Car Buying 101: Budget (Part 1)

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This is Episode 1 of a new three-part series: Car Buying 101! In this episode, Ray and Zach discuss the many of aspects of preparing to buy a car, including budgeting, choosing the right car for that budget, and whether you should pay cash, finance, or lease.

[chrisg]

The best car payment is no car payment.🤣

[XennialGuy]

I do think that the majority of Americans are putting more than 25% of their gross monthly income towards their car payments, especially if you consider insurance and running costs.

[ericfriedle]

I like the idea. I take it a step beyond and say all fixed costs you have cannot exceed 35-40% of monthly gross. So take mortgage, auto, insurance away from work, and such.

This way you are not over on credit and you should have money for unexpected issues that come up like repairs. Your rule of 10% is an easy look but making sure your not over leveraged is really important for long term financial health.

[karlaherrera-ldel]

Thank YOU to your videos I was able to buy my dream car 2 days ago! Not only I saved money negotiating the out the door price, I caught them adding 2%percent on interest and made them changed to what I got approved.

[Oxios]

I see people ask all the time what they can afford. I tell them you’re really asking what you can get approved for, and I’ll answer that question, but you also need to have financial goals in general and those goals tell you what you can “afford.” And what you can get approved for and afford are drastically different numbers for the average person.

[WayApp]

Great breakdown of budgeting for car buying!

[shanky]

As someone who is an international student, this a really well put video!

[no_lft_shft]

I've never shopped for a loan. I've always just put my faith into the dealership to get me the best rate. By the grace of you guys and YouTube I've realized rate shopping may be the best thing to do lol. I'm going to start with credit unions. I'm trying to get the best rate possible this time. I have about a month and a half until my Tacoma comes in to find something. Wish me luck guys.

[phil]

Not many people use this common sense 10% rule, I sure do and I'm staying nice and cozy in my home and eating damn fine food, sure I could use a new vehicle but I have my priorities elsewhere, ill wait for better prices, the dealers are playing a greedy foolish game

[SupahBro]

@ 1:09 Funny enough, as a young software engineer, I'm working remote in my parent's basement. I saved up so much money working remote, I paying off a new Mazda CX-5 with a 40% down payment, and 3 year loan.

[johntinder]

I appreciate your channel and wanted to share some pertinent advice once given to me that allowed us to retire early on one income and raise a gaggle of kids to boot. I have given it to them as well. Some have made some mistakes financially, but their adherence to #5 is going to save them in the end. (They just don't know it yet)

1.) Pay cash for luxuries. (a new car is a luxury item)
2.) Buy things that appreciate, not depreciate. (depreciation on a new car is most always the greatest cost to own it)
3.) Cars are one of the worst things that people buy that ruin their net worth in the long term.
4.) The younger one is, the more powerful each dollar that touches your hands. (Don't waste young dollars. Invest them)
5.) Pay yourself first. (save a minimum of 10%-20% of your gross income as early as you start working and never touch it)
6.) Calculate projected depreciation cost/mile on your cars at time of purchase and allow no greater than .05 to .10 cents/mile to get a car at the right price with the right miles that make the 10 cents/mile limit work. (You will rarely get to these numbers buying new cars; i.e.: A new truck at 60K would have to be driven to about 500, 000 miles to get to .12/mile depreciation cost.
7.) Many rich people were merely poor people who decided not to be poor any longer.
8.) It is not what you make, it is what you keep that matters in the end.

[pokedemonty]

I missed this video yesterday, because I was at the car dealership. And he attempted to run my credit before even showing me the cars I had came to look at. I came in with my own financing, which they tried to neglect and say it wasn't actually approved, wouldn't allow me to leave so when he tried to go get me another car I didn't want. I walked out of the dealership

[Fishin-mission]

This rule would get me a 1974 car with my disabled vet pay lol but I get what yall are saying. Some people just dont know how to budget

[fortheloveofnoise]

Nissan Versa can be had for $17k at MSRP...so yes, there are cars under 20k...but I can't even afford that. 😅

[anthonymalovrh]

When I bought a 2016 Nissan Leaf in August of 2019, EVs were depreciating rapidly, especially those with shorter range, like my Leaf SV.

[SAINTSEIYA]

Great Advice..now here is a question.
What to do when car dealer practice the yo-yo scam. And to top it off on their contract states that they are allow to change the prince or interest of the vehicle to whatever they please at anytime after purchase?
I see a car dealer close to me that uses this practice very very often.

[stayer]

Have you mad an easy to follow video specifically on what is a good lease deal? With examples please?

[Stevie]

Hey Guys- Thanks to watching your videos-I just bought a 2023 honda Odyssey sport. White on black . Msrp sticker was 43, 050.00
I paid $40, 500 and received all weather mats and wheel locks for free that were not listed as optional fee on the Sticker. They showed me a piece of paper that had the invoice for $40, 300. So I paid $200 over invoice here in New York(Long Island) only thing I feel like they maybe got me on was that dealer optional Doc fee of $175 that they said was part of my dmv fee to transfer my registration.
3.9 rate for 4 years through Honda USA bank. I’m Tier 1* Just got off the phone with the sales manager..He said I can come
By for the cargo all season Mat and a first aid kit on him as well. Please rate my deal and LMK how you guys think did . TIA !

[matthewmauro]

There is also the 20-3-8 rule. 20% down. Finance no longer than 3 yrs. Monthly payments no more than 8% of monthly gross.

[fpvmississippi]

With interest rates so high, it’s almost cheaper to buy new car. I’m looking at Subarus and the have a 2.9 % program going on 😊😊😊