How Much Car You Can ACTUALLY Afford (By Salary)
Vložit
- čas přidán 11. 06. 2024
- Check Out Humphrey Yang's Video Here (Who Inspired My Video): • How Much Car Can You R... (And subscribe to him, as well - he has some really great content). Here is EXACTLY how much car you can afford on every salary - Enjoy! Add me on Snapchat / Instagram: GPStephan
GET MY WEEKLY EMAIL MARKET RECAP NEWSLETTER: grahamstephan.com/newsletter
PROMOTIONAL OFFER: Get FREE STOCKS when you sign up and make a deposit using my paid affiliate link for WeBull: a.webull.com/i/GrahamStephan
THE NEW PODCAST: / @theicedcoffeehour
The CZcams Creator Academy:
Learn EXACTLY how to get your first 1000 subscribers on CZcams, rank videos on the front page of searches, grow your following, and turn that into another income source: the-real-estate-agent-academy... - $100 OFF WITH CODE 100OFF
My ENTIRE Camera and Recording Equipment:
www.amazon.com/shop/grahamste...
For business inquiries, you can reach me at grahamstephanbusiness@gmail.com
*Some of the links and other products that appear on this video are from companies which Graham Stephan will earn an affiliate commission or referral bonus. Graham Stephan receives cash compensation from Public for sponsored advertising materials. Graham Stephan is part of an affiliate network and receives compensation for sending traffic to partner sites. The content in this video is accurate as of the posting date. Some of the offers mentioned may no longer be available. This is not investment advice. Public Offer valid for U.S. residents 18+ and subject to account approval. There may be other fees associated with trading. See Public.com/disclosures/
For further updates, follow my newsletter: grahamstephan.substack.com/
Here is a link containing the source material for each piece of research cited. I do my best to make my videos as accurate as I can, and the additional resources should help anyone who wants to look into them further - enjoy! docs.google.com/spreadsheets/d/1LgsFZr6DwAgvLdEP_flHVapQV_0ZpIRapK-BnCsYNz0/edit?usp=sharing
Sure
"What's up graham its guys here" was this a mistake or was it on purpose?
This video isn’t popping up in my feed probably why the views are low.
hey man, just disable these comments. youtube isn't doing anything about them anytime soon and you have a very impressionable audience, hence why these comments are here in the hundreds of thousands.
These comments are awful graham 😞
I drove the same car from age 20 till around age 30. I did most of my own mechanical work so that helped. I kept that car but got another used daily driver which I drove for another 10 or so years. I replaced that with another used car which I drove for several years before replacing it with another used car. Finally, in my mid 50's I bought my first new car. Paid cash. Now, my wife had two new cars during all of this but she drove them for years and years. And you know what? No one cares. My friends never talk about the cars I used to drive but I often hear "You are so lucky you retired early".
Congrats man, that's the way to do it!
Pin his comment Graham
not being a wage slave, should be the goal in life... eveything else is just distractions.
@@MrMlbfan6 Thank you! I wasn't looking for congratulations I was trying to encourage people that they can do the same. I was greatly influenced by the book "Millionaire Next Door". Living way below our means put us on a track to early retirement and yet we really didn't sacrifice much to make it happen. Sure I would have liked to own a new car every couple of years. But in the end it is just stuff and I am happier we traded that stuff for reaching financial FREEDOM sooner. Take care!
Agree
This is good advice. As a car enthusiast, I can't help but secretly hate this video, though. The temptation to waste money on nice (but quickly depreciating) cars is real.
It’s not a waste if you’re the kind of car enthusiast that likes cars for the driving experience and not for “status”. Life has to be enjoyed. Sure I could save and invest everything for 30 years and retire a multi millionaire… but then what? Finally go and buy that sports car when you’re 60 and your back hurts?
I think one can drive a fun car and still save and invest for retirement. For me, it motivated me to find ways to make more money
Considering the average American spends over an hour a day in their car, I don't see why it's so unreasonable for people to at least want something with a little more comfort and features to it.
@@ROVA00nailed it
If you grow out of doing that, you will have a much more stable financial future. And less fun.
I do, we never know how long our life will be. As long as I can afford it with no debts, I'll buy it. Better used & few miles, an S class coupe 63 amg was 200k usd brand new in 2020, now is like 70k
Telling me to like a video before I've seen it, is like a server asking for a tip before they take my order...
“And now let’s begin”😂
And at counter-server places they do exactly that!
It's because statistically most people have short attention spans and can't watch more than a couple minutes. If he waits to ask for likes at the end then most people would have dropped off by then. Apparently peoples brains are so fried due to internet overstimulation that CZcams estimates half of all viewers drop of usually by the one minute mark. My guess is Graham being a successful CZcamsr is very aware of that fact. Thus the ask from the start.
