How much to spend on a nice first car?

[Clayton]

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.

[steel108]

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

[lippy]

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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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[SurferEd]

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.

[gimmetheloot]

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

[NoahSD]

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


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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.

[riverdance]

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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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[React1oN]

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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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[yellowdoyle]

Clayton,

This depends on your situation.

If you are buying a new car, and its not in super high demand, go to www.carsdirect.com and see the price they offer there. They will also provide the invoice price that the dealer pays for most cars.

So lets say the car you want is invoiced at 20k, with MSRP of 24.5k. Just determine what the car is worth to you, and stick with that. You are paying cash right? It really is that simple. The guys at the dealership will accept the fact that you did a bit of research and seem to be willing to pay "x" amount. Depending on the car, as little as $500 over invoice can be enough to get a deal done. For others in high demand, you may be forced to pay MSRP.

If you are buying used, go check out the car, don't buy right away, use kbb.com, and maybe have a mechanic check out the car before you buy. The last car I purchased was used, I did all the above, the previous owner met me at the Honda dealership where I paid $80 for an inspection lookover thing, and then I bought the car the next week based on its condition, the results of the dealership lookover, and its value to me.

Don't try and get the best deal necessarily. I mean, say someone offered me a BMW 7 series for $2000 down and 800/month for 60 months, that would be an insane deal, but not right for me, since it is out of my price range.

If you have some specific cars you are looking at, post them here for more ideas.

[PokerBob]

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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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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.