Where I am from my salery is quite okay to be honest. I get about 3700 € after taxes (state insurances, health care etc.) each month but I don’t see me affording a car anytime soon.
I pay about 1200 € a month on my debt for my house, so I have about 2500 € left. Another 600 € go away for electricity, water, trash, internet, phone provider etc…
Leaves me with 1900 € left for the month. I’d say I spend about 900 € for food and household supply a month.
1000 € I save 500 € for my house for later. 250 € for vacation (3000 € in total a year) And 250 € for car.
It is going to take me about 5 years to save for a 15.000 € car. I don’t know how people buy BMWs, etc. I know I don’t earn that much but I need a car somehow my current car is breaking down and I got no money saved yet. Only about 1500 € cause I spent all my money on paving (had to be done) and my emergency saving wasn’t enough for the bill of the paving and other work on that area around my house.
I only save since 3 years cause I wasnt able to before.
I am not even ranting about the joke of a car I might get with 15.000 €. In my country I can’t even get the smallest Toyota with that. It’s a friggin’ joke that a Toyota Aigo or whatever it is called is going for 19.000 € (new) but whatever.
I don’t know how people buy BMWs
Two options:
- make more money
- go into debt
Most people choose the second option.
I spent all my money on paving (had to be done)
Did it though? I’m not saying it’s not the case, but I’ve seen a lot of people do things because “it had to be done” when it really didn’t.
For example, my furnace stopped working. So I called an HVAC company, and they said I could either repair it or replace it, and they obviously preferred replacement since that nets more money. I opted for repair after calculating that it would only need to survive another 2 years for me to save money vs the expected life of a new furnace, and the repair was subsidized a little by the manufacturer’s warranty (and they said nothing else looked bad). Another one was my car had an expensive problem, and no mechanics would touch it, and they basically said I should just replace it. I did some research and found a much cheaper solution (just a bit of soldering, so I sent it to a repair service; but I did have to rip the dashboard apart to get to the board), and it’s been working reasonably well since.
Contractors will tell you the more expensive option “needs to be done,” so be very careful about trusting everything they say. The more expensive something is, the more you should seek a second or third opinion, and most things that “need to be done” can wait a bit.
That said, don’t put off real emergencies. A leaking roof, for example, can do a ton of damage if not repaired quickly. But do be vigilant about what is and is not an emergency.
I only save since 3 years cause I wasnt able to before.
Well, you’re on the right track!
Also note that buying used cars is absolutely reasonable. I have never purchased a new car, and I don’t intend to start now. If you do some research, you can find a really solid car that’ll last 10-15 years for that 15.000 €. The fact that you’re able to save that in just five years means the other 5-10 years will just go to extra savings.
Starting out w/ saving sucks, but the longer you do it, the better off you’ll be. Don’t fall into the debt trap, since that’ll suck all of your spending.
You don’t have to buy everything in cash, but I do recommend having a short-term plan for paying off anything you finance. Check out The Money Guy for advice about this type of thing. For cars specifically (this page on their website breaks it down, they have a rule called 20-3-8:
- 20% down
- finance for no more than 3 years
- payment should be no more than 8% of your income
In general, you want to avoid debt for depreciating assets like cars, and keep debt for appreciating assets like houses until you have the means to pay it off.
I have a BMW. I afford it because I bought it heavily depreciated out of warranty and try to do most repairs myself. I have a trustworthy independent mechanic who will do jobs for cash if it’s too hard to DIY
I learned a while ago that just because someone drives a nice car, doesn’t mean they got it through financially sound means. Way more people are deep in debt than you think.
44.000 €/year is certainly decent money but definitely not “buy a (new) BMW” money. Many years ago I got a little promotional booklet from the guys at Car Talk, a public radio show in the USA. In it their conclusion was the best value for your money is to buy a used car that’s about 3-years-old and sell it after 6 years, assuming average driving (I think around 10.000 miles/year, or around 16.000 kilometers/year). The car will lose its most value in those first 3 years and lose value more slowly after that. The flip side is the car will have increasing maintenance costs and likely lose warranty coverage in that time, and if you have to finance the car the interest rates likely will be higher than buying new.