That's the American way. It's assumed you WILL give a tip. In a restaurant or diner you'll get chased down and abused if you don't.
@@rodrigosanroman5858 if people do not finish watching the video then there's no damn point of clicking the like button in the first place.
I’ve been driving my 2007 Honda Accord since I bought it new. 270,000 miles and no payments for the past 13 years. It still runs great, I know all the history, and do all the maintenance myself, including the timing belt. It’s like an old friend now. I make 170k/year and I just don’t have and desire to get a brand new car.
I do all the maintenance on my 2000 toyota tacoma even though I bought it used in cash it still runs great at 120k miles. That mileage is nothing for toyota tho so I don’t see myself getting a new car anytime soon 😂
That proves one of my personal beliefs. You can buy a reasonable,new family car. The trick is to keep it at least 10 years to get good return on investment. No way I'm buying a rust bucket playing the...am I going to make it to work/get fired lottery.
I'm in a similar boat. 2004, been in the family since new(was my mom's). A lot less miles and I do need to pay for maintenance etc, as I'm not even remotely a car person.
I've had money in the bank for a new car for almost 10 years now. I'm not going to buy one until this one actually does die, but it pays(sometimes literally) to be prepared.
My former landlord have a truck that is 40+ years. Had to patch up some part of the chassis a couple years ago as rust was starting to eat into it. But aside that, it functions perfectly. Well, I think the AC doesn't work, only been in it twice though so not entirely sure.
but you must have more than one vehicle am I right?
Amen, brother. I’m right there with you. $1100 a month in transportation is ridiculous. I’d rather spend $125 a month on insurance for my paid off Honda Fit.
well done Graham! thanks for the shout!
Absolutely!! :)
Are you guys gonna colab anytime soon?
He's Guys, we're Graham
I make $50,000 and drive a $7,000 Toyota 🤓
This kind of break down with realistic life examples is so useful and eye opening. Thank you, I really like your videos! It feels like an approachable, fun conversation with a friend who is passionate about finance - and I'm learning so much.
This is not realistic at all though. Good luck finding a good used car under 8k that will not cost you an arm and leg in repairs and maintenance down the road.
@@corail53 Couldn't someone just pay a third party to inspect the used car before making the purchase?
Been driving my 24 year old $3k car for 10 years and still love it. In the mean time I’ve saved a ton and fixing the car keeps my skills sharp. It’s never left me stranded either.
Is it the Forester in the pfp? Those cars are amazing. Just wish I can find a stick shift one at a reasonable price.
I haven't made a car payment since 2007. I'm going to have to agree with Dave R. on this one. Paying cash for used cars and driving them into the dirt for 10-20 years has given me the ability to invest in other opertunities. Even with the cost of repairs and maintenance its far less then I'd pay over time with a new car + insurance etc.
my family hold Mr. Steve Banks in high esteem because of the $ 21,000 weekly profit we're receiving trading with his strategies
wow!! I thought I was the only beneficiary of Mr. Stephen Banks trading services. His techniques and strategies are the best
Lmao @ these bots in the comments
Well some people have higher standards in life and don’t want to drive a round a beater 😂
@@Kinja_then save up and buy in cash
i drove a 2004 camry after selling my truck, i remember all of the dirty looks i got and i would go on dates with men who made fun of me for being cheap. My car cost me $2200 cash and I only had to get a muffler ($300 for everything). I am a single woman and I had lost my job, i have no help and I wasn't about to be car poor in a pandemic. Now I own a condo with low interest and a car with low interest thanks to buying it in the pandemic.. It took me a year to save enough money with no car payments. I can go get an audi but why? I plan to pay off my student loans first and reward myself with a nice car afterwards.
Keep it up
Someone has been listening to Dave Ramsay.
Thank you! Just sold my used car and put half of it towards a different used car. It's broken now and costs more to fix than its worth.
honestly with how expensive car ownership is, going car-free is a really good idea for a lot of people
"You will own nothing and be happy" is hitting faster and harder than I thought...
I appreciate you sharing those cars that keep their value. Everyone says spending extra money on a car is a bad move, but driving up a mountain road with the top down is one of my favorite things so it’s hard for me to think of a better use of money.
Buying a big fat SUV on credit just to commute to work every day is something else.
I loved driving down twisting mountain roads (hardtop , though) in my Lexus sports sedan before I was rear-ended and it was totaled. But damn, it was the most fun I'd ever had in a car in my entire life. It handled great and pushing it to the limits on Michelin Pilot Sports was an adrenaline rush. Sometimes in life, a purchase doesn't have to make sense, it just has to make you smile.
