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Anyone willing to evaluate my budget before C7 purchase?

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Anyone willing to evaluate my budget before C7 purchase?

 
Old 05-11-2016, 10:56 AM
  #1  
detroitguy
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Default Anyone willing to evaluate my budget before C7 purchase?

Hi everyone! I know this is an odd question, but hopefully you guys can be of some help. The reason I'm asking here is, you're all car/Corvette guys and understand the desire for the car. Asking family/friends/finance forums doesn't help much, since most of them think any expensive car is pointless. With most everyone here being older and wiser than me, I'm looking for advice on if I can comfortably afford a Corvette.

-I'm 23, two years out of college, have a very stable job, and own a house
-Single, no kids, one dog
-Monthly income after taxes/contributions: $3,750
-Contribute 13% to 401k (me and company contribution combined)
-Current monthly expenses (mortgage, car lease, gas, food, entertainment, student loans, dog food, etc.): $2,000
-I have $1,750 left over, give or take
-Savings: ~$10,000

I currently lease a 2015 ATS for $389/month (one year left). Financing a Corvette will about double that - I'm planning on a payment of about $850/month. I've already gotten insurance rates and it's about $30 cheaper per month than my ATS.

Besides my mortgage, my only debt is $17,000 in student loans. My payment is $236/month, but I've been paying $250-$300/month. I'm paid ahead about 10 months.

So...I'm looking for advice on purchasing a new or slightly used C7 once my lease is up (or when a pull ahead is offered). All said and done, my monthly expenses will go up about $450 if I purchase a Corvette. This would leave me with $1,300 after all expenses every month. Seems reasonable. Any advice?

P.S. - Please don't turn this into a cash vs. finance thread.
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Old 05-11-2016, 11:10 AM
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g's13 GS
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save as much as you can until the ATS lease is up, then find a used C6!
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Old 05-11-2016, 11:24 AM
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Interest rate will be higher on a used car, buy new. Do it...

You cover your bases, that's clear...you're young bro, you have plenty of time to calculate sh*t. Make it work...buy the car. It's not just about dollars and cents, it's about enjoying life. Just don't turn into a douche if you buy it....stay humble man.

Mortgage and all this...you're really trying to lock it down for life aren't you? Enjoy life man instead of trying to check all of societies boxes (house, car, wife, kid, etc). Not sayin you are...just sayin...live first.

Last edited by RC000E; 05-11-2016 at 11:26 AM.
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Old 05-11-2016, 11:30 AM
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Originally Posted by RC000E View Post
Interest rate will be higher on a used car, buy new. Do it...

You cover your bases, that's clear...you're young bro, you have plenty of time to calculate sh*t. Make it work...buy the car. It's not just about dollars and cents, it's about enjoying life. Just don't turn into a douche if you buy it....stay humble man.

Mortgage and all this...you're really trying to lock it down for life aren't you? Enjoy life man instead of trying to check all of societies boxes (house, car, wife, kid, etc). Not sayin you are...just sayin...live first.
I definitely want new, if the price is right. I figure if I can get out of my lease at the end of this year or early next year, I'll be able get a great deal on a 2016.

And that's my theory on life! Have fun. Everyone tells me to save, save, save, I don't need a fancy car right now, blah blah blah. But I work hard for my money and I want to enjoy my life. I'm sick of people working for their money and not doing anything fun with it. I'm a huge car person, always have been, so this is a huge dream of mine.
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Old 05-11-2016, 11:31 AM
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You sound like you plan things well, do what your comfortable with. I'd look for a 15 leftover when the 17's are out and get a good deal on it. As stated above the rates on used is higher so look for a leftover new.

Last edited by cheapthrills; 05-11-2016 at 11:32 AM.
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Old 05-11-2016, 11:37 AM
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Asking a financial advisor would be more prudent than asking a bunch of Corvette guys. Just sayin'...

You'll get a lot of opinions here but it will most likely turn into a pi*sing match between those who buy with cash and those who get loans.

Good luck!
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Old 05-11-2016, 11:40 AM
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Originally Posted by cheapthrills View Post
You sound like you plan things well, do what your comfortable with. I'd look for a 15 leftover when the 17's are out and get a good deal on it. As stated above the rates on used is higher so look for a leftover new.
I've been looking for 15's now and there just aren't m/any left. Mostly Z06's.
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Old 05-11-2016, 11:46 AM
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Not sure why you have $10K in saving and $17K in debt instead of just $7K in debt (that you can pay off in roughly 7 months). Oh and you should have an FU fund that has at least 1/2 of your yearly income ($23k). Being debt free is a wonderful position of power and certainty that you can serve you well. Listening to "Money Mondays" from Tom Leykis at http://blowmeuptom.com.
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Old 05-11-2016, 11:57 AM
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Your financial status is ok but not rock solid. I would wait until the ATS is paid off, increase your savings to 18% and keep your Vette payment at $550 per month or lower.
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Old 05-11-2016, 12:01 PM
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I've been in your shoes, I have very fond memories of my first Corvette and you can't put a price on that. Make sure you buy a car very well priced so you can be in a position to dump it if things get tight. Work a few extra hours, bring your lunch from home no fancy dinners and enjoy life. I understand the balance between enjoying life and planning for the future, I work in an industry that when things go sideways you may not be coming home.
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Old 05-11-2016, 12:02 PM
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Originally Posted by defaria View Post
Not sure why you have $10K in saving and $17K in debt instead of just $7K in debt (that you can pay off in roughly 7 months). Oh and you should have an FU fund that has at least 1/2 of your yearly income ($23k). Being debt free is a wonderful position of power and certainty that you can serve you well. Listening to "Money Mondays" from Tom Leykis at http://blowmeuptom.com.
I agree that if you pay your student debt off then you can use that portion being 236 extra a month to put towards the car payment

