How to Buy a Car the RIGHT Way!

How to Buy a Car the RIGHT Way!

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[trackee]

Caleb Hammer mentioned your rules in a financial audit and I had to check out - great points! I cannot afford any cars with these rules, so I'm going to have to save up a lot more cash for a down payment!

[edhcb]

Here comes the “ they’re out of touch” comments from viewers who want to buy cars that they can’t really afford.

[domdrty]

Right now is a tough time to buy a car. Used prices are still high. In general new cars are selling at MSRP, but interest rates are high.

[johnbru]

20/4/10 has been around for a long time, I always figured Brian took that and went more conservative

[SRTBOAT]

I was fortunate enough to buy my first car in cash. Took a lot of saving in high school, but 10yrs later, i'm glad i've never financed anything besides my house.

I know others will be forced to finance cuz they need a car, but for any of you who do have the choice, always do a cheaper car for cash. Old Civics and Accords are great cars for like $4, 000.

[cchoi]

This works out similar to the financial samurai 1/10 rule

[xoxrazzyxox]

I was thinking you were saying 8% of my net income and was starting to panic 😂 I can afford a nice 10-11k car with that formula 😊 I feel sorry for people on really low incomes though. It’s hard out there 😞

[bpenguin]

does the 20/3/8 rule always apply no matter what the interest rate is?

I am leaning towards buying a new car soon, not out of necessity, but because the car I want is a lifestyle change to improve my happiness.

However, interest rates are through the roof ... If I can achieve 20/3/8 on this purchase, should I still consider even though the interest rate will be 6-8%?

[WTJBlog]

Always have agreed on the 20 and 3 part. The 8 seems way way way too high to me. I think maybe 20/3/5 I would be comfortable with. Then again, I am always a cash buyer only.

[AustinMathias]

I have a luxury car (Audi S5) and it's the best car I've ever owned.

[czarek]

What is the right way of getting a car? Just dont do any loans, buy one you can afford and save for it. Car debt is probably one of the dumbest loans you can get from financial point of view

[joelthorne]

Why not finance and invest the money in a good mutual fund that would otherwise go toward paying cash?

[supton]

Cars under $1, 000? :) I went through a $200 truck in high school and later a $150 truck in college, and I'm younger than you. :) Just not nearly as financially wise (gauging by all the new ones that came later).

Good advice. It hurts, but good to hear all the same. My 24 year old beater is still going, but boy has my mind been doing all it can to justify a payment again. Even if it's high apr on used, it won't be as old! I have this nagging fear that if I save up for a year... in a year all the worthwhile used cars will simply have appreciated by that amount, keeping me at net sum zero.

[generector]

Lawyers for Americans
All numbers from a car dealer are useless, most are made up. What you want to know is the total amount for the new car when paying cash, in other words, the amount that you put on the check and is this amount with or without tax. The amount should be agreed to by both parties and including the vin number before you go into a dealership. You have to decide whether this is a fair price.

1. Objectives : Establish total or the check amount price is with or without tax and with the vin number
2. Alternatives : Find dealership with base models in stock or in route that have listed the correct MSRP and a less insane destination. No destination should be over 600 in your calculations. You can travel great distances, to almost any dealer due to insane markups.
3. Offer or Counter Offer: Calculate your offer

Copy this into your email.
Hint: The MSRP is marked up by the same amount they ask for up front on lease.

[blairkinsman]

I won’t do either of the financing options. Ur averages from your other video on this topic, one consumer has a payment of 902 monthly (average car value, your terms) and another consumer pays 509 (average car value, average terms). Meaning that life adjustment gets made for that money to come out of the bank account. I’m a mutant so I would do this: beg, borrow, bicycle, bus, or ber for 3 months - put 900 a month in the bank. I’ve saved 150 a month insurance, so put that in also. Total $3150. Buy a car for $3150. Won’t be great, won’t need to be; only has to last 6 months. By then I have $5400 in the bank and I sell my first car for half what I paid 1575 total $6975 and buy a car for $7G. It lasts a year - 10, 800 + 3500 buys me a car for $14, 300. It lasts 2 years - 21, 600 + 8000 (bit better than half now) buys me the example car for $29600 cash. Now I can cut back a bit and be average - save 400 a month for retirement and put 500 a month in the car fund. 6 years later I have 36, 000 in the bank and my car is worth 10 so I can upgrade to a car worth $45G. My retirement account (400 after tax, 500 before, @7% for 6 years) is worth $44G. Repeat and repeat. I still drive a decent car for $45G each cycle, and my retirement fund is now worth $210G. Mutant thinking wins !!

[halter]

I'm not sure how well this has held up. According to these rules, as a mechanical engineer without debt, I wont be able to afford even a decade old Honda Civic?

[davidcash]

Be honest, who actually understood that MacGyver Quote? LOL
Guys, you are letting your age is show!
🙄

[fnqadv]

The right way is with no car loan. Save up for 3 years and pay cash.

[kendalwashington]

I hear you and agree, however 😄 if your over 40 and you have the opportunity to get the car of your dream, and you have to stretch that note out a few more years??? Go for it. Life is too short. (Assuming the house and kids are all doing satisfactory)