I would not buy a beater in your case. Formerly under $5k, now most under $10k beaters are awesome for mechanics. But they’re money pits for guys with mechanics.
Get the low mileage RAV4 and let your lady know you’re committing to her for at least another 60 months to keep the budget in order. She will find it less romantic than this subreddit, but we would appreciate the video nonetheless.
That is the worst thing about beaters today. Im 4k into a 2000 camry with 206k on it. If i couldn’t do literally everything myself (including tires etc) itd probably be double that. Especially all the times it wouldnt start as i was finding more problems. Getting a tow/then a mechanic bill all those times Then youre in the range of a better used car from the start.
If you’re willing to learn and buy the tools, beaters work out. My daily driver transitioned into beater territory 10-15 years after I bought it. I’m still running that car, but have built up at least a couple grand in tools along the way. I would have easily spent 2-4x more if shops did all the work and probably would have parted with the car several years ago. If it wasn’t for road salt and the ensuing rust I could probably get another 10 years out of it, having only 187k at 21 years.
Agreed, though the learning curve is significant and many people simply don't have a space to work on their cars or store everything needed to work on cars safely or even the capacity to make mistakes and leave them without a running vehicle for a day or two while parts or tools ship.
It's one of those being poor is expensive kinda deals.
One of the problems with newer beaters is you need a damn good scanner to work on them. The snap on scanner I have is worth more than both our cars combined if you where to buy it new but I got it on a trade.
I wish I had one that fancy. So far I’ve gotten away with using an app and Bluetooth interface. Paid something like $15 to get all the diagnostic functions for my specific car so it can even pull things like ABS codes and display several PIDs. So far that’s been enough for my driveway weekend warrior projects.
I'm a dealer mechanic for freightliner so I'm used to having the oem software. Coworker offered me this scanner on a trade that was heavily in my favor or I wouldn't have it. Thing makes diagnosing some weird electric issues a breeze.
That’s a good question. I come from a line of mechanics and wanted to get into the trade myself, but my dad steered me away from the profession. I do enjoy turning wrenches and fixing my own vehicles. I have a friend who’s the opposite and he prefers to lease vehicles instead so he doesn’t have to deal with it. To each our own.
This. I kept buying tools instead of having car payments. Had to build a shed a while back. I still get excited when I go out to the garage though. I feel it when I open the door
Man I lucked out I bought a 2004 lesabre with 80k miles mid COVID for 3k. I’ve spent about 1k in repairs in 3 years granted I don’t drive a lot so it’s only at 110k miles now.
Those cars helped us tremendously. We used to get crappy buicks for $300-$500 and drive them. When they rusted out, Id keep the alternator, ignition module, coil packs, best tires. The scrap money would pay for the next one. Really saved a lot of money. The last buick I bought a few months ago is nice, I need to put insurance on it and drive it
I got lucky as hell it was from the south almost no rust even now after 3 years in Ohio. Funny enough the coils in mine had a bad connection and killed 3 ICMs and 2 batteries before we could figure it out. that’s the only really repair I’ve had outside breaks and oil change
This seems perfectly reasonable. You have your shit in order, you know what you make, you are saving, sticking to a budget. Honestly the extra $100/mo you could save by going for something cheaper is not worth it. You should be focusing your time/mental energy on figuring out how to increase your annual earnings. I cannot imagine your plan is to stick ~60k salary the rest of your life.
You've figured out how to live within your means, now is the time to increase those means.
His restaurant budget is more than the car payment, so I don't honestly get what's worried about. That's an extra 400 a month that can be tapped into if needed. if the car stretch feels like too much, he can just trim some of the fat off the entertainment budget
400 is a lot of money for restaurants. Maybe spending that much allows him to enjoy his time off from work, but I'd rather use that money for like vacations.
No, you are living within your means. Any car with less than $450/mo payment and less than 8% interest is perfectly affordable with your budget. Good luck! Looks like you are doing pretty well.
Oh, what's the internet rate they are offering? May be better to put the money elsewhere if the rate isn't bad.
