Quote:
Originally Posted by AleksanderSuave
I just turned 30, so I might have some perspective to share with you.
Unless you own property, and your current car is giving you trouble that you cannot fix for an amount lower than the car's worth, you dont need this car.
Your job situation is likely not as stable as you imagine it to be during this Financial crisis.
If your current car isn't paid off (or worth reasonably more than what you have owed on it), you're not strong in a position to buy another, financially, so you'll be rolling over old debt to get into new debt.
With the car payment, you will also have insurance, maintenance (tires and modifications arent free).
That will easily eat the $1000/mo income surplus you're saving now.
Buy a house. Rates are historically low. I'm on house number 3 now. The only thing I've ever regretted is not buying a bigger house, when the market was prime for it, because when I sell any house Ive owned, Ive always doubled my money.
If you have 6 month's worth of living expenses saved up, you're doing solid. True living expenses. Cost of everything you pay for now, monthly.
Double that to a year's worth and keep it safe. Use that money to build a secondary stream of income or equity. Then buy whatever car you want.
TLDR: Economy is uncertain now, you have decent income, but thats without knowing relatively what your expenses are. Job can disappear and getting hired now for good money is close to impossible.
The only loan I would sign for (and currently am) would be to refinance down any interest rates on existing debts.
Cash is king.
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Thanks so much for this comprehensive reply. Really appreciate the advice. Also, congratulations on the milestone.
No trouble as of yet with my current car, aside from the fact that I'll be moving cities for an indefinite period of time and the shipping will cost me nearly $2k - a new development I've been thinking about. My car is probably worth $2-4k more than the debt on it, depending on how it's sold.
Just to clarify my earlier statement, the $200 incremental payment includes the increase in insurance.
As for my savings, I recently calculated it and I have around 1.5 years of living expenses in liquid assets.
You're totally right, I've been looking at opportunities to buy a house or a condo. However, at least in the markets I'm in, it seems like the low interest rates are supporting home prices along with the limited amount of supply. Any thoughts as to when the distress will start to materialize in home values?
Anyways, as an alternative to shipping my car or overextending myself on an M240i, I found a '16 M235i online for $24k. My main concern is that it's not CPO and I'm not familiar buying from a private party. Any thoughts on this?