That makes the car payment MUCH more affordable. Understand



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Old 05-11-2016, 12:02 PM
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Originally Posted by defaria View Post
Not sure why you have $10K in saving and $17K in debt instead of just $7K in debt (that you can pay off in roughly 7 months). Oh and you should have an FU fund that has at least 1/2 of your yearly income ($23k). Being debt free is a wonderful position of power and certainty that you can serve you well. Listening to "Money Mondays" from Tom Leykis at http://blowmeuptom.com.
I've been told to pay off the loans aggressively but not in large chunks since the interest rates are so low.
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Old 05-11-2016, 12:04 PM
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Looks like you have a good head on your shoulders for being 23. I say go for it and like RC00E stated above stay humble and live life and enjoy it.
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Old 05-11-2016, 12:14 PM
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You seem to be thinking very clearly. Someone above mentioned talking to a financial advisor; keep in mind that their job is to help you make and save money and most would probably not recommend buying the car at this point. Now, on the other hand, you seem to be disciplined and have a solid plan. Getting out of your current lease early will likely cost you some upfront money, so plan for that. Keep in mind that while the C7 is a great car, it is not a must-have. The good thing is you have no responsibilities other than yourself and your dog and that does make a huge difference.
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Old 05-11-2016, 12:21 PM
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Originally Posted by m3incorp View Post
You seem to be thinking very clearly. Someone above mentioned talking to a financial advisor; keep in mind that their job is to help you make and save money and most would probably not recommend buying the car at this point. Now, on the other hand, you seem to be disciplined and have a solid plan. Getting out of your current lease early will likely cost you some upfront money, so plan for that. Keep in mind that while the C7 is a great car, it is not a must-have. The good thing is you have no responsibilities other than yourself and your dog and that does make a huge difference.
I definitely won't end the lease if it costs me money. With a lease pull ahead, GM usually pays the last few payments for you. That's what I'm waiting for.

Exactly - as I mentioned in OP, most people I talk to don't understand the desire for a nice and/or fast car. That's why I wanted to ask here.

And yes, my thinking is, now's the time to splurge and enjoy life since I'm not tied down. Might as well have fun now since I can afford it, before a wife/kids come into the picture...

Last edited by detroitguy; 05-11-2016 at 12:58 PM.
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Old 05-11-2016, 12:55 PM
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Seems perfectly reasonable to me. My thinking would be to wait until the ATS is done, put $5K or so more into the savings account, and then go buy new. If I had that much leftover to spend, I'd already have my C7. I would also do just the same with the loans, the rates are so low, and if Clinton gets elected maybe the Congress will be stupid enough to zero out a lot of student loan debt.

And if you can afford to increase the 401k, or put some of the monthly spending money into a Roth, that would be a good idea.

Last edited by vader86; 05-11-2016 at 01:11 PM.
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Old 05-11-2016, 01:06 PM
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Originally Posted by somevetteguy View Post
I've been told to pay off the loans aggressively but not in large chunks since the interest rates are so low.


Helps build a great credit rating which will keep rates lower on a car loan.
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Old 05-11-2016, 01:21 PM
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I'm in a very similar situation myself. Comparable income and financial commitments. So I'm probably not the best to take advice from since we both have desires that most people don't understand.

My thoughts:

First, pay down the student loans while you still have the ATS. Personally, I would get that below $9k before jumping into a high car payment. We shouldn't pay those guys anymore interest then absolutely necessary!

You didn't mention what region of the U.S. you live in. Will you be daily driving the Corvette? Or will you have a cheap secondary vehicle for work and other ordinary tasks? This could impact the responses from other members.

Second, I suggest going for a 2016 if you can find a reasonable deal when the time comes (shouldn't be a problem based on current discounts). The used market seems to have inflated prices when you consider the discounts available on new vehicles. The extra features on the 2016 are nice to have. Plus, finance rates are more attractive on new vehicles and may get better as the year goes on.

What trim level are you looking to get? Z51, 1LT, 2LT, etc. That will also impact the responses on here. Base cars can be had in the low $50k's and Z51 2LT's in the low 60k's which can swing the payment quite a bit.

Aaron
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Old 05-11-2016, 01:22 PM
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Just my 2cents but my advice would be to save up more money so that you can put more down and have a lower payment.

If a corvette is going to really make you happy then get it but having a car payment that is probably as much as your mortgage is kinda a lot.
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Old 05-11-2016, 01:46 PM
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" It's not just about dollars and cents, it's about enjoying life...." I agree with this. No 'vette purchase of mine made sense but I have not regretted purchasing my C5 or my C7. If you can make it happen do it. What you might regret is not making the purchase when you had the chance...
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