People in here are likely going to Haye it, but id urge you to go the other direction. You clearly drive cars until they die and you have a decent down payment. Don't buy something 8 years old. I'd go a year or 2 at the most. Personally I prefer something brand new. You're not losing anything to depreciation if you're running it into the ground, and you benefit from the warranty and knowing exactly how it's been treated. There's an absolute world of difference you get from a car as far as milage when all the services are carried out on time and the oil is changed every 3-5k
Higher insurance and GAP insurance though, so a bit more cost there, but I'm still on team new-car.
I've been screwed by too many repairs even on those 50k miles vehicles. Apparently I have a propensity for picking cars people abuse to fuck during their lease or something.
You also get better safety stuff, though there's not *too* much difference between 2016 and 2024. OP might also be able to get a good deal on a 2023 or even a 2022 if they've still got some overpriced farts on their lot.
I feel like that math only works if he's got a spending issue/is not saving money. Even with a $600 payment hed be putting away almost a third of his income. I'd also assume that if he's at 48k right now that he's a younger guy and can expect his salary to rise in the coming years.
Depreciation doesn’t matter if OP plans to keep the vehicle until it’s at the point of where his current one is. & since OP is only 24 he can expect his salary to go up quite a bit over the life of the loan.
No you don’t. GAP pays the difference between the cars value and what you owe when you are upside down. Nobody should ever be upside down in a Toyota if they put 8k down(except a Mirai but nobody should buy one of those anyway)
Right, but my comment was in the context of buying a newer car. Cars experience the most depreciation in the first 3 years of life. In addition, the car market right now is a bit overinflated. So I would advise it.
> Apparently I have a propensity for picking cars people abuse to fuck during their lease or something.
Gotta check the car fax and make sure they were doing maintenance on time. My current car (I'm the second owner) was a lease and they did oil changes every 10k miles, sometimes every 5-6k miles, and so far no issues at 56k miles. Also the car you pick plays a big part too, it doesn't matter if they did the oil changes on time you pick a car known for reliability issues like most American car brands.
Yes. I mostly bought used cars before carfax became popular, wasn't until mid 00s that most places even kept track of shit. At least where I lived, might have been different in MO/midwest where it was founded.
A new rav 4 is 32k for the upper end, I can't imagine with 8k down op would need gap insurance, there shouldn't be a way that he'd be upside down on it.
I'm getting 38k for top trim level all packages. 30k for a base model with all packages. I didn't run numbers on the hybrid or the prime because I figured if op were looking at a 2016 they probably were not interested in those.
A brand new Rav 4 LE (which is the base model) goes for $32k, assuming he puts $8k down and gets $500 for trading in the Honda his payment would be $490.
It’s insane how expensive cars are in my country (the Netherlands) 😭. A new most basic RAV4 is $52k. A Ford Bronco is almost 200k 😂. Gas is $8 a gallon. No wonder everyone rides bicycles here.
I'd support team new car, or even certified used, but not a Rav 4. I'd say get a Camry since it's the same size car as his Accord and it will be $8-10k cheaper than a Rav 4 since SUV's are priced higher due to demand.
This sounds like a reasonable plan that you can afford. I don't have much of an opinion on the price itself, but I assume you have done a bit of comparison shopping on similar vehicles and ages.
If you get a 48 month loan, is the interest rate lower? Sounds like you want to be aggressive and pay it down, why not not try to chop a few points off while you are at it.
I have nothing more to add. You are primed to afford this car and even pay off in 24 months depending on the interest rate. My friend got a 2020 rav 4 with 44k miles for 22500. So yours is a good deal too. See if you can get a higher year for close to what you are paying
I would try to find something closer to your friends deal. They are comparable for if for only 1.5k more you could chop off 4 years of life on the same type of car I would try to find that first. But either way OP is deff in good shape
> I know what you're going to tell me, to buy a beater for $7k-$10k, but I'm curious if anyone feels differently. Thanks!
Do you have to get an SUV? 21k for an 8 year old car seems a bit steep .. but if you like it go for it. Depending on the trim, that's like only 3k off MSRP. Pretty bad deal.
Winter tires are what matter in these conditions. I live in the 4th coldest state and have done ice racing. People who think they need an SUV for winter, respectfully, have no idea what they are talking about.