I like to follow the guides they lay out, while also allowing extra cost for the car to consider it a "fun" purchase. If you take some money from your "wants" category (if you're following something like the 50/30/20 rule), I say it's still justified since it's made to fit into your budget. Everyone's definition of "wants" is different, and if you want a more expensive car, it's perfectly alright if you're willing to pay the extra expense for it.
@@Drew458 100%, although you’ll also want to factor in the extra gas from the trips you’ll be taking. Then again if you are replacing a truck with a little sports car, that will probably take care of itself.
What do you think about buying the cheaper car for day to day driving, and then renting the super car for a fun weekend to get the rush? A Lamborghini isn’t much fun to drive in traffic
@@HalfBlueCat1Yeah, I’m talking about a Miata or an S2000, not a Lamborghini. If that’s what you want, renting is most likely the only option. That is fun too, but tougher to hit the road on the spur of the moment. Also, it’s fun to take other people out in your car and this is easier to do casually if you own it. If you pull up to a date in a rented Lamborghini, it might feel awesome for a second until the inevitable question of “Wow, is this yours?” comes out and you feel like a poser. (Never actually rented a car for this purpose, so I’m just guessing.)
“Drive until the wheels fall off” is popular advice. But I’m wondering about the “cost” of no longer having a reliable vehicle. I’m still driving a 2008 Honda CRV with over 210k miles on it that was paid off over 10 years ago. I keep up on all maintenance (preventative and otherwise) and it’s been my intention to keep it as long as possible given the tough market for used cars. But the maintenance costs every year aren’t far off from the cost of buying another vehicle and the stress of not having a reliable vehicle wears on your psyche. At least that’s been my experience. It’s hard to know when to take the jump 🤷♀️ I don’t hear many folks give this topic too much attention but the stress is real.
Take in fuel efficiency aswell. Gas aint getting cheaper
I had my mechanic just tell me it was better to get rid of my old car because problems just kept popping up.
its time to say goodbye.
Yeah people talk about beaters being cheap but if your car keeps breaking down/is in the shop, and you end up missing work enough, then your job is at risk. People getting fired because they can't show up reliably enough due to their cheap transportation.
Get a Toyota, they’re known to average twice that mileage with proper maintenance and are relatively cheap to maintain compred to other brands. There are even some examples of Tundras used as work trucks and reaching over a million miles while still running strong.
I was talking about this yesterday. It is crazy how many spend 50% of a years salary on a car. If people followed these rules, we would all see car prices plummet.
That's exactly what I'm always saying about that!
I don't even understand how a person can live, and how the bank approves someone making $60K to get a $50K car. How are they even surviving? Then there's two fairly new cars in the driveway. How?
@@LordPrometheous The key to get wealthy is to not follow the mass!
@@LordPrometheous that’s exactly what I did I bought a e43 AMG for 43k and I make 60k and I’m 18…. Getting a loan is so easy nowadays
@@jadduval7778 that's insane. I guess you're still at home with your parents or have roommates so it's not breaking the bank. I hope you're enjoying it.
Super helpful man! Going into my 20's kinda scared about financial advise, but your videos are very insightful!
I was lucky to get a 02 Toyota Celica for 3k during the pandemic! It has 34k miles and the engines usually last past 300k. I saved myself so much money, it’s also great on gas! A full tank cost around $34 (which my local gas being $3.43/ga) and I usually get 350-400 miles on a full tank :)
Wow a Celica that old with that low of mileage is crazy! Solid buy
Wow that's rare
Change oil
My first car was a 1995 Toyota Celica and that thing died in 2016 with well over 300k miles on it.
Best car on the planet.
This car is rock solid. One of the best car that Toyota made. I had one for almost 17 years. Cheap on gas, cheap to maintains and fun to drive. The best car
Good find.
I’m debt free including my home, and have plenty to afford new cars in cash. Still driving a 12 year old Honda Fit that I bought new, has about 151k miles on it and runs and looks great still!
lmaoo im 18 in 15k ""debt"" and i drive a E43 AMG
@@jadduval7778😂
@@jadduval7778sell it pay off debt and buy a older e63 that will hold its value
Why you buy a e43 fake amg? Get a 63...
@@user-xw4vg1vy5e I can’t afford that lmao
This video is another reminder of the stark economical reality we currently live in. With stagnant wages and increasing inflation and debts, there are little people in this country that can responsively finance a new or used car. We have a median income in the United States of 31k, meaning the average American could realistically buy a 8k car which right now is almost unheard of.
Yeah it sounds like it takes months to find good cars for cheap...
agreed. I believe these car buying rules are outdated.
HA really bro 8k car is unheard of? My most expensive car I paid 8k for. Cheapest car I own I bought in February for $500 and it runs and drives fine. Yall ain't trying hard enough.
