How much to spend on a nice first car?
 

Background: Recently I had a large tournament score and made 120k before taxes which I am about to wire out.

I want to allocate this money towards a new car and have a financial advisor put the rest into a savings/mutual fund thing. I am not very knowledgeable on the subject of finance, but my dad has friends that do so thankfully they are helping me.

Before I ask them, I figured I would ask you guys in regards to my situation and what would be most beneficial:

- I'm almost 21 and I currently have a lease prepaid for on my current apt for the next 11 months. I am living with college friends, however I am on break from college. There is a 50/50 chance I will either move to another part of the country after that 11 months or stay another 12 months in current town and then move when everyone graduates. The plan is to go back to taking classes in either journalism or business when I move to the west coast.

- I anticipate the living costs of the next place I move to to be significantly more expensive than current living arrangements (compare college town in Georgia to anywhere on the west coast).

- Given these facts, it would be wise to allocate a fair amount towards that and not necessarily ball out on a car. However, there is the thing about "I only live once", and for the last 5 or 6 years I have been driving a crappy 1994 Nissan truck. Part of me wants to splurge, however part of me wants to be responsible for my financial situation in the upcoming years.

Another important factor is that I am not incredibly successful at poker and do not figure to make enough in the next 12 calendar months to make the current issue a "non problem". If I made 100k before taxes next calendar year, I would be thrilled. But I'm working on that now that I have a new small bankroll of 5k set aside to grind into something meaningful.

So, given this information, if you guys were in my spot, how expensive a car would you guys go for? I have a good idea in mind as to what to do, but I know this forum contains numerous older and wiser posters than I who could have valuable things to add.

Thanks in advance.

Re: How much to spend on a nice first car?
 

Only useful advice I can give you is buy used. Do not buy a brand new car.

Re: How much to spend on a nice first car?
 

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Only useful advice I can give you is buy used. Do not buy a brand new car.

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Re: How much to spend on a nice first car?
 

You do only live once. For exactly this reason, you should invest as much money as possible into various investments.

Nice cars are great, but there are a lot of things in life that are nicer, if you can wait. At 21, you have so much time for the investments to compound and then you'll really be able to reap the benefits later.

Re: How much to spend on a nice first car?
 

Clay, I dont know [censored] about cars or anything else, but if u make sub 100k next year id be very surprised.

especially not working or taking classes for the first half?

id prob be looking to spend 40k or so if i was you, but not anything more.

and id buy a beamer too, just cuz they are ill

Re: How much to spend on a nice first car?
 

Get an '03 or '04, moderate mileage, bottom-level luxury car. $15-$20k, nice, won't ruin your budget.

Re: How much to spend on a nice first car?
 

[ QUOTE ]
[ QUOTE ]
Only useful advice I can give you is buy used. Do not buy a brand new car.

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Re: How much to spend on a nice first car?
 

120 less say 30 for taxes= 90. then 30 for next years expenses. leaves 60 for your net worth plus what you had before. how much of that is going for a car. you made a nice score. bank it and let it grow. or spend it and later find a way to earn more.
i cant see ever spending 20% or more of what you got on a car or anything that depreciates.

Re: How much to spend on a nice first car?
 

[ QUOTE ]
Get an '03 or '04, moderate mileage, bottom-level luxury car. $15-$20k, nice, won't ruin your budget.

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That's what I did- Saab 9-3 ftw!!

Re: How much to spend on a nice first car?
 

buy a house (for 90-120k in cash)
rent it out for 600+ a month

use the 600/ month for the payments on a nice car

build equity
?????

profit.

Re: How much to spend on a nice first car?
 

[ QUOTE ]
Only useful advice I can give you is buy used. Do not buy a brand new car.

[/ QUOTE ]

buying a new car isn't all bad, although i agree buying a 2-3 year old car with 25-35k miles is the thing to do.

Re: How much to spend on a nice first car?
 

i think you'd be better off spending less, than more. some hot saab 9-3, or bmw, or something, while nice, won't give you the value you need here.


in australia, you can get a shitbox for under $1k, something drivable for $3k, and then something decent for $15k or so (all $A).

i think that once you pass the $A15k mark, your returns will diminish - at around that point, you can start to get something nice, reliable, solid, with all the standard modern conveniences with around 50k miles (80k km). you're not going to get an awesome sports car, but you will get something that is reasonable.


obviously, the US car market is different, but that's my impression of cars, and it is what I've done.