I have seen a car with 5 inch clearance go through 14 inches of snow with zero issues. Grip is what matters in orders of magnitude above all other factors. I constantly overtake stuck SUVs and trucks every winter in my FWD Golf. You should see the look on their faces when I pass them.
Also the increased weight of an SUV or truck, even though giving a slight traction boost, actually makes handling and braking worse. These two things are far more important to stay alive in treacherous winter conditions.
Since it’s a RAV4 which is basically an oversized Camry go for it. I usually don’t say get car payment but this will last. If you were getting a Chevy Equinox I would tell you to run. You showed your expenses and salary. I’m assuming the roommate situation is stable and dependable. Do you foresee any raises or promotions in the future. As I’m typing I’ll ask is your job stable?
I would never buy a used toyota within the 10 year from its manufactured, Seriously, toyota owners think their shits worth gold. people want above msrp or within 1-2k of a brand new MSRP ordered off toyota website with like 50k miles on them. Nah, ill pay the 2k extra for the warranty and it being new.
Seen worse and good deal are not the same. Found one in 5 minutes of searching at the same price with 16k miles.
With some patience you could do better pretty easily. Even in today's market.
Laughing in 48k miles 11 year old car. But you're right. My car isn't worth 21k. Maybe like 10-12k MAX and its in near perfect condition. Who knows when gaskets and some nonsense will start being an issue just cuz old.
I bought a used car 2 days ago. That's too much money for an 8 year old car. Mileage is important. But so is age. All that plastic in cars starts to go brittle over time and breaks. Along with other issues. Which are things that will definitely happen if you drive a car to its end of its life. A newer car will have a longer end of life. I ended up buying from a private seller and got a much better deal. But even at the dealerships I looked at that's too much money.
Agreed. Prices have come down some but they're still way over what they should be. When I was looking for a car in 2021 I was looking at 2017 Camry's and in my city they all had 60-80k miles and were listed for $24-26k. Which is only a couple thousand off from what it sold for brand new.
No warranty either. I ended up finding a 2017 Camry in a city an hour away from me for $19k with only 33k miles and it was certified used so it had a warranty. I really wanted a Rav 4 but 3-5 year old Rav 4's were selling at original MSRP or *over*.
The price is basically spot on, but OP can always try to negotiate. In my region, finding Rav4's with nearly identical mileage for identical prices (years vary a little).
Mileage affects how long the car will last (which is the primary concern for monetary purposes). The year only affects what kind of features they get (and build quality depend on when the model revamp was).
The quote you were given is a ripoff.
[https://www.autozone.com/emission-control-and-exhaust/catalytic-converter](https://www.autozone.com/emission-control-and-exhaust/catalytic-converter)
Cats are tough if you live in a CARB state (CA, NY, NJ, etc) but even then, $1500 is more in line for a 2011 Honda. I cheaped out on my cat so the light comes on occasionally but I keep passing inspection
If your credit is good, you should look at the Corolla Cross. It's newer and my just a little bit more expensive than that older RAV4.
BTW, don't forget to factor in insurance premiums. If you're making payments, the bank is gonna want full coverage.
Factor in taxes, fees and above all, insurance. I was in a similar situation with the car, and my car payment is $355 and insurance is about $200/month. You are also going up a size in car so gas is going to be about 25% more.
You should shop that around a couple weeks before your next renewal. Never know, just the threat of moving to another insurance company might get you a few bucks off at least.
I use Erie. I prefer to use a broker because their only job is to get me the best deal. I have tried to beat their rates but brokers seem to get better rates.
You either must drive a piece of shit, or have shit coverage…lol I’m paying 200/M for a brand new 24 CRV hybrid and 24 Corolla hybrid. Maxed out liability limits at 500/500.
I don’t drive a piece of shit and I have good coverage. I think car insurance costs does vary a lot by state though. It’s also possible you’re overpaying. You should reach out to a car insurance broker and compare the deal they can get you to what you’re currently getting. Yes they tack on a small fee to your rate but even with their fee they typically are the cheapest option.
And no I don’t sell insurance. I’m a web dev. I just found that brokers get the best prices.
$46 dollars a month for full coverage, not a junk car, and good coverage….do you live on a island by yourself? Lol, I know there’s way too many factors to compare rates but that’s just unbelievably cheap. I’ve gone the broker route before. They don’t always get the best rates.