@@gopro2027 I bought a used Audi A3 for 9k almost five years ago with 100k miles on it and the car still serving its intended purpose. One disclaimer is that I do most of the cost repairs and scheduled maintenance when needed.
@@gopro2027 Last person I knew who bought a car under 1K it only worked for months. I think so markets don't have god cars under a certain amount. Your experience is not everyone elses experience.
Great video Graham. You are so helpful to so many of us learning how to manage our money
Great video Graham! Things i wish i knew @ 21, and great non car-nut advice for everyone.
The enthusiast portion hits on the spot for me... my daily for the last 18 yrs has been a Datsun 510 which is now worth over triple what i paid for it. Finally went back to a "modern" car last year with a low mileage 2004 s2k on the exact value logic you shared. Cheers!
I took a slightly different approach to this. My daily is a 2004 350z with 235k miles on it, and the other fun car is a C6 corvette I'm into for about 20k
a low mileage 2004 s2k 😩😩😩 you must have paid a fortune for that
Great advice. Just bought a car and glad to know I pass all the tests, especially the Ramsey test. Appreciate most people can’t buy outright but compared to my earnings I think I definitely made the right choice, outright and 20% of my gross wages. I detest monthly payments 🙏
It's important to buy cars when interest rates and prices are low. My financial advisor also gave me the same advice. When rates and prices are low, it can save you money on financing and make the overall cost more affordable.
My financial advisor advises buying cars when interest rates and prices are low. However, he also cautions against it right now due to the hidden costs of car ownership, like insurance and maintenance. He helps me plan for these expenses and manages my portfolio to ensure financial stability. It's all about making strategic decisions and having a well-rounded financial plan.
If you see insurance and maintenance as 'hidden costs' I worry for you. They are well known costs are car ownership.@@Bradleyschaeffer376
@@SeanmirrerYup this...I took a loan out for me very nice car when interest rates were very low. The upshot is, my savings interest rate is higher than my car loan interest rate. Ergo, the bank is paying my loan interest for me and then some. Its unlikely that will ever happen again in the near future though, so you had to time it right.
@@Bradleyschaeffer376 How do you get to work?
The rule of thumb I go by is as long as I have ~$2500 left for food/fun after tax, 401k, bills and investments I can afford it. The goal for me is usually $500+ week allowance after everything is said and done.
Your best point, especially with today's economy in mind, is to finance as little as possible and buy what you can afford. It sounds like your potential return is greater when you can buy select, nicer cars like you do, but the philosophy applies equally either way.
I think your depreciation schedule is a pre-covid relic. If I could find a 5 year old diesel one ton (for my farm) for ~45% of its new value I’d buy one this week.
Preach!
Absolutely beautiful seeing the GT behind you as you talk
Love grants videos. Wish I could have someone with this much knowledge on finances in my everyday life.
Really glad you included the Ramsey approach. Been on that for over a decade and love that I actually have money!
Eh, it all depends on perspective. The most important thing is to decide how much you are willing/able to spend on the car every month and work from there. I think the most important thing he talked about in the video is factoring in maintenance and fuel costs, which people seem to forget. For example, in my country (where the average salary is much, much lower than in the USA) it is not uncommon to see young guys buy an old beat up BMW or something similar just because they depreciated enough to the point that you can afford them, and then end up selling them soon after because the maintenance is too expensive. The maintenance on a brand new german luxury car is going to be noticeably higher than a normal (i.e. cheap) car, but is in a lot of cases going to be much much worse when these cars get older, when things actually start going bad. I'm also all for buying the car which you can afford in cash so you don't have to pay a loan check every month, but in the end you are only saving the interest. It's just that people buy more expensive cars than they can realistically afford just because they can get a loan approved on these cars, if you have a stable job (meaning little or no risk that you won't be able to make payments) buying on a loan isn't that bad as long as you buy what you can afford.
Unfortunately the percentage breakdown is really darn tricky to stick to. Where I'm located, a person is very lucky to find a road-legal vehicle for less than 8k and the vast majority of my town makes less than 45k/year.
Yeah, it's pretty much impossible to stick to especially when you consider most people are living paycheck to paycheck nowadays
In my opinion, these rules don't work very well for the "lower" end of the spectrum in terms of income. I think they work on anything $65k+, but it's harder to use on less than that. It's especially hard since the pandemic nearly doubled the price of a decent used car. I think making it fit into an overall budget is an extremely important factor.
Get a bike or a bus pass
@@HalfBlueCat1 Buses in my area are only for seniors & people with disabilties and my family has a couple bikes which are used for shorter trips regularely between May-October.
if you live up north, seriously consider a trip south to buy a car. you can get something 10 years old and better condition than the rotten piles you have up there
Wow! Thank you so much! I just learned that I can afford a bicycle to get myself to and from work! Looks like I’m about to finally get fit for my New Year’s resolution!
