My monthly net income is $2,000 and I pay out about $1,000 in rent and bills. I can make a down payment of $3,000 to $7,000, depending on the car I get. Should I finance a $30,000 car or save for a house/condo down payment? Please help with any suggestions.
As a dipped in motor oil gear-head, I am loathe to suggest to anyone that he or she not buy a new car, but that’s what I suggest for you. First off, your monthly income won’t support payments on a $30,000 car, even if you put $7,000 down. The monthly payment would be more than $450 per month for five years.
Also, insurance would likely add at least $100 a month to that. Given what you’ve said about your monthly expenses now, I don’t see how you could afford food or other necessities. Also, you will be better off in the long run using your money to by your first home, where you can begin to build some equity and look forward to the day when your financial situation improves to the point where you can afford that $30,000 car.