Buy the car or save

Lostinmythoghts Lostinmythoghts Registered User regular
edited September 2014 in Help / Advice Forum
I am 28 years old, soon to be 29 and live with my girlfriend who I believe is the one. I have an opportunity to buy a brand new mustang gt, a car that I have wanted long before I could drive. I have always settled for cheaper sports cars because I could not afford the ones I wanted. I just bought a 2013 mazdaspeed3 I'm November of last year as my last fun car before I settled down. My girlfriend is going to finish her masters degree in the spring and start looking for jobs so we can take the next step forward in our relationship... Buying a house! I have been saving plenty of money over the years, more than most people my age. Putting down what I have saved up towards a house of roughly 400k would make my payments roughly 1700 a month between the two of us. I currently owe 8500 on my Mazda, trading it in on the Mustang and putting down an additional 4k that I didn't budget for in my finances this year (gift money per say) would have me with a loan of 14k, raising my payments an additional 80 dollars a month. The difference between is about 10k between the 4k down and the extra 80 a month over 5 years. This is 10k that couldn't be applied towards the house which over a 30 year mortgage is a "$1,300". My other issue is that I car hop alot, I have had 6 cars in 12 years. I know I would be happy with this car but it's also not as practical as my hatchback now especially if I plan on having kids a few 2-3 years down the road. My parents think it's a horrible idea and think I should keep the money for the house my friends say go for it as this could be my last chance to have fun before the minivans and life takes over. On a side note my girlfriends mother has also said she would match what I put down and it wouldn't be at least another year before we would even start to look to buy a house.

Buy the car or save 85 votes

Buy
3% 3 votes
Don't buy
96% 82 votes
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Posts

  • MulletudeMulletude Registered User regular
    I agree with your parents. Save the money for a house.

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  • DjeetDjeet Registered User regular
    You will have time after you buy the house and make some babies to have your fun car ... if you still want it then.

    zepherin
  • Lostinmythoghts Lostinmythoghts Registered User regular
    Djeet wrote: »
    You will have time after you buy the house and make some babies to have your fun car ... if you still want it then.
    I don't know if I can afford it then that's the thing. I feel like it's a now or never opportunity. Once kids come, day care get expensive then there's college etc...

  • fightinfilipinofightinfilipino Angry as Hell #BLMRegistered User regular
    speaking from experience, loans are terrible.

    look at it this way: you'll have a great house that you will get infinitely more satisfaction from versus a car that will lose value the second you drive it off the lot.

    i'm basically in the same position as you and am intentionally putting off getting a new car until i feel like i can enjoy that purchase without worrying that spending that money should've gone to a good real estate investment.

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  • davidsdurionsdavidsdurions Your Trusty Meatshield Panhandle NebraskaRegistered User regular
    Can you instead just save the money you were going to use into a fund you continue to add to, so, say, in 25 years when the kids move out, you can go out and get the 75th anniversary or whatever Shelby Mustang Cobra BOSS 450 GT Daytona Pace Car Edition?

    Just a thought.

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  • kaliyamakaliyama Left to find less-moderated fora Registered User regular
    edited September 2014
    If you won't be able to afford a mustang once you have kids you can't afford it now because you need to save for kids now if you're going to have them in the next 5 yrs.

    I dealt with this question by opting not to have kids at all. We are entering a new gilded age that will be made worse for us americans by the decline of the American empire, ecological collapse, and resource scarcity. I couldn't guarantee my kids a place in out new ruling class by getting them into andover/Exeter and the right social connections growing up, so figured it best not to inflict the mid 21st century on them.

    Otoh if you can budget yourself buying it 3 years from now by saving on top of kids savings, then do it in 3 years. You get more value out of driving the Mazda than trading it in so you'll be better off on every respect.

    kaliyama on
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  • LostNinjaLostNinja Registered User regular
    You mention car hopping to what basically amounts to a new car every two years, if you get this car will you be done doing that (thus saving some money there in the long run), or are you done doing that now anyway as you are saving for the house?

