Would you take out an 8 year car loan for a car you cannot afford?

[LarsenGrind]

Cars are stupid expensive here in Denmark (we have 150% car taxes), so my '17 GT PP was 110k USD.
I'm a carpenter and have around 30k yearly in my pocket after taxes. Taxes are also super high compared to the US. But then alot of stuff like hospitals, education ect. is free.
Always wanted a V8 Mustang. Its my dreamcar, since a kid.
When the s550 started selling here in denmark, and I came out of a 10 year relationship I knew that my Mustang dream was now.
I worked my ass off for two years. Was all I did. Lots of 80-100 hours a week. No chasing girls, or really going out. Just working towards my dream. Come late summer '16 I ordered a GT to my spec, put down 7.3k USD as a 'ordering fee', and knew I had to wait 6-8 months, before it would be here. It was fine cuz then I could get when the weather cleared up in the spring. So after 7 months it was finally here.
Bought the car 100% from hard earned money. No mommy or daddy. No bank. No lease. No nothing. Just me fulfilling a dream. To own my very own american V8. And brand new at that.
Not long after I got the car, my friend for 14 years became my girlfriend. She got pregnant pretty quick. Gave me a beautiful babygirl. When she was 1,5 day old, she got her first ride in the GT, when we drove home from the hospital. She has never complained about it being a 'loud' (AWE touring cat-back) car, since she heard it from inside mommys stomach for 9 months. Now she always turns her head when a loud car or bike rolls up the street. She gonna grow up knowing what a real american car should sound like.

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[BluePonyGT]

Sorry guys. Seems obvious, but in the heat of passion where "I want that" overrides the human brain center that commands logic...

 

[ugstang17]

affordability is of course a bit subjective. General rule of thumb is...is the car payment 10% or less than your gross income? If so, then its "affordable". This is why 6, 7 and even 8 year car loans are becoming more common. People are buying cars they cannot afford in any other way, other than to push out the loan term to a crazy long time, while paying thousands more over the life of the loan (notice I didn't say life of the car) than they otherwise would.

More than 60 months is crazy IMHO. And 10% as a "rule of thumb" for 1 car is equally as crazy.If that's the standard, it explains why CC debt is out of control and no one has a savings account or 401K building.

My insurance/registration/car payments on two cars (17GT premium loaded and 14 Fusion SE loaded) combined is less than 10% of my middle income annual gross. I refuse to waste money buying new. Used cars are like left overs. They are cheaper and they are just as good the second time around.

 

[Hack]

I personally think car loans aren't terrible. You can get a fairly good rate. The main things I'm concerned with are if I can afford the payments and if I will always have enough equity to get out of the loan and buy something practical if I lose my job, get hurt or something else happens to my income and that becomes necessary. I've never been fired from a job, but to me it's an unacceptable risk to ever be under water on a car loan. I don't mind having a long loan term as long as the total paid is acceptable. In fact, I'd rather have a longer loan term to give myself more leeway in case something happens. Typically I will take a longer loan than I think I need and pay it off ahead of schedule.

Saving money, earning the highest possible interest rate, etc. etc. isn't that important to me. Yes of course I'm saving for retirement and I won't compromise that for a car or anything else. However, I disagree with the contention that you have to pay cash for a car or that long loan terms are necessarily bad. The entire reason I would buy a car is to get more enjoyment than the extra money in my pocket would give me.

You can't take those dollars with you. If having the most money possible was my goal, I'd be driving something old and junky like my 2003 Explorer I used to own. But I don't because enjoying my car is much more important to me than having/saving the most possible money.

I think this is true of most people that own cars that are less than 5 years old. Too much posturing in this thread in my opinion.

 

[Bikeman315]

Sorry guys. Seems obvious, but in the heat of passion where "I want that" overrides the human brain center that commands logic...

Agreed. It the old need vs. want. I do not think anyone need a Mustang. But most everyone wants one.

As i always say, "et vivere, reservate"

 

[oneheadlite]

Well,
I think I'll go look at a new Harley.....................

(pay cash of course)

 

[Bikeman315]

Well,
I think I'll go look at a new Harley.....................

(pay cash of course)

I hope so!

 

[Balr14]

Hell, I wish I was comfortable with having a loan. But, I'm 76. At my age, we don't even buy green bananas!

 

[Bikeman315]

Hell, I wish I was comfortable with having a loan. But, I'm 76. At my age, we don't even buy green bananas!

Priceless. Best Post of the Day!!!!!!!!!!!!

