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I have to agree with others. You may be able to afford it now but like the rest of us you cannot read into the future. Something may happen in a year or two (loss of job, having to move out, etc) that will make the car you "want" not so easily affordable. I was once in your position and I strongly urge you to reconsider something more affordable for your income.
Good luck.
May I ask what is the suggested amount of vehicle loan to income ratio? Is it 1 to 1 so make 40k no more than 40. 1 to .5 make 40k no more than a 20k loan?
As for OP just really consider if it's the right choice getting new and shiny is fun I have made the mistake before getting too nice or expensive vehicle without thinking big picture and after the initial glow wears off I realized I should have gone with something used and more affordable. The amount you would likely save if you looked for a 2012 model or older with low mile and possibly still under manufacturer warranty is astounding not just on the front end but on the interest, sales tax, property tax and insurance premiums.
Good luck with you choice.
Sam
@Ragelog wrote:May I ask what is the suggested amount of vehicle loan to income ratio? Is it 1 to 1 so make 40k no more than 40. 1 to .5 make 40k no more than a 20k loan?
As for OP just really consider if it's the right choice getting new and shiny is fun I have made the mistake before getting too nice or expensive vehicle without thinking big picture and after the initial glow wears off I realized I should have gone with something used and more affordable. The amount you would likely save if you looked for a 2012 model or older with low mile and possibly still under manufacturer warranty is astounding not just on the front end but on the interest, sales tax, property tax and insurance premiums.
Good luck with you choice.
Sam
The ratio I have always heard is that your vehicle worth (not cost) should be no more than half your annual income. So, for OP, $20K. Now there are, of course, car afficionados who collect vintage cars. But for the average Joe I think this is a good guideline.
Personally, it is frightening to me to see some of the loan amounts that are in the approval section in the stickies of this forum. But that's just me.
@DrJim wrote:
@Ragelog wrote:May I ask what is the suggested amount of vehicle loan to income ratio? Is it 1 to 1 so make 40k no more than 40. 1 to .5 make 40k no more than a 20k loan?
As for OP just really consider if it's the right choice getting new and shiny is fun I have made the mistake before getting too nice or expensive vehicle without thinking big picture and after the initial glow wears off I realized I should have gone with something used and more affordable. The amount you would likely save if you looked for a 2012 model or older with low mile and possibly still under manufacturer warranty is astounding not just on the front end but on the interest, sales tax, property tax and insurance premiums.
Good luck with you choice.
Sam
The ratio I have always heard is that your vehicle worth (not cost) should be no more than half your annual income. So, for OP, $20K. Now there are, of course, car afficionados who collect vintage cars. But for the average Joe I think this is a good guideline.
Personally, it is frightening to me to see some of the loan amounts that are in the approval section in the stickies of this forum. But that's just me.
I agree... I have heard that if 20% or more of your income goes to transportation then one would be considered "car poor".
OP, do you mind me asking why you are not "willing" to put more than 2k down on a 40k truck, especially considering your income?