Re: How much to spend on a nice first car?
 

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However, there is the thing about "I only live once"

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And this attitude is the reason most young people get into financial trouble. Invest the money and bust your ass in the coming years. Before you know it, you will have plenty of cash to buy that flashy car without jeopardizing your future. Or you might realize that a flashy car isn't all its cracked up to be.

Re: How much to spend on a nice first car?
 

I wouldn't recommend spending over 25K on the car. 15K-20K is probably a better idea. Things like insurance and maintenance add up pretty fast, cars have a lot of expenses outside of just the purchase price.

Re: How much to spend on a nice first car?
 

[ QUOTE ]
Clay, I dont know [censored] about cars or anything else, but if u make sub 100k next year id be very surprised.


[/ QUOTE ]

My first thought too. No reason you shouldn't make 200ish/hour and no reason you can't put in 500 hours when most people work like 3-4x that much in a year.

Re: How much to spend on a nice first car?
 

I'd get something around the Acura TL zone if you choose to get one. Less is pretty meh and more is inappropriate/not many additional features/luxuries.

Re: How much to spend on a nice first car?
 

Are you filing as a pro? If so, then you have a higher chance of "balling" out on your car since you can claim it as a business expense. Don't get too excited though, since you can only claim part of the total cost of the car as depreciation each year, not the whole amount right away.

One thing I don't understand is why you only set out 5k as your new bankroll when you can set out 20k for a better chance of higher return. There shouldn't be that much of a skill difference b/w 1/2NL and 2/4NL right?

Re: How much to spend on a nice first car?
 

How can he claim a car as a business expense?
The IRS only lets you do that if you use the car for business, not just if you use it to commute to a casino.


Put me in the "Buy something reasonably nice, invest the rest" camp. When you get my age, you'll wish you'd had all that compound interest working for you.

Re: How much to spend on a nice first car?
 

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How can he claim a car as a business expense?
The IRS only lets you do that if you use the car for business, not just if you use it to commute to a casino.

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The casino is where you do your business. You need to get there somehow. Any moneys you pay so you can get there to conduct your business is considered as expense, which is another reason why one should keep records of one's mileage [for gas].

You will not obviously claim 100% of the car's payment. However, you can claim a percentage of the car. The simplest way to claim more percentage of the car as a business expense is to drive from a place far to Vegas, like Texas. If the round trip takes 2,000 miles and you only drive 4,000 miles on the year, you can claim up to 50% of the car's payment. Since Clayton is going to be in a college area/town, it is doubtful he can rack up a lot of miles, thus indirectly increase his business's percentage use of the car.

Re: How much to spend on a nice first car?
 

[ QUOTE ]
[ QUOTE ]
However, there is the thing about "I only live once"

[/ QUOTE ]
And this attitude is the reason most young people get into financial trouble. Invest the money and bust your ass in the coming years. Before you know it, you will have plenty of cash to buy that flashy car without jeopardizing your future. Or you might realize that a flashy car isn't all its cracked up to be.

[/ QUOTE ]

^Pretty much exactly what he said.

Re: How much to spend on a nice first car?
 

Unless you buy an amazing car or a complete pos you will habituate to it within a few weeks and your level of satisfaction will be roughly the same after that.

If you buy an amazing car then you will probably get annoyed with it because it can't ever live up to expectations and end up less happy than if you plumped for something more middle-of-the-road! Sounds stupid, but it's borne out by a lot of scientific research, as well as my on experience of splurging on stuff.

So I would go for an inexpensive decent car. I would choose a classic car, they're cheap but classy.

For me the expense involved in buying and owning a car doesn't seem worth it, and I'd be pretty upset at earning $100k in a year. YMMV.

Re: How much to spend on a nice first car?
 

I wouldn't spend more than 5 or 10k on a car. Seems pretty ridiculous to spend 20k+, at this age, on a car, if you aren't really sure where you are even going to live or how much you are going to make in the next year.