  • Lostinmythoghts Lostinmythoghts Registered User regular
    LostNinja wrote: »
    You mention car hopping to what basically amounts to a new car every two years, if you get this car will you be done doing that (thus saving some money there in the long run), or are you done doing that now anyway as you are saving for the house?

    I never plan on getting a new car it just so happens that way. I was given my grandmother's 95 Saturn as a first car and after saving money I bought my first car a 2003 cavalier. After having that for a few years I wanted a performance car but couldn't afford a pricy V8 at and I refuse to buy a used sports car so I settled for a 2005 srt 4. I paid that off and sold it because it was starting to have issues that I didn't want to deal with and bought a 2011 sonata... Huge mistake I got a lemon and after battling back and forth with the dealer as well as hyundai I traded that it on a Ford Escape as an impulse buy as I wanted to get away from the sonata. My brothers car was starting to have problems and he was looking for an suv so I sold him mine. If he could have held out one more year I would have skipped the Mazda. I like the Mazda, I have no issues with it. It's just doing a poor job of being what I want it to be.

    secretexhibition
  • SkeithSkeith Registered User regular
    If you're basically satisfied with the Mazda, keep it. I don't know if there are any student loans to be considered, but regardless, the money that you'd be plopping down on the Mustang would be better used going towards that house, or even as a bit of "oh shit"/rainy day money.

    mts wrote: »
    heres how i see it being a total win situation for you
    1. stay with your wife while she dog sits. this wins husband points since she knows its out of your comfort zone
    2. have sex all over her friends house so that the next time you see her friend look at you condescendingly, you can wink back knowing you did the freaky deaky where she eats her cheerios.
  • JasconiusJasconius sword criminal mad onlineRegistered User regular
    you're not missing anything with the mustangs.

    the speed3 isn't amazing, per se, but it's a solid sporty car with practicality built in

    don't worry, they'll be cranking out Mustangs forever. there will always be a better one waiting when you have the money

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  • MagicToasterMagicToaster JapanRegistered User regular
    I don't know if I can afford it then that's the thing. I feel like it's a now or never opportunity.

    Then you can't really afford it now.

    You're starting a new financial stage in your life with the house, and it's great that you have all that money saved up. But, be cautious about making too many money commitments.

    MulletudeNightDragonJaysonFourSixBobblealltheolive
  • EclecticGrooveEclecticGroove Registered User regular
    You are in the same situation (more or less) as my brother was years ago.
    He was in a serious relationship, had some money saved, was looking to be starting family things in the not to far off future.

    He went out and bought a Mustang Cobra because why not? Was a great car, he had a lot of fun with it.
    Then they got a house and started a family. He wound up selling it for just a bit more than he still owed on it so he could get something safer and more practical to ferry his new family around.

    He only had the car for, I think 2 years, maybe 3, before he had to go and sell it... And most cars like that drop a HUGE chunk of their value the moment you drive them off the lot.

    So I agree it's just not worth it, especially since you know you're going for a house right now not too far off.

    Keep the car you have now. If things stay good with the girl, then get the house settled. Decide if you're having kids for sure. If you aren't, awesome, get a car then, if you are, also awesome, have kids, have fun, drive a "dad" car for awhile.

    When they grow up more then you can get a fun car since you won't have to worry about car seats and stuff anymore.

  • ceresceres When the last moon is cast over the last star of morning And the future has past without even a last desperate warningRegistered User, Moderator mod
    Don't but any car you can't cram a car seat into of you think you might want kids because you never know what situation might come up where you need to. I say this from experience.

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    JaysonFourBobble
  • DjeetDjeet Registered User regular
    As sports cars go, the Mustang isn't the worst option for having as a parent, since you'd have functional back seats for the kid(s) until they reach near adult proportions. I wouldn't want to go on a road trip in one, and getting them in and out of a car seat is going to be much easier in a 4-door.

