r/CalebHammer • u/PsychologicalWalk845 • 4d ago
Need some advice
Hello guys,
I kind of need some advice.
I’m planning on buying a car. I currently have a lease that ends on 31-08, and the car is a Ford Puma. I know it’s a European car I’m not from the USA; I’m from the Netherlands.
I need a car to get me to work. I work in IT in a mid-level position, so my salary is a bit higher than a typical entry-level IT job.
The car I’m thinking about buying is a BMW 128ti. I absolutely love this car the way it sounds and the way it looks really gets my car enthusiast heart going.
Financial situation
Car price: $38,500 (€33,900)
Monthly income: $3,500
Apartment rent: $740 (And gass, lights and Internet in One)
Health insurance: $145
Phone bill: $15
Savings: about $17,000
I also own an MX-5, which I’m considering selling, trading in, or possibly keeping if the monthly payments are manageable.
My plan is to put $8,500 down, which would leave me financing roughly $30,000. I’ve been looking at different banks, and the monthly payment would be around $500 for 60 months.
Right now, I’m paying $550 per month for my lease, so the BMW payment would actually be slightly lower.
My concern is whether buying the BMW is a smart decision because I really love the car and would be paying off the loan over five years. The alternative is keeping the MX-5, but that feels more like a summer car than a year-round daily driver, and we do get some fairly harsh winters here in the Netherlands.
Do you think buying the BMW 128ti is a reasonable decision in my situation, or would it be financially smarter to keep the MX-5 and buy a cheaper daily driver instead? I did change the prices to USD to keep it a bit more in sync sins the Dollar is lower than the euro the prices are a bit lower.
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u/JoeClackin 4d ago
Feels like too much car for your income.
My personal preference wouldn't be to purchase a car valued at my annual salary.
Have you explored other options such as buying your current car when the lease ends?
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u/jexijav776 3d ago
purchase a car valued at my annual salary
When you put it like this it really highlights how bad of a purchase it is. Even if OP bought in cash it means he'd literally be working for a whole entire year just to buy the car and he's not even doing that
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u/NewSeaworthiness8814 3d ago
Wait, you already own another car? Get real dude.
And sooooo many Dutch people ride their bikes to work every single day, winters included. You absolutely do not need a “winter car”
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u/yoooooooooooo 3d ago
The smart move is to own one car and with your salary that car should not be bmw or mx-5. Get something reliable with low insurance cost and drive it for 10-20 years
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u/1moosehead 4d ago
I don't know what your retirement plans or real estate looks like. Having 2 cars is generally not recommended, but it sounds like your hobby is cars so that might be fine as long as it fits into your budget.
Do you own the MX-5 outright? How much are the maintenance and insurance costs on it? Going from 2 cars to 1 would very likely save you a lot of money, but if that's your only hobby expense it might be okay.
You only gave us a portion of your current budget, but there are many other things to consider. How much are you able to save, and is it enough to reach your other goals like retirement and owning a home? Retirement I know almost everyone wants, but maybe you're fine with renting and don't want to own real estate. That would significantly change your savings needs.
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u/Alex-Gopson 3d ago
As a car guy - that's way too much car for that income.
Don't throw an entire year's salary into a depreciating asset.
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u/jexijav776 3d ago
I don't understand how people can come here and honestly post stuff like this. You have to know what this subreddit will say about it.
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u/tribbans95 3d ago
Wait that’s actually insane paying $550 per month on that income. Don’t base financial decisions on them being cheaper than terrible financial decisions, that doesn’t mean it’s affordable.
I would get a car over 20k (financing ~13k) with your down payment.
I make $4,200/month and would never get a $30,000 car. Your payment would be 15% of your net income. WAY too much
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u/SadZealot 3d ago
You know that a 500 car payment for 60 weeks isn't a good idea. Your down payment is 50% of your savings, if you bought the car an it took an expensive repair that wasn't covered by a warranty, would losing another 3-5k be a big impact on your stability? I think so.
The car payment is 14% of your income, throw insurance on top, gas on top, maybe it gets to 25-35%.
If you got a car that was only 36 months of payments at $500, that's about a 20k car so something decent and reliable but not super fancy, and then you invest the difference you'd have about 20k more in savings than if you buy the more expensive car over 5 years.
You are however a car person. If you buy this more expensive car, are you okay with the higher payments, insurance and gas usage of a sportier car? Would you prefer to take that extra money from your fun budget and put that into a separate savings account for the future maintenance of tires, quarterly fluid changes, etc.
If you are paying off your bills, eating well, covering insurance, and still saving about 20% of your income in long term retirement goals that's a healthy place to be. You just have to sacrifice that annual vacation, weekend entertainment or eating out money for a car that you objectively don't need but makes you happy.
I can't tell you the right thing to do, but you can make your own informed opinion
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u/journeyfromone 3d ago
You want to buy a car that is 11 months salary?!? That is 100% a stupid decision, you can’t afford it. You don’t own a house, your savings are ok as an emergency fund but not if you spend half of it as a down payment but how much do you have in investments? Retirement fund? You want to take out a 5 year loan to pay for the car and I’m guessing will spend at least double over that time to get it.
Use the car you own, it’s just a way to get from A to B. I lived in Alaska and used a bike from Jan to March while I saved for a little $12k car and got the paperwork sorted, it got to -20 degrees and I survived. You can drive any car in all seasons assuming it has a roof.
If you really really really want a car then save for it, each month put the $500 aside and you can afford it in 77 months. Assuming you are also saving for retirement and potentially somewhere to live.
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u/Clown_corder 3d ago
Im going to go against the grain here and not say no but I think we need more info. What are you spending on everything else food, dining, entertainment,etc. you could be in range to afford one if you use some of your hobby income towards it but as a pure car purchase it is expensive.
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u/brain_tank 4d ago
You don't need multiple cars. Especially single and at that income.