norapat01

Now I even see some high school kid driving RX to school

Still, their are those who are willing to work, get good grades, live on their own, and have a nice/luxury car

SaintNexus

What are you doing that pays you $1k a month with only 10 hours of work a week? You're not a stripper, are you?

I know where my priorities are, I'm not sure if you read the few posts above, but I do plan on paying off a huge majority of my credit card before leasing a new car, and the payments will be low with a nice lease special. I was able to lease my IS250 for $339 a month, if I can get an IS350 lease for $439 a month (before taxes), then I'll be fine.

With around $300 a month to pay off my debt, that will be $4,200 towards both of my credit cards in 14 months, and I owe about $5,200. So, like I said, by paying off a majority of my debt. I should be financially fine to get a nicer car.

I'll be making $1,200 for now, but should make $1,400 or more in less than a year, so I should be good, I'm nearly 100% on that.

sangomaru

Is your plan to lease, instead of buying? I guess you figure leasing would give you a lower monthly payment and minimum down payment. But then you plan to buy the car after? Going that route will cost you more. I think you would be better off buying a used car.

lobuxracer

iTrader: (2)

Whoever is advising you to keep credit card debt is an idiot. There is no reason in the world to carry a balance on an unsecured line of credit. No one can afford it. Pay that ish off and never, EVER carry a balance again. Don't plan on pay off a huge majority - PAY IT ALL OFF.

$1k a month isn't beans even if you only work 40 hours a month. $25 an hour? Chump change if you want to buy a $30k+ car and afford anything else.

You live at home now. What about 2 or 3 years from now? Still at home? Still figuring on the same debt structure? Do you seriously think $6k a month is a good money? Maybe if you're living at home and are not responsible for anything but entertaining yourself and paying for your car. What if that changes?

Seriously - you need to understand some financial basics. Your 29.9% interest rate is NOT killing you. Mismanaging the credit you were offered is what is killing you, and the plan you propose is equally short sighted.

Buy something you can afford, OUTRIGHT. Car notes do not help you, they only hurt you unless they're 0% interest (then they pack the profit into the selling price instead of the finanacing, but that's a different story.) There is nothing better than OWNING your car. It will never be repo'd. Best of all, since you DON'T have a car payment, you can pretend you do, and stash your car payment in an account which you will use later to buy that new dream car with cash instead of boring a hole in your financial future with a note you can barely afford when things get tight.

You already know you can lose your employment. You need to be prepared for it so when it happens again (and it will, it's one of those things about life) you already own the essentials and won't be scrambling to try and maintain an overleveraged lifestyle.

Vadim540i

No offence but are you serious? Is having a nice Lexus a main point of your life? Making 1 grand and driving 350? Wow, really incredible... You won't even have money to gas up your car. Man seriously think about it, it doesn't make any sense at all. Car is your number one priority, and keep in mind that sometime later in life this mindset will destroy you (not only financially) but you can still change things until it's not too late...

Vadim540i

Btw keeping debt is very irresponsible, you used that money, now pay up. If you can't use credit cards - don't use them. Simple.

ndk83

first off ur honesty is admirable,

secondly, what ur not considering is the costs of up keep that will keep u spending cash on ur car outside of car payments (i have to pay for maintenance for example, tires brke pads etc), and as other people have pointed out there i no reason to buy new, buy used ull get a much better deal. And as for not wanting to change ur car for 10 years, yea right, ull wanna change it in 3 - 5 years. Not saying u will, but the want will b there.

you dont want to live ur life in debt, first get out of it, and once ur out, make smart decision to stay out of it. A new or used Lexus (unless u get a phenomenal deal on one) isnt the best thing for you right now or in2 years. you got time ur still young.

SaintNexus

Yeah, I am thinking of having a 36 month lease, and then finance the rest in 36 more months.

Or should I finance for 60-84 months?

