How Much Car Can I Afford (3 Methods)

Rule of thumbs are a great starting point to make a good decisions, going based on what you want and think based on your experience is usually a terrible idea, because your ideas tend to come from marketing, and most people don’t think about affording a car based on price of the car but instead on monthly payments of the car

So in this video, I’ll talking about 3 methods to buy a car, and not make a crazy bad mistake but the last one is the one that I would use and the most common sense idea.

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Marko - whiteboard

20% down

4 year car loan

10% limit of of monthly income



People are Wrong:

They say I cant afford to pay cash for a car

The real answer is the car I want, I cant afford it with cash

You liteally have cars under $1000, that can keep running long enouhg for you to be able to buy a nicer car



Here is this crazy math: $16,000 car is what you can afford if you make $3000 bucks per month

If you put down 20% that’s $3,200

If you take 4 years to pay it off, your monhtly bill is 299.38 at a 5% rate

And its less than 10% of your income



However:

This doesn’t include maintence

Doesn’t include insurance

And to be honest, for $3200 you can buy a decent car



Dave Ramsey

He has a simple rule

You shouldn’t spend more than half your annual income on a car

And you should pay cash for it



For example: if you make 3k per month, that’s 36k a year

So your budget is $18,000 which is 2k more than before

But the cash is, you have to save up to pay cash for it

But the good thing is, you don’t have to max out your budget anyways



The con:

Its the waiting people don’t like



3. Common Sense

- buy the car you can afford to pay for in cash and not stay broke

- this basically means you should still have money for a quick emergency, doesn’t have to be full emergency accoutn but atleast $500-$1000 just in case

- this is a rule for all the cars you buy, its really that simple



But here are Some buts:

One: if you have a bunch of debt, don’t waste years savings, instead save for a few month and buy a cheap car to allow you to payoff your debt

The point is the only time you can take a long time to save for a nice car, is when you covered all your priorities

Being debt free, savings for a full emergency account and also paying off a home



Tips:

Obviously this takes years

So its important the cars you buy are based on reliability and not based on want

The want comes later

If it takes you 15 years to the priorities you’ll probably cycle 2-3 reliable cars but if you go for luxury brands and speed cars, good luck



What car would I buy for $3200

Toyota Corollas, camry, yaris

Hunda Civic or fit

Bsaically nothing I like lol

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*Some of the links and other products that appear on this video are from companies in which Tommy Bryson will earn an affiliate commission or referral bonus. Tommy Bryson 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. I'm an Accountant but I'm not your Accountant, always review information with your Accountant/CPA and your Financial Advisor.

[StackorStave]

New to saving.. this is forsure good for the culture. Thank you bro🎯🙏🏾

[TheMondayWarrior]

I'll be honest I like the Marko rule personally, since it sounds like a decent compromise. I understand that it may not be the best and not the most logical (conservatively) model.

[PostLikeHakeem]

Dream car that I’ll probably be able to afford one day is a Lexus ES 300h with all the bells and whistles.

Dream car that I probably will never get is a Porsche 911 Turbo S.

[Quanfit]

dream car btw is c8 corvette and a jeep grand Cherokee high altitude

[jypyrio]

Hellcat swap crystler 300 50k ish maybe next year or 2

[ChaseLancaster]

Dream car is a Tesla right now. I just love the tech. Feels like I'll never get there. So far off from getting finances in check.

[joyrandolff]

My dream car isnt crazy expensive, but isnt one I could afford to pay cash for right now... but one day, I would love to drive off the lot in a brand new, fully loaded Mustang GT!

[DKWeathersevereweather]

Less than a year thank God from 19000 now 3400

[DKWeathersevereweather]

My car buying was a nightmare. They messed up my income. I was able to get a brand new car it cost me 20, 000 with only 34 miles they called me back and had to take the car back and gave me a 6 year old car for 19000 I was so mad

[Quanfit]

what if you know your field of will never pay $500k a year but you still want to buy a $32k-$40k car

[uptoolayte]

Car enthusiasts always get screwed in this kind of video. This advice always comes from people who only think of cars as point a to point b perspectives.

[johndavid]

Thank you for this wonderful video! I have incurred so much losses trading on my own....I trade well on demo but I think the real market is manipulated.... Can anyone help me out or at least tell me what I'm doing wrong?

[jeffreyboucher]

To me buddy.. the dream lasts a couple days your dream car or truck should be something you can slap a motor in yourself or quick repair on the side of highway cuz then you'll be running the streets and laughing when you're doing over a hundred 🤣