My biggest problem with today's autos is the lack of reliability, not being inclined to peek under the hood out of object fear, the warranty gives me the peace of mind I want and can afford.
The keyword I noted was "reliable." Saving longer to put down more on a reliable car is worth it as a cheap car that breaks down all the time is extremely expensive. Been there, done that, never again. Last time I financed for two years longer than I would have liked to get a payment I could afford and it was worth it. It's paid off now and still running great.
You had me at Ford GT!!!
Woohoo!
You had me at big titties!
The older Boxsters are great picks. I bought one with high miles, added 13k miles in a year, and then sold it a year later for a $500 overall loss.
Not sure why but I really liked this video Grahmn but I did. I bet it will help a lot of people trying to be as frugal as yourself. Thanks man
Most of these rules don’t work in today’s financial markets in the uk as the second hand car prices are way above the norm and wages lagging behind inflation.
They also don't work in America either
Yea, in America you’ll be hard pressed to find a car that even runs for $10,000 or less. Let alone a good car that’s gunna run for 10 more years
Same in US this is pie in the sky for most. A cheap reliable used car here is 17-20k low end for a reliable low mileage car that will last you 8+ years. I have a lot of experience recently with this.
@@Jeremyhull-mx3lrAt least in America insurance isn't 2x the price of the card
This is spot on. There is NO WAY you can buy new cars unless you make over $100k. Quit falling for it thinking you need a new car. Older cars are often cheaper and more reliable as well
It’s not about income. Don’t buy a new car unless you’re a millionaire (net worth)
i just bought a new car for 18k after my trade in, MSRP was 25K
2023 Mazda CX-30
What if your getting a tesla 2023 15k off standard range. 8K DOWN MMMMmmmmm
As someone who briefly worked at a car dealership, I will never purchase a used car again. I’ll take the original warranty and put all the miles on it and damage myself. Some of the stuff they let out the door knowing it was messed up infuriated me.
@@evandavis2362if everyone stops buying new cars then the used maker falls off a cliff like the pandemic where used gets to be just as expensive as new
"What's Up Graham, its GUYS here" strikes AGAIN! 🤣
Great videos man!
Yes! I loved this video! I think you should do more videos about cars.
These are some of the most useful types of videos on CZcams. This is paid course level material.
Lol no it is not. It is the bare minimun any parents MUST learn their kids when they are going into their teens.. It is mandatory knowledge!
I'm in Tokyo. Trains are wonderful! And no car needed. The amount of money I save by not owning a vehicle is absolutely astronomical. As you said, there is the cost of the car itself (not to mention interest rates). Then there's payment of ZERO on insurance, taxes, maintenance, gas, parking and speeding tickets, possibility of collision and the thing getting keyed, robbed, etc. Finally, and probably the worst of it: Depreciation. Without a car means you can actually save your cash.
Americans who tout the "freedom" of the "open road" don't realize how much good public transit would ultimately save them money, forgetful of all the associated costs of the privilege to be stuck in traffic like everyone else. I'd rather not own a car for a routine commute if I can help it, and I say this as someone who's been licensed from everything that's road-legal between motorcycles to combat trucks.
@@doujinflipmost of us freedom loving Americans don't live in areas where public transit is realistic. The ones that live around those areas are the ones who dislike freedom.
Big fan of this topic! Responsible car buying is hard and where many people put themselves in a hole.
This video is gold, thank you so much!
Most underrated tip is to learn to diy. If you can do your own maintenance its a hell of a lot cheaper to keep an older car around. Also less bad stuff happens to you because you can judge how severe issues are and act accordingly.
And there’s the peace of mind knowing you did the work and guaranteed that the repair was done.
THIS. It feels amazing knowing you saved hundreds or even thousands of dollars doing the work yourself and you know it was done right
One of the best things I did was go to auto school. I didn't end up being a mechanic but i've saved thousands in auto repairs by doing the repairs myself. I would highly advise everyone to at least learn how to do their own oil changes. You too girls!
Have almost the same experience based on high auto automotive class. It has not only paid off in thousands on auto repair but also in 10s of thousands on home repairs. Oil changes, brakes, shocks, every kind of fluid change, diesel emissions, ball joints, tune ups, the list goes on and on. It’s a foundation for so many other repairs. Several appliance repairs, confidence in remodeling a kitchen for 10k that would have cost 30-40, replacing windows and the list goes on. I try to do almost everything myself. The satisfaction of completing the project is an added benefit to money saved.
New cars are making it almost impossible to work on them yourself. They're even pushing out mechanics. They are trying to force everyone into the dealership ecosystem.