Basic specs I want in my IS350:

IS350 $38,570 RWD
Ultrasonic Blue Mica
Black leather and Alacantra Trim w/ Silver Metallic Finish Accent
Package C $5,444
Rear bumper aplique $76
Paint protection film $429
Cargo net-envelope $64
Carpet cargo mat $73
Total: $45,531

Finance Calculator shows:
Lease: $2,500 DP, 36 month term for $715 a month
Finance: $2,500 DP, 60 month term, 10.7 APR for $984
or $2,500 DP, 84 month term, 11.4 APR for $790

^But the calculator doesn't let you adjust price, and I'm sure there will be a special somewhere down the road. And if I get my Credit Score above 720 (Tier 1), I'm sure that if I finance for 60 months, I'll have a better APR than 10.7, thats for sure.

But just by the looks of it, I'm just kidding myself with wanting a new IS350. I could get a CPO, but I want it new. I want to be the one popping the IS's cherry and keeping it.

I guess I just have to wait longer, and either put a bigger DP, or get my career going before I buy a new car.

cmky3

For the record, $5200 at 29.9% interest means you're paying 2.5%/month or $130 initially just paying interest on past bad decisions. At $300/month you will pay them off in 23 months but you'll pay $6900 total and $1700 in interest.

If you could pay $500/month, you'd pay it off in 12 months and only have to pay $6k total/ $800 in interest. You really can't pay off 29.9% debt fast enough.

sangomaru

Yes, you need to wait until you can actually afford to buy a car like this. You already stated what happened the first time you lease this car, it got repo'd. You would at least need to comfortably put a down payment of about $15-20K in order to get the kind of payments you want.

Don't forget to add car insurance, maintenance, and gas (yes, it will cost you $50-$60 per fill up - premium).

Be smart and pay off all your credit card debt first. Then save your money until you can afford to buy.

SaintNexus

To start off, Lobuxracer, Vadim540i (bmw owner?), and ndk83, how old are you guys?

As for the debt. I made like 2-3 late payments a year ago, because I accidently signed up for online statements, and didn't receive anything in the mail, and I pay my bills by mail (I'm old fashioned). Because of my late payment(s), I'm facing the consequence of 29.99% APR. But in the contract, it says that if I make my payments on time for 6 consecutive months, they will lower my interest rate. I've made my payments on time for 10 months now, I've called them almost half a dozen times to lower my APR, and they wouldn't do it. They said they can't, something about the Prime rate or some other factor. Basically, I have to wait until February for them to review my stuff, and to see if they will lower my APR or not. So, I gotta deal with 29.99% for 4 more months, and then hope for the best. Hopefully they do lower it, I hate these high interest rates.

As for paying off my debt faster, I think I'm gonna change my blueprint formula. One of my cards I owe $1,375.43($1,500 lmt), and I can pay it off in: 9mon/$162.40, 12mon/$126.66, 14mon/$111.47, or 21mon/$81.62. My other card I owe $3,379.75($3,500 lmt), and I can pay it off in: 9mon/$417.03, 12mon/$325.26, 14mon/$286.25, or 21mon/$209.58.

So this means, I can pay it all off in 9 months w/$579.43, 12 months w/$451.92, 14 months w/$397.72, or 21months w/$291.20.

I'm currently on the 21 months plan. As for my job, I make anywhere between $1,155.20-$1,328.48, after taxes. So, if I stick to the 21 month plan, I'd be left with $864-$1,037.28, and if I save $400 every month, I should be able to live off the rest of the cash per month, and by Next Christmas, I should have saved $5,600.

I also have this CareCredit (I had braces). The limit is $4,000, and I owe $1,500ish. I plan on getting veneers and a bridge this christmas (trust me, I need it), which is going to cost more money.

Having a girlfriend costs money, Christmas is 2 months away, so I gotta get gifts. Ugh.

As for cars, I want to stick to the Toyota family (Lexus/Toyota/Scion), and I wanted the Scion XB, but I just checked, and its fwd, but I prefer rwd.

I could get a used Lexus, but it wont be cpo. But I'd want a new car, but you know what, you guys are right. I shouldn't live my life with making money for a new car, a used car is just as good, just as long as I find the right car with the right payments, you know?

I know I wrote a lot, but what you do guys recommend? All this information is really helpful by the way, and I really appreciate all your help!

SaintNexus

I know I'm nowhere near buying a car, but I'm just curious, whats the best price for me to get this car:

http://www.cars.com/go/search/detail...e&aff=national

^They're asking for $23,994. Will it be possible for them to shave off $3k off of it?

