How Much Car You Can ACTUALLY Afford (By Salary)

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[olliehopnoodle]

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".

[SoLaR]

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.

[orion]

Telling me to like a video before I've seen it, is like a server asking for a tip before they take my order...

[sjholmes]

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.

[humphrey]

well done Graham! thanks for the shout!

[refineme]

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.

[LietSayri]

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.

[OliverTilney]

Drive until the wheels fall off” is popular advice. But I’m wondering about the “cost” of no longer having a reliable vehicle and loans to pay . I’m still driving a 2008 Honda CRV with over 210k miles on it that was paid off over 10 years ago. This is why we all need a good IRA . Choosing a Roth IRA is advantageous as it uses after-tax funds and allows tax-free growth. When I retired, I had $3M million saved, and I won't be taxed on my withdrawals.

[itzmrchan]

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.

[ryancrawford]

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.

[prestonjensen]

honestly with how expensive car ownership is, going car-free is a really good idea for a lot of people

[JeremyWamhoff]

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.

[frankjennings]

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.

[RJ_]

There are also people who actually enjoy cars 😂😂😂

[Jooolee_]

Great video Graham. You are so helpful to so many of us learning how to manage our money

[Coffeetime]

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.

[Hondatsun_Dan]

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!

[vickmaturu]

Super helpful man! Going into my 20's kinda scared about financial advise, but your videos are very insightful!

[vipercat]

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.

[AkromaUW]

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 :)