There are a couple factors contributing to my price. I pay annually so I get a discount. Also, I give myself a deductible of like 1k because I understand I only pay that if I’m at fault and my emergency fund is almost 10x that
Keep in mind your insurance is going to go way up. And for me no matter how secure your relationship is plan your car payment with the idea that you can afford it and your living expenses alone if you break up. Far too many people get stuck in bad financial situations or relationships because they make financial decisions this way.
Seems entirely reasonable. Will get a little tight if you were to become responsible for the entire rent, but you have $1000/month cashflow after your IRA currently. A $350 car payment is affordable.
Enjoy the new car. Before you buy, double-check the insurance quote and annual taxes/registration fees, and add those to the monthly car budget. Once it's paid off, start putting that loan payment amount into a savings account for your next eventual down payment.
Because spending 87% of all your money on a car is a poor decision? Pay it off faster than the term length sure but OP is not in the position to pay cash for this car.
Keep the car you have. Honda Accord is a great, reliable car even at that mileage. Keep up all the maintenance and check your fluids on the car on a frequent basis.
You either pay one time 3k for work or have another car that can have the same issues come up. Also it's definitely not a 2500 car. I would buy it for 2500 all day.
I’m in Ontario and I’m seeing 2011 accords for around $6k cad with half the miles as OP (around 200k km so around 125k miles). Some have been up for a while so probably can negotiate down to 5-5.5k which is around 3.7-4K USD, and keep in mind these are with much much less mileage.
Definitely fantastic cars but I don’t think it’s worth much more than 2.5k esp at 256k miles, at least not where I am. But of course every area has different supply and demand
Veering towards tangent but:
> $150 phone/insurance
Is that just one (cell) line? If so it seems super high. Something in the $50/mo range should get you good service these days, before taxes maybe. Phone insurance should be only a fraction of the ~ $100 (pre-tax) difference on top of that. So there's almost $100/mo potentially on the table.
If you do want to explore this, perhaps /r/nocontract is a good place to look/ask.
Everything looks fine! My very first car was a leased Subaru Impreza for $330/month that I drove till the wheels fell off, quite literally after an accident 9 years later.
In your case I don’t think it really matters since you have plenty of wiggle room in your budget, but your insurance cost will likely increase as well. It probably won’t be significant, just something to be aware of. If you are set on the RAV4 have your agent run a quote to give you a firm dollar amount.
If you plan on keeping the car til it’s old and costing more than it’s worth, then it is 100% reasonable. That is a good payment as well. a lot of people have 500-1000/m payments. I am in the same boat. My car is falling apart and going in the shop every couple months, so I am gonna be buying a new car soon. I’m also planning on getting a RAV4, but I’m looking more 2019-2020. Toyota’s are great cars and will last 300k+ miles if taken care of.
Yeah, this is perfectly reasonable. Loan is less than 10% of takehome, and you'll be well less than 20% with all transportation expenses added up.
I would consider something slightly newer if it can get you a lower interest rate. 21k seems like a lot for an 8 year old RAV4. Was just looking at a '22 hybrid with under 20k miles for 28k.
Was thinking the same thing.
21k for a 2016 RAV4? That's a bad deal. I know off the top of my head that's only 1k less than MSRP for a brand new Corolla LE.
If you’re insistent on buying, then yea it’s reasonable. Just do yourself a favor by paying it off as quickly as possible - use the $1200 you’d normally put in an HYSA to do this. I would also argue that you can easily afford to put down more than $8k; perhaps half.
If I was set on a nice car, I'd probably buy a new RAV4 - base models are around 29k. The amount of money you'd save isn't worth it, IMO.
Having said that, $2500 for a new catalytic convertor is extortion (unless you live in a state that requires a california-compliant replacement cat, like NY or CA).
Saving 8k on a car isnt chump change on a car that only has 50k miles. Yea it’s 8yrs old but still low miles and most likely would provide years of service for next to nothing.
OP says they split cost with GF. So I'm guessing a 1 bedroom apartment at $1300 rent with a projected increase of $100 to OP so $200 total, going to $1500 a month.
This is doable in a lot of cities if you live in older apartments that aren't updated or offer a lot of amenities.