Wish I could change my own oil - I just bought a new car and don't want Jiffy Lube to mess it up! But I live in an apartment complex where they're extremely anal about not allowing ANY car maintenance (not even car washes!) in the parking lot or the carports.
"what's up Graham, it's guys here" - not sure if that was intentional, but i liked the comedic relief if so. Love your videos, and they're super helpful. Keep it up for all of us!
I go by the rule of, "if you are worried about depreciation or mileage you can't afford the car."
When my dad passed away he was watching your videos to get financial education..least I can say thanks for teaching my dad how the world works with money..some old people don't understand till its too late
This is EXTREMELY helpful! Can we talk interest rates next? 😊
Hey Graham, the first car I bought cost 600 dollars. It was a1974 Malibu Classic with about 60,000 miles on it. I drove it for an additional 200,000 miles before it started messing up.
and you could sell it for more than that today, inflation and price hiking is out the ass
I bet you bought it in 1980 lol
but how's everyone going to assert their dominance to strangers on the road if they don't put all their money into their car?
Over the last 20ish years, I’ve spent less on all of my vehicles combined than most people pay for just one. I’ve only ever bought used cars with cash, paid in full at the moment that I drove away with it. Combine that with repairs done at home, in the driveway, except for a few large issues (like a blown transmission), and my vehicle costs are nonexistent. One car (jeep Cherokee) got to 470k miles and only cost about $4k. Buying only the car you can afford with cash is fantastic advice, especially if it’s combined with “learn to fix it yourself.”
"Afford" is such a subjective/vague term. Some people get more enjoyment and live more fulfilling lives by spending their money in their 20s/30s rather than saving it till their 50s/60s. Your going to get a hell of a lot more enjoyment spending 50k when your 20 vs spending 250k when your 50.
That’s also subjective. I’d much rather retire comfortably than spend frivolously in my 20s and not have certainty about my future
@@V1NTAGEBuRRit0 What gives you the guarantee you are going to live over 30? Having certainty about the future means having a big fat bank account?
@@mihai5085well, yeah. Figured that was pretty obvious. If you have a lot of money you have a lot more say about what your future looks like. Not many options when you spend all your money as soon as you get it. No there’s no guarantee I’ll live past 30 but statistically it’s a lot smarter to assume I will than I won’t.
@@V1NTAGEBuRRit0 I agree with your point to some extent. I personally think it's the best choice to spread the leftover money in a way that you are saving for the future, but also living your present. Investing 30% or 40% for your retirement and 70% or 60% to be used right now (in my opinion). I assumed that you are putting every leftover money into your retirement from your comment, maybe i was wrong.
@@V1NTAGEBuRRit0 and what happens if you died tonight ? You saved all that for what?
What’s up Graham is guys here.
I love that this is the first time that addressing financial responsibility has acknowledged being a car enthusiast as well, very well done
I live in Canada. I pay $4,000 / year in insurance for a $30,000, and gas is the equivalent to $8.00/ gallon ($2.xx / litre). Love that lol
I also bought a Lotus Elise. Kept it for 10 years and sold it for $5K more than I paid. It's really absurd the way the world works. A poor person struggles with transportation, while I got to buy a really fun sports car and drive it around basically for free. I don't think it should be this way.
Thank you for your help man, these videos are invaluable to me!
Glad you like them!
Enjoy your content, love your opening statement!!!
This actually reminded me that I had intended to increase my car payment so I can get this thing paid off sooner
As someone who's been close to being debt free and only invest I'm curious to see what you have to say because I've been struggling not to impulse buy my dream car. But knowing if I could statically afford it would be nice to see anyway.
Take the cost of your dream car and put that number into a retirement calculator. Figure a 10% return on stocks and see how much that car will really cost you after 20 years.
what’s the car?
@@decidingname9163 BMW i8
Do it!
@@mocheen4837 did you?
I agree 100% with your process and approach. I am 45 and based on the math I'd be looking at a car in the $8k-$9k range. The problem is finding a car in that price range. There are not a lot of them and when you do find them, they are 10-15 years old and have 100k miles or more. I am thinking that reliability may be a concern.
I bought a car just before March 2020 and checked Graham then and now with my incomes. I meet all his rules AND can confirm this is great advice.
what car
You finally found a real comment. CZcams needs to stop these bots my god.
What if someone never owns a car? Could Graham do a video on the economics of public transportation, taxis, ubers, and asking people for a ride vs. the economics of car ownership? Which is the better deal?
It’s cheaper to buy a reliable daily car then use Uber by far
It’s Just more upfront, think about it u spend 30$ a day on Uber you end up spending 10,950$ on Uber by the end of the year…
Depends where you work or need to goto most often. Also the cost of deliveries like groceries, medical etc
I live in a small town and work from home but still have to have a car cause anything but the nearest store is 5-30 miles away.
