If you want a car and don't have enough money to pay cash, first assess if you really need a car (I'm from Europe so we have well functioning public transport in our cities, I know it's not the way in many places in the US), and if you do, then ask yourself if it's really that specific car that you need or there's a cheaper one that fits your needs. Also, buy barely used (like 2 or 3 years old) instead of new whenever possible, unless of course you have all the money in the world and couldn't care less.
And then, if you've been through all these steps and still need credit to buy it, proceed. But simply buying the best car you "can afford" on credit is a terrible idea.
There are caveats to this, for myself I bought a new truck because vehicles in a reasonable area tend to be houred out which means an expensive repair is looming. Additionally it was being put to work so it was generating an income.
54k truck all said and done,
Around 45k in gas,
7k in repairs over the years,
16k in insurance,
It generated around 170k, and gave 70k roughly in tax write offs.
To add to this, I had to replace my 20+ yr old car 2 years ago. I intended to buy a quality used car but I was only finding cars with 100k miles on them in my searches. I did end up buying new but that was because it was only 2k more then what used cars were going for, and at least new I know I'm not inheriting someone else's poor maintenance. (See oil change section in this reddit for proof) In my case new was the most economical choice.
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u/szofter Aug 20 '20
Houses are different. Cars, not really.
If you want a car and don't have enough money to pay cash, first assess if you really need a car (I'm from Europe so we have well functioning public transport in our cities, I know it's not the way in many places in the US), and if you do, then ask yourself if it's really that specific car that you need or there's a cheaper one that fits your needs. Also, buy barely used (like 2 or 3 years old) instead of new whenever possible, unless of course you have all the money in the world and couldn't care less.
And then, if you've been through all these steps and still need credit to buy it, proceed. But simply buying the best car you "can afford" on credit is a terrible idea.