Also, having a nice car in a college town is generally a bad idea. I dinged up my [censored] car plenty of times in college.

tc

Re: How much to spend on a nice first car?
 

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I wouldn't recommend spending over 25K on the car. 15K-20K is probably a better idea. Things like insurance and maintenance add up pretty fast, cars have a lot of expenses outside of just the purchase price.

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the more expensive the car, the more expensive the maintenance as well. keep this in mind.

personally i'd get a reliable used car for now, and see where i'm going to end up. if you end up in san fransisco, then you might not even need a car.

Re: How much to spend on a nice first car?
 

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Background: Recently I had a large tournament score and made 120k before taxes which I am about to wire out.


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Just enough money to buy a new brand Mizartati. Coincidence? I think not.

Disclaimer: This post is not from an older or wiser poster.

P.S If you drive your Mizartai around campus and have a little bit of game I promise you will get laid A LOT!!!!!

Re: How much to spend on a nice first car?
 

Put that 90k in an account getting 5%, thats 4500/yr, or 375 a month. Oddly enough, 375 is exactly what my car payment is (04 escalade, 29k miles when bought, with 2k down). The [censored] part is insurance, at 21, its going to be pretty expensive, Im 25, 1 accident 3 years ago and mine is 1800/YR, but I also have a couple other cars on there. After 5 years you still have your 90k and your car paid off. I dont know what your financial situation is, but if you are planning on around 100k for next year, its not like buying a car is going to send you to the poorhouse...I dont understand that thinking from a lot of posters..wtf? if you enjoy a nice car, buy it.

PS- if you arent buying brand new, your interest rate is going to measurably larger, that is a trade off you should factor in. I went through penfed.org, and got 5.9% which is better than youll get on a used car from any dealer.

and good2cu, wtf is a mizartati/mizartai? do you mean maserati?

Re: How much to spend on a nice first car?
 

you people are [censored] nits!!!!

thats why if you ask this question in El D forum, you also have to ask it in BBV4Life. the correct answer will be somewhere in between.

I'm buying a car soon, not going nuts, but at 22 I'd like something nice rather than just a car that gets me from A to B. I'm going to be spending about 25k

Re: How much to spend on a nice first car?
 

seriously i can't believe the nitty advice in this thread

if clayton needs money he can always sell the car - a pain to be sure, but if he wants a nice car, he should get one.

i do wonder why he only has $5k online for poker - wtf? 2/4 is ez game.

Re: How much to spend on a nice first car?
 

I feel like this is a question that really Clayton can answer best himself.

There's some niceness/ballerness/price level that you want. Figure out what that is. Depending on what "nice" is to you, that can be 20k or it can be 50k.

Re: How much to spend on a nice first car?
 

SH: Claiming mileage as a business expense is fine. Claiming car payments is like begging to get audited.

Clayton: If I were you, I'd probably commit the bulk of your "car money" to poker bankroll and give myself a shot at having a lot more money in a year, at which point you'll be in a much more comfortable position to buy a relatively nice car.

Re: How much to spend on a nice first car?
 

This is your real play. Vegas, one hand of BJ for 10k (gotta split/double LDO). Win, buy a 30k car, lose buy a 10k car.

Lose a double, you're walkin. Lose a split, double, double, you're jumping off Stratosphere.

Re: How much to spend on a nice first car?
 

Take the motorcycle safety class for $200, then buy this for $8k:

http://i63.photobucket.com/albums/h1...1/DSCN1864.jpg

LDO

Re: How much to spend on a nice first car?
 

[ QUOTE ]
Put that 90k in an account getting 5%, thats 4500/yr, or 375 a month. Oddly enough, 375 is exactly what my car payment is (04 escalade, 29k miles when bought, with 2k down). The [censored] part is insurance, at 21, its going to be pretty expensive, Im 25, 1 accident 3 years ago and mine is 1800/YR, but I also have a couple other cars on there. After 5 years you still have your 90k and your car paid off. I dont know what your financial situation is, but if you are planning on around 100k for next year, its not like buying a car is going to send you to the poorhouse...I dont understand that thinking from a lot of posters..wtf? if you enjoy a nice car, buy it.