I have this image in my head that people that live in big cities are close to everything and just don’t need a car.
I agree. Consider New York city, Chicago or LA. Very few ppl own cars
Excellent advise to those who never learned the value of money or basic economics
All I got from this is "buy lotus"
What are your thoughts on repairs? specifically about how much to put into a car before you get a "new to you" car?
On the surface, you should look at it as a fraction of the value of the vehicle. You’re more likely to be ok with putting $2000 of repairs in a vehicle worth $10k, than into one only worth 3k.
In reality…it’s going to be very situation dependent. I wouldn’t hesitate to put $2000 of maintenance type work into a vehicle only worth $2k if I knew the history of the vehicle. I wouldn’t consider putting $2000 worth of engine or transmission work into the same vehicle though.
I previously followed the Ramsey approach. The last few cars cost 3k with higher mileage but were constantly breaking down and costly to fix.
This time I used 3k as a down payment on a 12k car that runs perfectly with low mileage. Cleared the loan in 12 months with overpayments. 100% the best decision for me
The reason that most of the cheap older cars require regular work is because the previous owners did not keep up with maintenance of parts that are eventually going to wear out. But some cars that were better engineered and built tend to last longer like Japanese makes. That's why it's important to do your research to see which models have a good reliability record. Because a 12k used Hyundai or Ford is not going to last as long as 12k Toyota or Honda even though they might be older and have more miles. I still own a 95 Acura Integra with a manual transmission that I bought for $7.500 in 2001 with 100k miles. And it's still my daily beater that now has 260k miles on it. The only major repair it has needed has been a head gasket at 200k miles. But part of the reason I have been able to keep it for so long is that I can do most maintenance and repairs my self and parts are cheap for it.
Climate is quite hard on cars where I live, and although I’ve never bought new, getting a good reliable car is really hard if you are buying too old. I am 1000% in the same camp as you with being willing to spend a little more to stay out of the garage.
@@misssophiamae That's why it's important to take care of what you got when you find a decent car. I have an 05 Subaru WRX that I bought used and I have kept in good shape waxing it regularly and maintaining it. I also live in an area where road salt can be bad on cars. So part of that maintenance has been treating developing corrosion on the under chassis, sub frame and suspension components. I recently had to swap the front suspension arms because they were corroding. But I replaced them with better aftermarket aluminum arms with new bushings.
Yes thanks for illustrating there's no connection point in reality of wages vs costs
“What’s up Graham, it’s guys here!”
Someone mixed there words in the intro. Lol 😂
Thanks a lot for contributing to the ever growing appreciation of the s2000.. Now I'll never be able to afford another one 😭
Ramsey's method to purchase cars with cash is how you build wealth. Never give away your future income for a depreciating asset.
I had an Integra Type R with only 24,000 miles on it. I traded it in for a E46 M3. The Integra shot up in value. The M3 is starting to go up. I can still sell it for the amount that I paid for it over 16 years ago. I have close to 80,000 miles on the car. It mostly sits in the garage now.
I've never heard 20/3/8. But I just personally liked never financing more than 48 months, and just making sure the payment I have is manageable. If the car is unmanageable more than 48 months, then I felt the car is out of my budget.
Some of these rules saying only buying a $5k to $10k car seems unrealistic. My rule is buy for longevity. Our two Sedans I owned for almost 20 years. Our SUV is approaching 10.
Only time I went for a 72 month was when I was offered 2.9% financing on a USED car. My car payment for a two year old Acura with low mileage for about $300/mo. That was back in 2013. Best deal I ever made on a car. You can't get anything close to what I got now for less than $800/mo now.
Laughing at the implication that someone making 150k a year can only afford a 45k car, that's insane.
@@mikeydude750 It completely depends on what your fixed living expenses are and how much you are willing to blow on a depreciating asset. If you live in California, $150k isn't much anymore. Probably can't afford more than a condo.
@@mikeydude750 to me I think it all about the monthly payment no the total price of the car
@@mikeydude750 Exactly. Pretty much everyone I know driving Audis makes less then 100k a year. They make it work just fine.
Id like to learn about cars from you. Always good to learn.
This is great advice, I see people overspending on cars ludicrously all the time.
love your videos! Been working on my credit since I saw your “credit card for beginners” video couple years ago and I’ve gotten up to 750 recently!
Great work!
Looks like all I can get is a E scooter
:(
Solid advice and very articulate! So many comments with excuses why logical advice doesn't work for them. You could lead horses to the best water on earth, but can't make them drink it. There are of coarse exceptions, but most people "get ahead" through self desipline and delayed gratification.
Great value in the video, i just subscribed
A car will not make you a millionaire, but a car will probably be the thing that keeps you from becoming a millionaire.
