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What income to afford a Plaid?
- Thread starter mrclean90
- Start date
A person’s financial portfolio involves more than just income. Expenses, savings, investments, risk and financial goals need to be accounted for.
That's not straightforward AT ALL.
It's possible to pay cash for a Plaid and have no income whatsoever. A person could also be earning a quarter million a year but have so much debt that buying any car would be a bad financial decision.
It's possible to pay cash for a Plaid and have no income whatsoever. A person could also be earning a quarter million a year but have so much debt that buying any car would be a bad financial decision.
fholbert
Active Member
As pointed out, no it isnt.
I am sure there are plenty of people with not enough income to even claim all of the tax credit due to lack of tax liability, yet enough money to buy one outright. Conversely there are probably people who dont qualify for the tax credit due to upper income limits, yet still not realistically be able to afford that car.
Stating it as a straightforward question either is quite a bit of naivete, or, an attempt to "lets get conversation going, gang!".
Watts_Up
Well-Known Member
Answering to 'Who can afford a Plad' is the kind of question similar to:
"If you have to ask how much it costs, you can't afford it."
"If you have to ask how much it costs, you can't afford it."
I don’t think that statement really applies to cars like the Plaid. $90k is not *that* much compared to other cars these days.
If you can't afford 90k then you can't afford 90k. Manufacturer is irrelevant.
My point is $90k isn’t so expensive where simply asking what the price is means you can’t afford it.
I think I'm just trying to justify the purchase since I've never bought a car at a 90-100k price point.
Very roughly speaking (assuming no crazy expenses other than mortgage) what multiple of that purchase price should your income be? I see financial gurus seem to all have their opinion but does 4x-5x make sense?
Very roughly speaking (assuming no crazy expenses other than mortgage) what multiple of that purchase price should your income be? I see financial gurus seem to all have their opinion but does 4x-5x make sense?
As stated above, there are lots of variables.
But to answer the question and using bank guidelines of about 10-15% of net income for an extended $100K note, about $120-150K might be typical.
time.com
But to answer the question and using bank guidelines of about 10-15% of net income for an extended $100K note, about $120-150K might be typical.
How Much Should My Car Payment Be?
When you’re in the market for a new vehicle, it’s important to set a budget for your monthly payment before determining your price range.
time.com
It really depends on your expense profile etc as everyone is saying. 4x-5x seems a bit too conservative IMO. That would imply a buyer of a 30k car should be earning 120k-150k, which doesn’t seem realistic in this day and age. And generally speaking, the higher your income goes, you can pretty comfortably dedicate a larger portion to discretionary expenses.
Personally speaking, I think $200k would be the lower limit of reasonable for buying a Plaid. I’m a fair bit above that with minimal expenses and still find myself wondering if I really should have done it, not that it’s causing any financial distress.
swaltner
Active Member
TheMoneyGuyShow guidance for a vehicle purchase is “20/3/8”
- 20% down - avoid being immediately upside down on the loan
- 3 year loan term - none of this 96 month loan garbage
- Monthly payment of at most 8% of your gross pay - also less than your monthly retirement savings
- Cash purchase for luxury vehicles, which I believe are currently defined as $50k or more
Iain
Member
Yep, I’m over 400K all in, but I don’t even consider spending that much on a car. My 2020 DM model 3 is amazing. Now, if I was single, no college funds to pay for etc etc. Maybe, but I doubt it. ….plus 400K in San Diego as opposed to most other areas is not a lot surprisingly.
E90alex
Active Member
That math is not mathing.As stated above, there are lots of variables.
But to answer the question and using bank guidelines of about 10-15% of net income for an extended $100K note, about $120-150K might be typical.
How Much Should My Car Payment Be?
When you’re in the market for a new vehicle, it’s important to set a budget for your monthly payment before determining your price range.
$100k loan at let’s say ~7% interest for 60 months is about a $2000 monthly payment.
To keep it at 10% of income, that would mean a net income of $240k, giving a gross of about $360k.
To keep it under 15%, that yields a net of $160k giving a gross of about $225k.
You're all wrong. A new Plaid is perfectly affordable earning minimum wage. You just have to live with Mom for 6 more years. Totally worth it though, right?
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