    Given that you're projecting large fixed expenditures in the next couple years, and unknown kid-related variable expenditures afterwards, your solution is to front load spending money now? Eventhough you've tried to capture the relative cost of used Mazda vs. new Mustang I think you're missing something major in your calculus. Personally, my favorite car is one that is paid off. Consider paying off the Mazda and afterwards banking your car payment into a "sports car" fund. That leaves you the most flexibility. Then when it comes time to sell the Mazda you can re-evaluate; you may want other things more than a sports car. Worst case scenario is if you move forward with this trade and a year or 2 later you have to take a bath on the Mustang cause you felt you need a more practical car.

    CelestialBadger
  • CelestialBadgerCelestialBadger Registered User regular
    Sounds like you have a great car. Save the fancy sports car for the mid-life crisis!

  • zagdrobzagdrob Registered User regular
    edited September 2014
    I'm going to have to disagree with the majority of the thread...you can always come up with a reason to deny yourself something you want for a better situation down the line.

    The sensible thing almost certainly would be to pay off the Mazda and drive it into the ground. Not having a car payment is a wonderful thing, you're talking $300 or so a month right back in your pocket and in theory you should be using that $300 to pay off other debt or pad your savings account or save for a downpayment / refinance on your house or whatever. That's is probably the 'by the book' thing to do and if you're fine with it, do it.

    While I wouldn't recommend trading in a perfectly adequate Mazda for no good reason other than wanting a Mustang, if it's not meeting your needs and the Mustang does - or you're going to be buying a new car regardless - the Mustang probably won't be a worse choice than another car. If it's something you really want that strongly and think that will make you happy go for it. If you don't go crazy with your option packages, a Mustang isn't unreasonably expensive which is why you see them everywhere and not a bad car all around.

    Don't strap yourself to buy it, but if you are in a solid financial position now it's as good a time as any.

    I will say that a 2+2 coupe isn't the ideal car for moving kids around, but it's not especially bad until the kids get bigger. Our four year old is quite big for her age and gets in and out of the car seat in the back of the GTO just fine. Even if it was a bit tricky, we have a family SUV that we usually drive, so it's only an issue on occasion.

    Hell, my sister and I are both tall and - while cramped - we rode in the back of our parent's Mustang as teenagers without too many issues, including several multi-hour car rides. Not ideal, but doable. The whole 'need a big car / SUV for the kids' argument is somewhat weak for one or even two kids especially if you have another larger vehicle.

    EDIT - really, home ownership is a better argument for a big vehicle than kids. Getting shit home from Lowes is a hell of a lot easier with a truck or SUV.

    zagdrob on
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  • NightDragonNightDragon 6th Grade Username Registered User regular
    I'm not somebody who's experienced in your exact situation, but I'm definitely somebody who has often gone the way of "financial responsibility" over "financial fun" most of the time. Sometimes I've been frustrated that I decided to do something responsible with the extra cash I had at the time, rather than do something fun with it like buy some tech or travel somewhere.

    That being said, once I've taken care of all the "responsible" things and have managed to save up enough to do something fun again, the "fun thing" is waaaaaay better, since I don't have any guilt or nagging responsibility over my head on what I "should" be using the extra cash for.

    Considering you may only be using this car for a few years at most, IMO the answer is very clear. The money could do huge things for you if placed elsewhere. You have decades and decades of your life to save up and buy fancy new cars (and you will). Think about you [and your future family's] "needs" versus your "wants". Once you have some money saved up and feel more financially secure, with an emergency fund, after all of your highest priority "needs" have been taken care of, then you can think about the more expensive "wants" without guilt or fear about having fun.

    JaysonFour
  • CiriraCirira IowaRegistered User regular
    I had a very similar conversation with my now wife 2-3 years ago. We ended up saving for the house and were able to afford a house in a nice place that we can grow into comfortably. The house is a better use of the money to me no matter how much you may want the sports car.

    You may also want to think about how much debt she potentially has with her Master's degree. That could hurt getting a home loan and require more of a down payment if she is on the loan. My cousin is still paying off her wife's Master's degree and it takes a HUGE amount of their income in order to do so.

