual gross. House in outlying suburbs in ok (and worse) areas start at 500k and run very quickly upward (this is for an not-updated 3/1 built in the 1950s). Many areas have nothing below 800k- 1 million.

You seem to have a strange definition of 'ok (and worse) areas'. Yes, in Arlington and Bethesda you're not going to find anything reasonable less than 450k, but Alexandria (for example) is full of houses (updated ones at that!) for around 300k. Most areas in MD are even cheaper; for good reason, I suppose. I would not live in MD if I could help it.

This post is a good example of just stating 'common knowledge' without actually doing the research.

Hmmm.. Well, since I live here, and own a house (in apparently crappy MD) - it isn't baseless "common knowledge."  You also don't site research for your post - so I don't see why it has any more validity than my statement. Arlington might be awesome, and maybe you can find 300K houses around Columbia MD - but if you live and work is DC that sticks you with a horrendous non-mustachian commute. Not sure what you mean by "most areas" of MD you can find houses for less than 300K. I actually do pay attention to the real estate costs in my area and have a reasonable sense of what is happening. 

My point was that for many dense urban areas it is unrealistic to routinely find houses at only 2x annual income. Even 300K houses would be out of reach for most people by that income criteria.

2ndTimer

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Re: MSN Article: How Much Car Can You Afford?
« Reply #33 on: July 22, 2015, 11:03:52 AM »
Both our Honda Civics together didn't cost as much as the "average new car cost."  Guess we should have gotten them gold plated when the dealership offered it.

cautiouspessimist

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Re: MSN Article: How Much Car Can You Afford?
« Reply #34 on: July 22, 2015, 11:06:06 AM »
DC being an example - unless you make 250k per year, you aren't buying a house at 2x annual gross. House in outlying suburbs in ok (and worse) areas start at 500k and run very quickly upward (this is for an not-updated 3/1 built in the 1950s). Many areas have nothing below 800k- 1 million.

You seem to have a strange definition of 'ok (and worse) areas'. Yes, in Arlington and Bethesda you're not going to find anything reasonable less than 450k, but Alexandria (for example) is full of houses (updated ones at that!) for around 300k. Most areas in MD are even cheaper; for good reason, I suppose. I would not live in MD if I could help it.

This post is a good example of just stating 'common knowledge' without actually doing the research.

Hmmm.. Well, since I live here, and own a house (in apparently crappy MD) - it isn't baseless "common knowledge."  You also don't site research for your post - so I don't see why it has any more validity than my statement. Arlington might be awesome, and maybe you can find 300K houses around Columbia MD - but if you live and work is DC that sticks you with a horrendous non-mustachian commute. Not sure what you mean by "most areas" of MD you can find houses for less than 300K. I actually do pay attention to the real estate costs in my area and have a reasonable sense of what is happening. 

My point was that for many dense urban areas it is unrealistic to routinely find houses at only 2x annual income. Even 300K houses would be out of reach for most people by that income criteria.

I live here too. As far as citing research, just look at any of the real estate sites. Living in MD would subject me to terrible commutes. Living in Alexandria lets me live close enough to the metro to be able to take that if I do end up back in the city. And my house cost me 285k just a few years ago. I don't know where in MD you live, but just because your neighborhood has a 500k buy in doesn't mean that the whole area does. And if your point is that it's difficult to buy a house for only 2x salary, the arbitrary (and wrong) statement about not being able to do so unless you gross 250k a year isn't getting that across.

My point is that, while it is expensive here, your inflated statement about the costs is flat out wrong.

As far as my 'most of MD' statement, I have done a considerable amount of research lately into homes in that area because my office is moving in the foreseeable future, and I have found a large number of homes for well under 300k, so I guess I'm just better at looking for them than you are?

Caella

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Re: MSN Article: How Much Car Can You Afford?
« Reply #35 on: July 22, 2015, 11:07:56 AM »
There's yet another reason to buy a mustachian car, without a lot of bells and whistles.
An older/simpler car can't be hacked on the highway.


http://www.wired.com/2015/07/hackers-remotely-kill-jeep-highway/

zephyr911

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Re: MSN Article: How Much Car Can You Afford?
« Reply #36 on: July 22, 2015, 01:15:12 PM »
The median income is about $50k.  A $250k house with 20% down would have a monthly payment (not including taxes) of about $950.  This is just 23% of gross income, and a married couple with household income of $50k would be pay relatively low taxes.

That's not a bad investment, and it's certainly not a gamble.
I was single with twice that income and a $1200 payment was an ass pain, even with minimal consumer debt. I'm not saying a disciplined and thrifty buyer couldn't make it work, but for most people it'd be a bad move. It eats at least a third of take-home pay. Throw in kids an incidentals, and it gets painful.

Jack

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Re: MSN Article: How Much Car Can You Afford?
« Reply #37 on: July 22, 2015, 08:55:03 PM »
There's yet another reason to buy a mustachian car, without a lot of bells and whistles.
An older/simpler car can't be hacked on the highway.


http://www.wired.com/2015/07/hackers-remotely-kill-jeep-highway/

Yep, this genuinely is one of the reasons why I drive old cars (all three of my current vehicles were built in the '90s). I'm no luddite -- in fact, I'm a software engineer -- but because I know how the software sausage gets made, I don't really want it controlling my car and I certainly don't want it capable of communicating without my explicit consent!

The only acceptable new (or even new-ish) car would be one that ran fully on Free Software.

bostonjim

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Re: MSN Article: How Much Car Can You Afford?
« Reply #38 on: July 24, 2015, 02:49:40 PM »

The only acceptable new (or even new-ish) car would be one that ran fully on Free Software.

RMS, is that you?


bloomability

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Re: MSN Article: How Much Car Can You Afford?
« Reply #39 on: July 26, 2015, 09:50:19 PM »
4% sales tax? In what world?

It was 8.625% where I lived in Colorado.

At least the article was pushing for a 60 month term instead of 72 or 84 months.

The tax rate on car purchases is usually less than the sales tax on other items. Here in VA, it's 4.05%, whereas the tax on goods is over 6%.

In Colorado there was state, city, county, RTD, and other random neighborhood taxes that added up to 8.625%. Sales tax at the mall was a little under 8%.

DeltaBond

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Re: MSN Article: How Much Car Can You Afford?
« Reply #40 on: August 09, 2015, 07:00:03 AM »
Well, this thread got interesting.  In response to the initial post, I'm seeing more and more of those bogus type of articles out there, from how to spend your money, what's affecting the environment, which car is greenest, what food to buy, what's causing cancer... I really wish people would read more books on these topics and maybe not ones published in the last 10 years.  I've been baffled at what people end up spending on their houses, cars, etc.  All i can say is, "Please don't come to me for help when you're trying to retire."

For all the other types of articles out there, I try to stick with the ones who cite their sources, especially those on the environment of food production, but ugh, its very frustrating.  I hate that a seemingly credible source is putting out an article like this.  Isn't overspending on houses what caused the last housing market crash??
« Last Edit: August 09, 2015, 07:04:48 AM by DeltaBond »