PS- if you arent buying brand new, your interest rate is going to measurably larger, that is a trade off you should factor in. I went through penfed.org, and got 5.9% which is better than youll get on a used car from any dealer.

and good2cu, wtf is a mizartati/mizartai? do you mean maserati?

[/ QUOTE ]

yea maserati. I dunno wtf happened. I googled my [censored] up spelling then I thought I copy/pasted over the correct spelling. I guess im just retarded.

Re: How much to spend on a nice first car?
 

i thought the mizertati spelling was hilarious

Re: How much to spend on a nice first car?
 

I never claimed to be anything other than a nit.
In fact, I'm likely the nittiest on BR nits in EDF.



guids: Why would he want to finance when he has cash?

Re: How much to spend on a nice first car?
 

I think the key is to learn to not want the car.

I'd listen to the poster who said that if you get a better car your standards will readjust after a few weeks and your level of satisfaction will basically be the same.

Just decide what your reasons are for getting the car. If you are a driving enthusiast and like nice cars then this is the best argument for splurging. If you want to up your social status is probably the worst reason. Then there is everything in between.

I drive a pretty crappy car but it's comfortable, reliable, and has a nice stereo so it satisfies my needs. I went through a period a couple months ago where i was really set on getting a good car, but somehow i got over that phase.

Once I discovered that the majority of people driving around in the new audis and bmws don't actually own the car outright and are stretching themselves thinly to look wealthy it made me not to want to be a part of that game.

Re: How much to spend on a nice first car?
 

[ QUOTE ]
you people are [censored] nits!!!!

thats why if you ask this question in El D forum, you also have to ask it in BBV4Life. the correct answer will be somewhere in between.

I'm buying a car soon, not going nuts, but at 22 I'd like something nice rather than just a car that gets me from A to B. I'm going to be spending about 25k

[/ QUOTE ]

can't argue with this amount of life experience

Re: How much to spend on a nice first car?
 

[ QUOTE ]
I never claimed to be anything other than a nit.
In fact, I'm likely the nittiest on BR nits in EDF.



guids: Why would he want to finance when he has cash?

[/ QUOTE ]

He says he has 90k, say he buys a car for 20k out of the 90k in cash, he is left with 70k to earn some interest. Suppose 5% interest in a "safe account", after 5 years he has about 89,339. If he puts 90k into an account, he is earning 4,500 /yr in interest, which is 375/year for car payments, at the end he is left with 90k, plus at a young age, making paymentws month in and month out is great for his credit. Im assuming he is incorporated/llc, so you can mess around with your taxes to even everything out so you arent losing much that way either.

Re: How much to spend on a nice first car?
 

[ QUOTE ]
[ QUOTE ]
I never claimed to be anything other than a nit.
In fact, I'm likely the nittiest on BR nits in EDF.



guids: Why would he want to finance when he has cash?

[/ QUOTE ]

He says he has 90k, say he buys a car for 20k out of the 90k in cash, he is left with 70k to earn some interest. Suppose 5% interest in a "safe account", after 5 years he has about 89,339. If he puts 90k into an account, he is earning 4,500 /yr in interest, which is 375/year for car payments, at the end he is left with 90k, plus at a young age, making paymentws month in and month out is great for his credit. Im assuming he is incorporated/llc, so you can mess around with your taxes to even everything out so you arent losing much that way either.

[/ QUOTE ]

I'm not going to go through all the math, but there's no way that borrowing money at 5.9% and investing it at 5% is going to result in him having more money.

Re: How much to spend on a nice first car?
 

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I'm not going to go through all the math, but there's no way that borrowing money at 5.9% and investing it at 5% is going to result in him having more money.

[/ QUOTE ]

i'm no accountant or anything, but aren't you borrowing 20k at 5.9 and investing 90k at 5%?

Re: How much to spend on a nice first car?
 

[ QUOTE ]
[ QUOTE ]
I'm not going to go through all the math, but there's no way that borrowing money at 5.9% and investing it at 5% is going to result in him having more money.

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i'm no accountant or anything, but aren't you borrowing 20k at 5.9 and investing 90k at 5%?

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yeah but the other way you are still investing 70k at 5%. bob is right, what guids is talking about is impossible.