 

[Faceme]

5 year loan with half down here. Took the loan out because interest was low and to improve my credit score.

But no, if i couldnt afford it, i would get something reasonable. I am a car person, but afterall, its just a damn car.

 

[BmacIL]

More than 60 months is crazy IMHO. And 10% as a "rule of thumb" for 1 car is equally as crazy.If that's the standard, it explains why CC debt is out of control and no one has a savings account or 401K building.

My insurance/registration/car payments on two cars (17GT premium loaded and 14 Fusion SE loaded) combined is less than 10% of my middle income annual gross. I refuse to waste money buying new. Used cars are like left overs. They are cheaper and they are just as good the second time around.

Yeah. For the next 4 months, the mustang payment will be ~4.5% of gross. After that...0%! The max it's been throughout ownership is 6%.

The same philosophy should go with housing. The guidelines are 20-30% of gross income...that just seemed too much. Ours is ~20% of net, not gross. It makes a big difference.

 

[3star2nr]

60k on a clutch? Was the old one slipping, or did you just replace to a performance clutch? Sounds like the same thing with the shifter. A mod, and not a broken part.

Yes the clutch is slipping occassionally at high RPMS. Most people do not get more than 60k out of the factory clutch on these cars. Truthfully I coupd probably get another 12k out of it but the idea of being broke down on the side of the highway is unappealing.

Shifter is indeed a "mod" but it's a preventative mod to protect your shift forks.

So its keep the car stock and moneyshift then replace the trans or do preemptive maintenance and replace the shifter...since im dropping the trans anyway might as well.

 

[Bull Run]

a car loan past 10% of gross income is no longer considered affordable whether its a lease or not..

Just curious as why did you decide on the 10%? I've seen other figures like 20% of net pay, or if you're in the Dave Ramsey camp, total value of cars should less at less than half of annual income and no new cars until the net worth hits $1 million.

Im sure if you go to the Facebook pages you'll get a lot of the folks in the first column as it tends to have a greater population of younger members and therefore people with less earning potential.
I've also noticed the amount of threads involving "The Poors" and the comments associated with the aforementioned statement leads me to believe that there are a lot of folks that have made potentially poor financial decisions with their car(s).

I see a similar pattern as you since many on Facebook car groups somehow think that "net worth = type of car you drive". But you also noticed "The Poors" threads on this forum, which also implies that there are a good number of financially illiterate people on this forum. Now, I'm not saying that merely getting a loan for a car makes you financially illiterate, but rather "net worth = type of car you drive" do.

I always find these discussions happening on a Mustang forum amusing. Everyone's financial situation is different. Why do people feel the need to impose their priority's on other people? Like you said, affordability is subjective. How can you say spending more then 10% of your income is unaffordable with out knowing anything else about the person expenses? I also view my Mustang as more then simply a car to get from point a to b. So can I add in my entertainment budget? Up to 20%

I personally don't care if people stretch themselves to get a car of their dreams, but I do have an issue when they try to make it sound like it was a good financial decision. Those are the same type of people who'll call others "The Poors" whenever there's a discussion about value of certain trim levels. An how can we forget the old threads about people trying to justify ADM for GT350s because those were going to be collectors cars and their value will just go up? Same type of discussions popped up when GT500 was announced. Nothing wrong with someone paying ADM for a car if they can't wait, but don't try to rationalize it as a some sort of investment.

I really wanted a GT500 this year. But after I did the math. Even with me putting 30 grand down that I had. From selling my race car. I was still looking at a $650 a month car payment for 6 years. As much as I love cars. I have a hard time putting down that kind of money on an object.

Funny thing is that you're probably one of a few on this forum that can truly "afford" a GT500 given your income and lack of debt. And I'm pretty sure you were labeled as one of "The Poors" at least once on this forum. I'll go as far as to guess that you're already a millionaire or soon to be one.

 

[3star2nr]

Why I still wonder how people afford to whipple the world for example or all this fancy suspensions and tires that I only dream about :( heck even students here afford car mods that I can't :(

Tax refunds. Affirm financing.

Also with students alot of them use their student loans to pay for mods. I knew guys in college that did that.

Or they live with their parents so any money they make they spend in mods. Plus these cars arent terribly expensive and there is a massive used parts community.

You can build a 800whp GT for around 6k

 

[Bull Run]

Affirm financing.

I actually seen discussions on Facebook where people were justifying financing their car mods via Affirm because other get mortgages to buy houses. I guess some people can justify anything if they can rationalize it hard enough.

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