  • JaysonFourJaysonFour Classy Monster Kitteh Registered User regular
    Your buddies are only pushing you towards the new car because it'll be free enjoyment they get out of riding around with you. I'm fairly sure that they're making plans to borrow it off you to use even before you buy it.

    I look at it this way- this is an excellent time to show your girlfriend just what kind of guy she's thinking about marrying. She may not be saying anything, but she's watching what you do with that cash very closely, because it's going to tell her where your priorities in life happen to lie- with you still having fun as a bachelor (buying the car) or being ready to settle down and start a family with her (putting it towards a nice place to live).

    If I were you, I'd put the money towards a house. Cars will come and cars will go, but a house in a decent neighborhood is one thing that you'll always be thankful you saved up to get.

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  • Dr. FrenchensteinDr. Frenchenstein Registered User regular
    you seriously have no idea how much of a help a larger down payment is on a home. you will save yourself SO much money in interest down the line. if you are planning on starting a family in the next few years, the sports car will be the first thing to go. you don't want to take a hit on that trading it in. Just stick with the Mazda and save your dough. you also need to think about saving for that engagement ring as well.

    JaysonFourschussMichaelLC
  • KitharsisKitharsis Registered User regular
    Don't buy a brand new one. Do some looking and find one a few years old with low miles. You might luck out and find one with some aftermarket parts that make it go faster and louder! If you buy used you can go ahead and flip it in a few years if you need to and not take as much of a loss.

    With fall coming around dealers are trying to get rid of their sunny day cars before the snow and ice get here. They might work a deal with your trade to make your loan to be pretty reasonable.

    Full disclosure, I bought a 2007 Mustang GT two years ago with 20k miles. It's just as shiny and fun as the current year models. I think it looks better too but I am obviously biased <3

    I too am looking to buy a new house and have kinds in the very near future. After witnessing how much time and money goes into all of that I am glad I have the chance to have a fun car for a while until all the responsibilities pile up.

    So buy a shiny used one, then buy a truck in a few years when you realize you need to haul things instead of haul ass.

  • see317see317 Registered User regular
    Another vote for the "be boring, save your cash" side.
    Once you buy the house, you will find out that something needs replaced, fixed, upgraded or just needs a fat pile of cash stuffed under the wobbly leg so it sits evenly.
    It's pretty much inevitable.

    Ringo wrote: »
    Well except what see317 said. That guy's always wrong.
    JaysonFourSkeith
  • PacificstarPacificstar Registered User regular
    I don't know what you do for a living, but have you capped out in your current profession? If not, consider annual raises or any raises you might get on promotion. If it was me, I'd drive my current car into the ground. On the other hand, we're only young once...

    There are a lot of things I regret not having done because I felt like I didn't have the money. In retrospect I could have done a lot of those things and have been just fine.

  • QuidQuid I don't... what... hnnng Registered User regular
    Buying a mustang is definitely not a now or never situation. You'll have loads of other chances to buy one in your lifetime.

    a5ehrenzepherin
  • Lostinmythoghts Lostinmythoghts Registered User regular
    Thanks guy's, I told the dealer never mind and decided to keep saving. It was a hard decision, but the right one. Someone mentioned about an engagement ring, which is another reason why I decided to scrap it. My profession is in IT and I am far from being capped out.

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  • davidsdurionsdavidsdurions Your Trusty Meatshield Panhandle NebraskaRegistered User regular
    Well, shit, man, don't go that crazy on the ring either. My wife loooooooved her ring, and I spent maybe 400 bucks on it almost ten years ago. A couple years ago it was lost during a holidays trip, which was devastating. But the silver lining was that we were in a better financial situation and could go a little crazy on the replacement ring.