If they give it for $20,994, with $5,000 down payment, 9.75% tax, and 6.25% APR for 60 months, would be $351 a month, thats including tax. This is something that I'm able to do, easily. I just have to save up money for something like this. Next christmas should be good.

MBTC

Good advice but I would take it a step further and say that a car is not an investment at all unless you're buying a vintage collectors item that is likely to go UP in value over time. A car is an overhead expense. Most of us HAVE to drive a car (depending on where we live and what we do), so driving a car is a necessary cost. Anything over the "base cost" of driving a working, reliable car (whether that means driving an older car and putting money in repair/maintenance or driving a newer car) is really money thrown away on a luxury. Anyone paying for a luxury that does not have plenty of disposable income is nuts.

When I was in my early 20's, I was a software developer and making a very good living for that time and I've always had great credit, but still I chose to drive cars like Hondas... something reliable but not flashy. In my 40's now and this is the first "luxury" car I ever bought new... and the only reason I did is because I could get it for low 30k range instead of 40k+.

Getting back to your first question above. I attribute my habits to knowledge of personal finance and economics education more than math (although I do that too .. Also the self-discipline to balance out ego and superficial wants. These skills are getting more and more critical to survival these days, the way the world is going to hell in a handbasket

dayrinni

Here is my 2 cents:

1. Pay off your credit cards ASAP - start with the one that has the highest interest rate. With your highest interest rate(s) you are saving lots of money by paying them off NOW. Think of it as a way to "save money". If you pay them off 6 months earlier then think of all of the interest money you just saved. Woot! It's like an automatic savings plan.

Yes - doing this will be hard and you will have to give up some "nice" things you buy with your spare money. But in the long run, it is a very good thing to do. Why? You live with your parents right now so you have that automatic buffer in case something "really bad" happens. Most kids do not know what it is like to live on their own and they take things for granted. By doing the above, you get a taste of real life without actually being there. You can mentally adjust and practice in how to do it right so when you DO get there, you'll be able to do it well and know what to do. Thusly, you'll be able to avoid trouble.

2. Someone mentioned this, but $6,000/month is not a lot of money. It SEEMS like a lot. I actually make $6,000 per month. The money goes out so fast I barely see it. Do you know how much tax (I live in NY) you pay on $6,000 a month? About $2,000. TWO THOUSAND DOLLARS! A third of your paycheck - gone.

I put 5% away in my 401k, my company matches 5% and includes an extra 1% (so we are at 11%) per paycheck. So I am doing fairly well with saving - about $660 per month. In a perfect world, one would put the max in per year (around $14,000) but I cannot afford that right now. Anyways...why am I telling you this? Because I want you to know what you will be doing in the future. The money you put in the 401k, even though it is before tax, will still cut down your monthly after tax paycheck. For me, it comes out to $400 less per month.

AFAIK, car insurance companies are running people's credit for rates these days. So if you try and get a new car and then car insurance, who knows what it'll be. Also, I doubt you will be able to get the Lexus fiance deals if you decide to buy because your car got repo'ed. But, I do not know how much repo affects people's credit scores.

My point is - try to fix your current financial situation. You made some mistakes - everyone does, don't feel bad. But what matters is that you do the right things to get out of it. I want you (and everyone else!) to drive a Lexus. They are great cars. Think of it as a goal. "If I can get out of this hole, and right the wrongs, then I can treat myself to my dream car in 2-5 years!". Then you can own it without any worries of being able to pay the bills and having it not repoed! Score! Won't that feel good?

3. I put down a large downpayment on my car to ensure I got a low monthly payment. I saved up 2 years to do it, but I didn't have much credit card debt (about $2,000).



Use this situation to strive and improve your financial situation and your mindset. You'll thank yourself in the long run. Your wife/kids will too, when you reach that point. You'll be responsible and will have the experience to lead them into the future safely.

moses0324

i dont usually post but this is for the OP's...

do not buy a lexus...you couldnt afford it then and you certainly cant afford it now...

the fact that you defaulted on a $350 monthly payment is scary...my monthly payments are $600...if you cant afford the car dont buy it....its that simple

look at the current state of our economy...everyone did what you are trying to do which is live beyond your means...as a result society has to bail you out...

all for a silly car...get your finances in order