mschuyler

One thing not mentioned so far is your career. How stable is your job, really? What if you got laid off? How long could you last? The fact is, you have significant debt right now. Technically, you are underwater right now because you owe more than you have. Of course, we don't know how much equity you have in the house. People tend to say that a mortgage is "no big deal" or "par for the course," but it is still a debt and that alone could trip you up. What if we had another recession and your house dropped in worth to less than you paid for it? These things happen.

One way or another, you're going to need to pay for a $70-80K vette. That's a significant increase to your debt load. A financial planner could help you set a goal for where you want your net worth to be in a few years and show you how to get there. Right now it doesn't look too good. Yes, you can cover your debts, but the thing is, you have debts. Anything could wreck that plan, including your own disability. See an advisor. If you can squeeze a vette in there, by all means do so.

detroitguy

I appreciate the thoughtful reply.

My job is very, very stable. I'm sure everyone says that, but I'm confident. I've also received a few job offers recently, so I'm not worried about being unemployed. I have a great family that would assist me if needed, but I don't think it'll ever come to that.

I have positive equity in my house. I got a great deal and the market in my city has climbed. I could sell now and pocket about $50,000.

HoustonMidtown

How much "extra" do you have left over each month after all your regular expenses and "unexpected" (an expensive date, new suite for work, stuff like that) expenses? If you regularly have enough left over to cover the difference between your current ATS and a Vette - go for it....

jim2527

My general rule is that total household car expenses should never exceed 1 weeks take home pay.

Total expenses include gas, insurance, maintenance and monthly payment.

Woodson

Proudpatriot

The interest rate on your student loan, no matter how low it is, is higher than the rate you are earning on your savings.

If it was me, I would not buy an expensive new car right now. You are young and you can lose your job at any time. If I was you I would save some more money, pay off your student loans, then save some more money.

I know it seems like you are going to have to wait a long time for your dream car but you are young and your time will come.

Rebel Yell

One thing I will add, "Don't forget the cost of insurance on a 70K - 80K Corvette." Call your agent, and ask as it is a part of the debt you will incur. Good luck, I couldn't even think of owning a Corvette at 23.

AdamV

This thread can go for many many pages. Do what you want to do. As long as you are comfortable making your payment and living as you like, then go for it. At the end of the day, you will be responsible for your bills. Not the guys on here.

Bui

I'm also young (in my 20s) and have a high paying job. If you have a stable job with little to no chance of being laid off, you should get the car. So long as you are saving between 1-2k after expenses, you should be fairly safe. (Worse case? Just sell the car if needed)

That being said, before pulling the trigger, I recommend saving enough money in an "emergency" fund that will cover 6 months of total expenses (car/house/insurance/credit card/student loan/etc). That way, IF **** happens, you will not be too much underwater.

cheapthrills

A good friend of mine who was 70 when he bought his first corvette told me "don't wait until you're 70 to buy a corvette". I listened to these wise words😊

detroitguy

I've already checked insurance prices. Actually cheaper than my ATS

AORoads

How low is the student debt? (covered in post 24--not lower than investments) The ATS is an all-year car and unlike some readers/owners, my take is the Corvette is not--where do you live?

I think you have some very good ideas on this thread that you will benefit from weaving into your thinking. But maybe the best one IMO is to run this by a true, financial planner of your choice---for their ideas, and reasons as to why it may or may not be a good idea for you to buy a $50K+ car at this time.

I will say that looking at your initial post, I thought you had things together. I thought that I'd have to give it quite a bit more thought before I could say you're set to go for a new car. But after reading some of the other posts, which essentially did the thinking for me, I see where they are coming from (and where I've been throughout my life) and I respect and would factor in their suggestions.

That doesn't mean you will get a Corvette at 23, or not get it until you're 70. But with a bit more planning, it could be far sooner---just, maybe not today or this year. Why? Because, looked at it very objectively, you DO have debts outstanding. And you don't have all that much in savings, either investments or otherwise, including your 401K.

Good luck no matter what road you choose.

River Rat

If you do decide against the Vette at this point, you may take a look at the Camero. At about half the price you get a lot of bang for your buck. Its like an ATS with a Vette motor.

detroitguy

My last car was a 2014 Camaro (lease). I considered buying a new one instead of a Vette to save a few bucks, but at the end of the day, I won't be fully happy knowing a Vette is only $10-15,000 more. I'll have buyers remorse.

Mike1C7

You should listen to Dave Ramsey. Or, perhaps go to his website. Warning, he would be against buying a Corvette right now at your age. However, if you take his advice when you are my age you will live like no one else.

It's a different lifestyle but before you know it you will be debt free and as they say you will not be a slave to the lender. If you don't follow this advice you will always owe someone.

I know there are plenty of older folks on here that are debt free. Probably plenty more that look back and wished they had done things different and would have been debt free much sooner.

At your age...you have the chance to change your life now. Discipline is the key! My 2 cents!

jdhommert

Ah, Corvettes and personal finance, the two things I'm consumed with.
I'm also young and do ok financially and have a pretty good head on my shoulders as far as money goes compared to most people.

Cliff notes:
Wait until ATS payments are gone
Pay off your school debt first (not using 10k)
Have another car to drive?
Invest in Roth IRA?
Keep at least 10k in account for emergency fund
Save up more for down payment if you want to keep your payments lower

Wouldn't do it until you're not only done with the ATS payment, but get those school loans paid off too. If your money is in savings, it's probably earning 0% and the school loans are at least a couple % I'm sure. Either way, unless your money is in the market, pay them off. I wouldn't use all 10k to put towards the loans as you need to leave money for an emergency fund as people have said. I'd spend all your extra income towards those loans. It should take you less than 10 months to pay them all off and thats if you keep the 10k in your bank for your emergency fund.