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  • CelestialBadgerCelestialBadger Registered User regular
    Yeah, if you are thinking of a "big purchase" level of engagement ring, don't. Of course, you have to know your wife. If she is expecting something spectacular then you need to have a word with her about it. But personally I don't know how much my engagement ring cost and I don't care. If your wife is not obsessed with diamonds, google "conflict diamonds" and think again. Other precious stones are more beautiful (because they have a colour) and come without so many ethical problems. I know the jewellery companies tell you to spend x months wages on the ring, but they would tell you that, wouldn't they?

    NightDragonJaysonFour
  • zepherinzepherin Registered User regular
    Here are some things to consider.

    1. I have seen a husband buying a mustang without consulting his wife cause a divorce. Talk this over with your significant other.

    2. You can buy a house, and use the money after you have the house to buy a mustang. It is common to get a bunch of money together for a down payment, and the bank decides you can do it for much less, but you have to have all that money together first before they decide they can do it for a lower down. I know someone who funded a 72 inch TV this way.

    3. This is not a now or never proposition. I could buy a new car today if I wanted too, and if I want to buy a new car next week, or next month or next year I can. You can always buy a Mustang. Feeling like you have to do it now is an illogical compulsion.

    4. Don't be ridiculous with the engagement ring. That 3 month or 2 month or whatever income thing is fucking ridiculous. Talk to your significant other. All things in life come with trade offs and sacrifices. Tell her this is how much wedding money you have budgeted, ring, honeymoon, wedding, etc. And lay out scenarios. If you have 15k you can spend on the wedding. Yes she can have all that in ring form, but the rest of the wedding money is going to have to come from her, friends and family, the honeymoon will be to like Kentucky or Tennessee. If she wants you can do 3.5k for a ring, 5k for a wedding, and take a trip to Europe for a honeymoon. Tell her about the budget, and about options. She knows you all are thinking about getting married, she knows that a house is in the cards, and she probably suspects you may want a cool car.

  • CelestialBadgerCelestialBadger Registered User regular
    It is not very romantic to propose with a budget rather than a ring. *Do* buy a ring. *Don't* burn a month's wages on it.

    The only exception to this is if she has been dropping heavy hints about wanting an enormous sparkler - commenting on friend's rings, leaving magazine pages open at huge diamond rings, pausing in front of jewellers to gaze at their most expensive rings, etc. In this case, it is better to have her choose her ring and be prepared for a wallet shock. But most women would rather have a deposit for a house than a fancy ring.

  • GaslightGaslight Registered User regular
    The "two months salary" thing for engagement rings is entirely the product of marketing by the diamond companies. Actually, the whole practice of giving diamond engagement rings to begin with is a "tradition" that the diamond merchants invented through marketing campaigns. And when it started out, just one month's salary was the figure set to prove the authenticity of your undying love and devotion. Then when they realized people were swallowing that line they said, "Well hell, let's make it two months." I'm surprised they haven't bumped it up to three.

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  • zepherinzepherin Registered User regular
    edited October 2014
    It is not very romantic to propose with a budget rather than a ring. *Do* buy a ring. *Don't* burn a month's wages on it.

    The only exception to this is if she has been dropping heavy hints about wanting an enormous sparkler - commenting on friend's rings, leaving magazine pages open at huge diamond rings, pausing in front of jewellers to gaze at their most expensive rings, etc. In this case, it is better to have her choose her ring and be prepared for a wallet shock. But most women would rather have a deposit for a house than a fancy ring.
    Fair enough. There are more tactful ways of putting it than me, maybe with what ifs and such, or maybe not. Maybe going to a jewelry store with her and looking at rings, "just to look" could also be productive, I don't know, I'm not a lady, and my GF readily admits that I could be more romantic. I do know that money is finite, and large decisions with money, say a Mustang, should be discussed openly and frankly. As I said before I saw a mustang cause a divorce.

    zepherin on
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  • KitharsisKitharsis Registered User regular
    Oh, good lord an engagement ring?

    Yeah, full stop on the car if you're thinking about that along with everything else.

  • a5ehrena5ehren AtlantaRegistered User regular
    zepherin wrote: »
    Here are some things to consider.
    2. You can buy a house, and use the money after you have the house to buy a mustang. It is common to get a bunch of money together for a down payment, and the bank decides you can do it for much less, but you have to have all that money together first before they decide they can do it for a lower down. I know someone who funded a 72 inch TV this way.