The car will lose its most value in those first 3 years and lose value more slowly after that
That’s a bit less true these days than it used to be, cars are retaining their value a bit longer.
I personally go for about 5-7 years old, and I keep it as long as the repairs cost less than the expected cost of a new one, averaged out over the expected life of the new one. That ends up being something like $1000-1500/year in repairs and depreciation, so that’s kind of my rule of thumb.
As a result, my cars are old (one’s almost 20 years old), but still quite reliable. I’m finally looking to replace them, not because repair costs are high, but because better options are available. Our family car chugs gas like there’s no tomorrow, and I can get a similar car w/ twice the fuel efficiency. My commuter isn’t particularly inefficient, but I could totally get an EV for it and never have to visit a gas station for that car again. So I’m looking for inexpensive replacement options for each.
However, I also have a garage, two cars, and am willing to do basic repairs on my car myself, so I’m a lot more tolerant of older vehicles than someone who only has one and doesn’t have the tools or space to do their own repairs.
The only time I recommend buying a brand new car was during COVID, when they were actually cheaper than gently used cars. Get something used that’s about half the price of when it was new, which should be somewhere in the 3-7 year mark, depending on the make. Most cars are expected to go 150-200k miles (250-300k km) without issue, so find something with relatively low miles (50-60k miles, or <100k km) and you should get way more than half the expected life for less than half the cost vs new.
I’m the last person you ever want to ask for financial advice, but I was shocked at how much food costs for you. We spend a little more than half of what you do on groceries.
Also, I’m not sure how common this is in your country, but here in the US, the vast majority of people finance their cars. Most of the people you see driving around in “nice” cars don’t own them outright; their bank does, and they’re paying off their loan over a period of (usually 5) years.
It costs more to finance than to buy outright. The bank wants to make money in interest, so it’d be more than the cost of saving for the car. The longest loan I’ve seen is 72 months (6 years) and that’s still not going to help OP get a new car.
Oh, you’re absolutely correct. If you can buy outright, that’s the way to go. The only reason I brought that up is because OP mentioned “I don’t know how people buy BMWs, etc.” Some are rich; a lot are financing. Saving first, if you can, is certainly the best option, though.
Is anyone going to tell them?
You’ve got a house. I think that puts you ahead of most. (If you bought within your means.)
Any particular reason a vehicle is necessary? Bikes and local transit aren’t an option?
Not OP, but it always rubs me the wrong way when people suggest bikes. I don’t know your situation or theirs, so I’ll use my own.
If I wanted to ride a bike to the grocery store, it would take me an hour, and I’d somehow have to lug everything back on a bicycle. If I rode a bike to work, it would take multiple hours. If I wanted to pick up building supplies, dirt, concrete pavers, whatever, I’d have to rent a truck.
Public transit doesn’t exist in my city, much less my neighborhood.
What you’re suggesting works great in a major metro area. For many of us, a car isn’t a luxury, it’s an absolute necessity. Not to mention, who wants to wait for a bus or train to take them home after work? Bicycles are good for exercise in a controlled environment. They are not appropriate for everyday transportation, and they are a hazard to drivers; they absolutely should not be allowed on the same roadways as cars. Buy a motorcycle or a scooter if you want to. Ride a bike off-road if you want to burn calories.
Mate, somebody just asked if a vehicle is necessary (since they are expensive). For you (and plenty lf other people), the answer is ‘yes’, but that doesn’t mean it is for everybody.
I may have overreacted, but Lemmy tends to be very much “fuck cars, ride a bike.” If someone is already having financial troubles, is suggesting they forego driving really constructive? At that rate, why not forego electricity or running water?
If someone is having financial troubles, question every expense. The goal is to free up cash in the budget, not to justify continuing to be poor. Asking about things that are often assumed to be true but may not is a good practice.
Sure - but dealing with those negatives temporarily can enable you to save up and obtain a car.