“What’s up Graham, it’s guys here!”
How’d I not notice that 😂
Good lesson in reality Graham.
I like the part where you said what's up graham it's guys here.
Starting to binge you love your videos!
How does one go about calculating that 3rd metric of transportation cost? I know you ran through a scenario, but is there a typical % of total car cost to expect with that?
That can't be narrowed down to a percentage of the total car cost b/c that can be vastly different for everyone. One person may pay $40/mo for insurance, while the next person pays $300. He noted barely $150/mo for gas, whereas I being a field tech, fill up nearly every day for whatever I drive, and there are two vehicles in my household. I can easily spend $1500 or more per month for gas. That's why no percentage of the total for transportation costs.
I bought a Lexus IS350 for $30k back in October during the peak of the used car market. Now they’re selling for under $20k. I wish I either waited or maybe got a Lotus Elise for that price like you did😅
I purchased an E46 M3 for $34,000 back in 2006 from a guy who had three new BMWs. It had 30,000 miles on it and he sold it to me for half price after two years of ownership. I still have the car today and it has close to 80,000 miles on it. I can sell it for pretty much what I paid for it 17 years ago. The prices keep climbing on these models.
I use 100/0/1 rule. NEVER borrow money for a car, and NEVER buy a new car... ~3yrs old used, only with LOW miles.
Thanks for the advise been saving up for a year now and I think I'm going to stick with buying my dream in cash.
Hey Graham I love your videos! I am a 20-year-old college student (without dept) and thinking about ordering a 2024 Ford Maverick hybrid paying in full. Right now the markups on them are insane, being 8k+. Would this benefit Maverick's depreciation if I order it at MSRP or should I instead focus my savings on a cheaper used vehicle to have more money to put down on retail later. I understand that usually for my age it would be wise to purchase a cheap used car, but with that comes the risk of repairs, fuel efficiency, and (not-so-great used car deals).🚙😃
Don't buy it bro
Get something used, do your research, and know what to look for when purchasing a new car.
i def wouldn't buy that as a good investment, personally i'd get something that's reliable and cheaper like a civic or corolla... if you just need reliable transportation, that is.
Here I am. 30,000 a year
it would be nice if you a video comparing leasing vs financing. Thank uou
love this guy
What if you have a car loan with 0% interest would you take a longer term loan? That’s the case with my car got it during peak covid (2020) and they were offering this deal to get cars off the lot
That can make sense if you’re not using it as an excuse to buy a more expensive car. If you have other debts to pay off and the extra padding allows you to make bigger payments, it can be a plus.
How about paying cash?
If you can afford to pay in cash buy any car you want, just remember to factor in the how much that car is going to cost you in fuel, maintenance etc into your finances
7:13 well, for lots of us car is more than just "getting from point A to B" (similar with clothes: "to keep warm", or food "not to be hungry")
Exactly, my feet can get me from point A to point B for free. But I ain’t walking unless I have to.
There are also people who actually enjoy cars 😂😂😂
I can’t imagine not paying cash for cars. The last thing I need in my life is a car payment and basically paying the bank enough interest to just buy another car. Patience is a virtue.
I don't know what you're investing in but I make a lot more than the $120/month I pay in interest on $50K I would otherwise have tied up in my truck. (which was also a 100% tax deduction).
@@2010drive It has nothing to do with logic or leveraging your car to make an extremely small amount of money. It is an emotional thing and it makes your life more simple and low stress.
My first car I ever bought I had a 2.9% interest and I was investing the cash I would have just given them and making about 7%. I realized after a few months it just wasn't worth a few hundred bucks to have a car payment in my life and just paid it off. Debt fucking sucks.
It just depends on what you value. If you already own a house and have minimal payment requirements, then why not drop money on something that will emotionally satisfy you.
You’re not buying a decent car for cash..Unless you happen to have more than 20k lying around that you can throw at a car. Out of warranty, old cars that you don’t know the history on will be all well and good, until they aren’t.
@@user-360johnnbelieve it or not, people that work and are mature typically have at least $20k.
These are all good, especially the 2nd one, but I would recommend buying assets first and getting a secondary source of income before even taking on an extra car payment, IMO.
Very good and informative video!
Dave Ramsey is the most infuriating individual ever. He insults people for having one cent of debt while he himself has filed for bankruptcy multiple times.
That's why I tune in. Want to hear from someone who's made the mistakes. He's now worth multiple millions and is in no danger of bankruptcy anymore than I can see.
I don’t even like or follow Dave Ramsey but there’s a few ways to get it right, there’s many more to get it wrong.
I’ve seen 84 month auto loans starting to surface. Everyone should watch this before making their next car purchase!
Crazy how long people are taking loans for!