    Put as much down as you can. If the bank says you don't have to put down as much as you set aside for it, do it all anyway. Amortization tables are a real bitch...even at current low rates, every dollar you put down now saves you like $2.50 in interest over the life of the loan. And that's without calculating the effects of getting you closer to 80% LTV, etc.

  • tinwhiskerstinwhiskers Registered User regular
    a5ehren wrote: »
    zepherin wrote: »
    Here are some things to consider.
    2. You can buy a house, and use the money after you have the house to buy a mustang. It is common to get a bunch of money together for a down payment, and the bank decides you can do it for much less, but you have to have all that money together first before they decide they can do it for a lower down. I know someone who funded a 72 inch TV this way.

    Put as much down as you can. If the bank says you don't have to put down as much as you set aside for it, do it all anyway. Amortization tables are a real bitch...even at current low rates, every dollar you put down now saves you like $2.50 in interest over the life of the loan. And that's without calculating the effects of getting you closer to 80% LTV, etc.

    Eh, rates are still really low and the interest is deductible, given what he's considering that knocks off 25-28% of that $2.50. Especially in your 20s when you can/should invest in higher growth things, put enough down to not get PMI and then Roth the excess.

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  • Eat it You Nasty Pig.Eat it You Nasty Pig. tell homeland security 'we are the bomb'Registered User regular
    unless you are in a position to get a spectacularly good deal on the new car I would not buy it; as others have said if you wouldn't be able to afford it later, you can't really afford it now and cars are one of the worst things to purchase by leveraging yourself.

    It also seems like you need to evaluate what you want a bit better; you've wanted a brand new mustang GT since before you could drive? What in the hell does a late 90s GT have to do with buying a car in 2014?

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  • Inquisitor77Inquisitor77 2 x Penny Arcade Fight Club Champion A fixed point in space and timeRegistered User regular
    Dude, you know what you should be doing.

  • azith28azith28 Registered User regular
    Your at the age and circumstance where practicality should trump desire. Granted I've always been wierd in that respect...Give me a used cheap car that runs well and I'm happy, and I think I'll always be that way. Fancy cars look nice but they seem kinda pointless unless you can also afford your own racetrack to ride them on.

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  • BlindZenDriverBlindZenDriver Registered User regular
    Get the car. It is not like crazy extravagant or anything like that and you will forever regret not getting it.

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  • witch_iewitch_ie Registered User regular
    My husband loves his muscle cars. We've been together for a long time and right now he's drooling over the new Dodge Charger (he has a Mustang already). While we can't afford it right now, I know it's something that's important to him and so when the situation allows, I'm going to support him in getting one. Understanding and supporting each other's dreams is part of having a great and enduring relationship. If you haven't already, you should share your love of the Mustang with your girlfriend. It's a financial goal of yours to own a house, support kids, and get a Mustang. It should be worked into your future. You'll both know when it's the right time to buy one and then you won't need a poll ;) .

    CelestialBadger
  • Lostinmythoghts Lostinmythoghts Registered User regular
    unless you are in a position to get a spectacularly good deal on the new car I would not buy it; as others have said if you wouldn't be able to afford it later, you can't really afford it now and cars are one of the worst things to purchase by leveraging yourself.

    It also seems like you need to evaluate what you want a bit better; you've wanted a brand new mustang GT since before you could drive? What in the hell does a late 90s GT have to do with buying a car in 2014?

    I was quoted 5k under Msrp. They are selling used 2013s for the price I was given of a brand new 2014 so yeah it was a great deal. My current car payment is only 171 a month getting this would put me at 250 a month... Not much more. What does a 90s mustang and a 2014 have in common? Other than the 5.0L motor, nothing really. It's just a car I have always followed and one I have always liked and could realistically afford. I like other cars too but I think a 100k corvette is out of my price range at this point.

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