r/personalfinance user looking for a $12k - $18k car on a $30,000 salary

[minority_finance_mo]

This guy came to Reddit to ask for advice about whether he should accept a raise or a company car in lieu of the raise.

http://www.reddit.com/r/personalfinance/comments/30ahky/pay_raise_vs_company_car/

Let's ignore the fact that a quick Excel computation should be able to answer this question for him, and move on to this little gem:

"I am currently looking for a quality used car and had planned on spending $12-18,000 on it."

He noted that he's making $30,000 a year. That, after taxes is likely around $24,000, meaning he's looking to spend up to 75% (!!!) of his salary on a freaking car. Up until my comment, no one in this "personal finance" sub even mentioned that his ass can't afford a car in the range he's looking at.

[Cathy]

Maybe he has $100,000,000 in assets and the car is a drop in the bucket for him. It would still be a waste of money, but not exactly financially irresponsible. Salary is irrelevant to whether a purchase is financially sane.

[StAugustine]

Didn't you see the post last week that was complaining about this exact subject?  That posters in /r/personalfinance are too hard on people wanting to spend money on cars? 

[minority_finance_mo]

Maybe he has $100,000,000 in assets and the car is a drop in the bucket for him. It would still be a waste of money, but not exactly financially irresponsible. Salary is irrelevant to whether a purchase is financially sane.

He's debating the merits of a $2k salary raise - I highly doubt that. Let's be honest with these types of caveats, really. Why even mention he "might" have a ton of money saved up - let alone a number like "$100,000,000."

Didn't you see the post last week that was complaining about this exact subject?  That posters in /r/personalfinance are too hard on people wanting to spend money on cars? 

I didn't! Do you have a link off-hand?

[RWD]

"I am currently looking for a quality used car and had planned on spending $12-18,000 on it."

There are new cars that fall within that price range...

Some guy made a compilation of car loan horror stories from /r/personalfinance/:
https://www.reddit.com/r/personalfinance/comments/2av2d6/collection_of_car_loan_horror_stories_from_rpf/

[dsmexpat]

Raise of 3000-5000 yearly or a car?
Well, I had to buy a car for work around 3 months ago on a budget. I spent a while browsing craigslist and 90% were shady as fuck, most would refuse to take them to a garage to get them checked out at our expense and in one case had no license plate and wouldn't give us any details of the vehicle but wanted cash for it. Two weekends and a lot of effort wasted trying to bypass the traditional dealership model to save money, not recommended. That time and effort had value.

I was however able to find a stripped out old police car that had been excellently serviced (gov vehicle so routine maintenance on it) and had under 70k miles for $3750. It's ugly as sin but does everything I need it to and more. I got it from a one man "dealership" where the guy was buying, repairing and flipping cars but had surprisingly good paperwork and record keeping when the larger dealerships were more in the $10k range.

I guess what I'm trying to say is that finding a Mustachian car isn't necessarily that easy, the guy is making the wrong choice but I acknowledge I got super lucky finding the car I found for the price it was, if I'd ended up with one of the cars from the larger dealerships then I'd probably be agreeing with him that not having the hassle was worth forfeiting the raise.

[Indexer]

So not much to comment on this guy's situation, pretty much covered, but....

I went back to the list of topics.  OMG!

"Girlfriend has not filed taxes in 15 years? what are her options? what do?"

"23m marrying 24f, what can I do to ensure that we start our life together off right? ($47k in school loans for me, $60k+ in school loans for her) "

"Company offering to match 401k 100%, how badly do I need to get on this?"

"Wife paid off a student loan and instead of a tax refund now we owe $6000! Help PF, is this a mistake?"

The "I want to help you" part of my brain hit overload.  So glad I stick to this forum instead of that one. 

[StAugustine]

Didn't you see the post last week that was complaining about this exact subject?  That posters in /r/personalfinance are too hard on people wanting to spend money on cars? 

I didn't! Do you have a link off-hand?

The OP got so much flak for this post that they deleted it but I found it archived in Google's cache http://webcache.googleusercontent.com/search?q=cache:42zCUOY3p5sJ:www.reddit.com/r/personalfinance/comments/2zh54t/psa_rpersonalfinance_is_not_rfinancialindependence/+&cd=3&hl=en&ct=clnk&gl=us!

Unfortunately, there were many replies of support to the OP's statement as well.  I suppose that is partly the result of being made a front page sub.

Here's the text of the OP's deleted post:

I frequent /r/personalfinance on a daily basis. It's one of the routine sites I check when I get to work (reading posts gets my analytical skills churning), and I sometimes frequent it at lunch and before bed.

Over the last couple months, I can't help but notice that way too much advice in this subreddit is geared towards /r/financialindependence (early retirement) rather than /r/personalfinance.

Yes, I completely understand that some advice from /r/financialindependence is extremely valuable and overlaps with general advice on /r/personalfinance: live below your means, don't splurge on unnecessary spending, treat your debt as an emergency, don't become house poor or car poor, etc. That's all well and good. But we all know that /r/financialindependence's advice can be a bit over the top, as it's very purpose is to gear people towards early retirement, which requires significant savings rates that might not be feasible--or even desirable--for many people.