If it was me, I'd make 100% sure I fully fund my Roth IRA every year. Now it all depends on your tax rate now vs then, but Roth IRAs are great. All your money grows tax free and isn't taxed when you take it out, unlike a traditional 401k/IRA. Some love Roths because they are scared of what the tax rates will be in 30-50 years. I love them just because when you look at the $ in your account, that's yours and all yours. You don't ever have to worry about how much is going to be taken in taxes when you withdraw it. I'd really try to fully fund it, which is $5500 a year. Again, depending on your tax rate now/future you can maybe take some $ away from your 401k to put towards a roth. At least put like $100 a month in it or something. Really try to fully fund it. If you start now at 23, and retire at 65, you'll have about 1.4 million. If you wait until say 30 to start fully funding it, you'll only have 840k. About 500k difference from only $38,500 more invested. Just starting 7 years sooner. Starting asap is so important.

As mentioned, where do you live? Are you 100% sure you can run a Vette year round with no trouble? Keep in mind they've had some trouble with the tires on the Z51 in sub 40* weather, and its suggested to not drive on them below 40* (This is coming from a guy who daily drove a C5Z on 555RIIs through lots of snow....it worked out ok but was pretty dumb too)

So maybe plan for a year or two from now. In a year you'd have your lease note gone, your loan paid off. Then in the next year you can use to save for a down payment/pad your emergency fund/mod fund. In that time prices should fall a lot as GS will have been out a year or two, Z06 should have improvements...prices should be lower by then. If you save for an extra year or so for a downpayment, maybe that can lower your monthly payment enough to where you'd use that extra money every month to go towards your Roth IRA.


I'm also planning a C7 purchase in a year or two hopefully. Need a house with a garage first. Need to decide what city I want to work in and stay in first. Oh, my damn life.

River Rat

I agree. I wouldn't be satisfied with the Camero either. But, isn't the difference more like $30K+ ?

joemessman

I believe he should have a cash reserve unless the interest rate on the debt is extremely high.

jdhommert

While I do totally agree....I also disagree I guess.

I used to listen to Ramsey. I think what he says is outstanding for people that dont know a lot about finance and especially have gotten themselves in debt over the years.

He will basically always tell you to never buy a new car and would recommend against a Vette until you're very well off. He believes in having nice rides, as he has some too...but He says everything should be paid off and you should have a lot of money in the bank.

My mom has driven in my head that debt is the devil all my life. Literally sat me down when i was 4 and explained to be how awful credit cards were. I almost have never had any debt in my life, and don't have any now. My mom and Ramsey have the principles of if you don't have the cash to pay for it, you can't afford it.

Here's the thing. Dave's slogan of "Live like no one else today, so you can live like no one else tomorrow" is great. Makes so much sense. However, it doesn't account for actually enjoying life when you are young. I work in long term care. Many, many people have told me enjoy life while you are young. Don't wait to travel. Do what you want now, while you can. A couple I grew close to made plans to travel when they got older, then one got sick, then the other, had to stay around for treatments and such....and next thing they knew, they are both living in a nursing home basically. Spending the money they saved to travel to live in a nursing home.

Tomorrows are never guaranteed. Lots of people get cancer or whatever when they are younger. Life happens. You may save and never be able to get that Vette or enjoy your money. When you are older you want to be able to look back at your life and smile and have life experiences to share and remember. If you try to pinch every penny and never spend it on anything, you'll be a multi millionaire...but you'll never spend it probably, so what's the point? You get in the habit of saving every penny, you can't bring yourself to spend it. A rich farmer I knew was such a cheapskate he died using old socks as sleeves/gloves for his arms because he was too cheap to buy gloves, new long sleeved shirts, to turn the heat up at home,to pay for his own room at the SNF to control the temp and do what he wants. Needed a lot of new things, and died a multi millionare who was miserable because he was too cheap. He was literally crying all day, every day before he died. While parts of me understands that as I have a hard time spending money myself....if you are saving you're money like that you're whole life, you have to be able to blow and spend it when you get older. Lots of people I have seen just turn into people that hoard money and aren't able to actually spend it when it's time. Obviously I'm not saying blow your money and be stupid with it when you are young, just because there is a small chance you may die at 50. Just enjoy life when you are young and don't put it off until 40 years from now.

As mentioned, I have a hard time spending money. People yell at me all the time because of it....but I've realized that you have to enjoy life, and I plan to. I have enough money saved/make enough to buy a C7. I'm going to wait a bit until all my ducks are in a row first though.

Basically what I'm saying is- Be very, very smart and careful with your money.....but pick a thing or two here and there that you really really enjoy, and spend your money on that. For me it's cars, and maybe going to a awesome concert a couple few times a year. I basically spend almost none of my money on anything else, I save at a crazy rate. I will buy a C7 when it's time.

Tomorrows are never guaranteed.

jdhommert

Ya, I think his best strategy is to attack it hard monthly and knock it out as quick as he can. I might have a diff view if he had enough to just wipe it out all at once. I'd be totally cool with using like 5k or so to pay part of it down, but I wouldn't wipe out your savings to pay it off 6 months sooner to save a few bucks. If you do use some existing savings, make sure afterwards you build your savings/emergency fund up to 10-15k or so. I guess either way it's not a big deal, but just don't empty your bank account and risk not being able to pay a surprise expense just so you can pay off your loan a few months sooner.

I used to keep a lot of money in my savings....but I try to only have about 5k in my bank, and put the rest in the market to earn money. Worst case if I do need the money, I can always pull it out of the market. This isn't the Dave Ramsey by the book thing to do, but with the market down I figure why not buy low, earn dividends and if my place burns down or whatever, I can always sell some stock in the very rare case I need it.