/r/personalfinance, on the other hand, does not involve early retirement. There are thousands of readers here that enjoy their careers enough that they want to work into their 50s and 60s. Even more readers have completely different financial goals than early retirement (buying a nice house, a nice car, paying for their kids' college so they don't have to climb out of student loan debt like them, etc.).
And because of this, I'm tired of reading posts where OP appears completely responsible (makes a good income, has no debt, is matching his/her employer's 401k, etc.), they just want to treat themselves (most frequent example is a nice car), and then /r/financialindependence posters completely scold them for their purchase: "Don't buy nice car. It's just a tool to get from A to B. Go buy a 2011 Toyota Camry and invest the rest."

Nine out of ten times, that doesn't answer OP's question. Instead, it is an affirmation of the poster's pre-conceived beliefs that anybody and everybody's number one goal should be to save as much as possible and retire early. It's not. Some people want to treat themselves, and that's fine.

I guess my point is this: /r/personalfinance is about giving advice so OP can make PERSONAL finance decisions. This involves budget analysis, taking OP's PERSONAL goals into consideration, and a balance between current happiness and being responsible about saving for retirement; conversely, /r/financialindependence sees early retirement as the be-all end-all, and that's just not in line with what many of these posts are about.

So when you respond to posts, make sure you read the person's question, take their personal goals into account, and don't let your own financial goals get in the way of providing an objective answer to OP's question.
Cheers.

[thd7t]

Raise of 3000-5000 yearly or a car?
Well, I had to buy a car for work around 3 months ago on a budget. I spent a while browsing craigslist and 90% were shady as fuck, most would refuse to take them to a garage to get them checked out at our expense and in one case had no license plate and wouldn't give us any details of the vehicle but wanted cash for it. Two weekends and a lot of effort wasted trying to bypass the traditional dealership model to save money, not recommended. That time and effort had value.

I was however able to find a stripped out old police car that had been excellently serviced (gov vehicle so routine maintenance on it) and had under 70k miles for $3750. It's ugly as sin but does everything I need it to and more. I got it from a one man "dealership" where the guy was buying, repairing and flipping cars but had surprisingly good paperwork and record keeping when the larger dealerships were more in the $10k range.

I guess what I'm trying to say is that finding a Mustachian car isn't necessarily that easy, the guy is making the wrong choice but I acknowledge I got super lucky finding the car I found for the price it was, if I'd ended up with one of the cars from the larger dealerships then I'd probably be agreeing with him that not having the hassle was worth forfeiting the raise.

congrats on the awesome deal on the car!  A heads up about buying police cars is that their engines see a lot more use than the odometer shows, because they idle most of the time.  This doesn't diminish the value you got, but you should be conscious of it.

[Le Poisson]

Raise of 3000-5000 yearly or a car?
Well, I had to buy a car for work around 3 months ago on a budget. I spent a while browsing craigslist and 90% were shady as fuck, most would refuse to take them to a garage to get them checked out at our expense and in one case had no license plate and wouldn't give us any details of the vehicle but wanted cash for it. Two weekends and a lot of effort wasted trying to bypass the traditional dealership model to save money, not recommended. That time and effort had value.

I was however able to find a stripped out old police car that had been excellently serviced (gov vehicle so routine maintenance on it) and had under 70k miles for $3750. It's ugly as sin but does everything I need it to and more. I got it from a one man "dealership" where the guy was buying, repairing and flipping cars but had surprisingly good paperwork and record keeping when the larger dealerships were more in the $10k range.

I guess what I'm trying to say is that finding a Mustachian car isn't necessarily that easy, the guy is making the wrong choice but I acknowledge I got super lucky finding the car I found for the price it was, if I'd ended up with one of the cars from the larger dealerships then I'd probably be agreeing with him that not having the hassle was worth forfeiting the raise.

congrats on the awesome deal on the car!  A heads up about buying police cars is that their engines see a lot more use than the odometer shows, because they idle most of the time.  This doesn't diminish the value you got, but you should be conscious of it.

Car prices and availability can be really regional as well. If you are hunting and having a hard time - try broadening your search to state-wide, and don't limit yourself to Craigslist. Up here we have CL (but it is shady) as well as Kijiji, carpages.ca, trader.ca, etc. I find that about 4 hours out of Toronto in areas like North Bay, Sudbury, Ottawa, Cornwall, Sarnia, Windsor, etc. the cars are thousands less than locally. My coworkers laugh at me driving 4-5 hours to pick up a car, but  it can mean but-tonne of cash in my pocket. A tip for my fellow Ontario Mustachians - be wary of cars imported from Quebec - their registrations are scrubbed when they come across the border and collision history will be hidden from carfax etc.

I also have a good mechanic locally, so if I get home with a car that has hidden problems, I'm confident I can get them fixed for less than the cash I've saved.