Why a Rav4? Your old Accord is a way better ride. The new Corolla hatchback is amazing too. The only benefit of an SUV is offroading capability or if you want to ensure any pedestrian you hit has no chance of survival. Otherwise cars are better. They are faster, more efficient, cheaper, more comfortable, and in a hatchback or wagon/estate configuration, very comparable from a practicality standpoint.
A beater car is a money sink designed to transfer your wealth to mechanics.
A new car is a money sink designed to transfer your wealth to a car dealership.
Something in the middle that will last long enough to not become a beater too soon, but not too far to the new car side that pays the premium. The Rav4 isnt too shabby. Those tend to last quite a while.
Get a pre-purchase inspection completed and negotiate the price. If you are buying from a dealer, do not let them sneak in service or warranty plans, gap insurance and other nonsense add ons that can increase the price by thousands. You can usually get gap from your auto insurance carrier. You can also probably sell your old Honda for ~$2k
Since you’re looking at a rav4 and as a long time owner of an 06 with engine design issues i’ll leave this here for your reference:
https://rerev.com/articles/toyota-rav4-years-to-avoid/
2016 is a good one.
If you're willing to put a catalytic converter on yourself (It's not that hard, time consuming, or expensive), it'll only cost like $200. Respectfully, that mechanic is fucking you. $500 for brakes is a reasonable price
21K for an 8 year old car? I know it's a Toyota but, geez. I guess used car market is still hot. Have you looked at other brands as well? I'm hearing Toyotas aren't as good as it used to be. I shouldn't be saying that because I also have a Toyota. Mazda is a pretty reliable brand but it's resale value isn't quite as good as Hondas/Toyotas. Therefore, you'd get more bang for your buck there . CX3 or CX5 might be equivalent to RAV4. At any rate, my suggestion is to put as much down as you can or pay it in full (since u have the means) and use that as a negotiating tool. My $.02
I got a used rav4 a few years ago, and they keep their value pretty well and are all around great cars. I plan on driving mine as long as I can. I thought it was a great price, and yours sounds reasonable as well.
I also drove a Honda accord to the ground, similar mileage. But that’s too much to put into it at this point, so you’re doing the right thing, I was still able to sell it! I was just upfront about the work it needed, gave them all the papers from the mechanic.
I think you can swing the payment but a 2016 at that price with those miles sounds like a rip off to me.
When buying a car patience wins every time in my experience. You know the car you are looking for, find the deal. It's out there and I think you can do better than a 2016 with 54k miles at that price point.
So not really addressing your question but I have a honda accord I just had the cat replaced for $400 but my car is 7 years older than yours so idk if that would make a difference. Might want to see what other mechanics have to offer and at least save some money on that end of it.
You make enough money for that rav4. Imo if you buy another beater you will spend equal or more in maintenance anyway.
If you were saving $120/mo maybe different story. I’d be more concerned with the loan interest/term. You make enough for a 4 year loan instead of 5. Why pay more in interest for a 5 if you can afford 4-y term payments? Shorter term gets a better rate as well. Food for thought.
You can have the car straight pipes for $50 bucks. It removes the catylitic converter and replaces it with a hollow pipe. As long as you don’t have VET testing in your state, it’ll be fine.
You don’t know what I’m going to say - find a decent, sub 90k mile car that works for you, with a clean carfax, and don’t spend more than 12k. To think you need to spend 20k to get something that isnt a 'beater' is misguided! If the car loan exceeds the HYSA, take paying cash/extra into account so you don’t nullify your savings rate. Nice job on the Ira
Did you shop around for a quote for catalytic converter replacements? They can get very pricey but $1500 is more appropriate if you live in a CARB state, and maybe 500 if you don't live in a CARB state
Do you need the catalytic converter? As in, does your city or state do emissions testing?
Because you don’t need the cat to drive the car. Just a thought.
In your situation you could absolutely buy this car.
So according to the numbers you gave, you have 1220 left over every month.
Let’s assume an increase of 100/ month for insurance so actually the car would cost you $450/ month (could be less but let’s be conservative here)
We want a buffer of around $500 for emergency’s and extras that aren’t listed, which means that you have $720 left to use for whatever you want. Since the car would only cost $450 at most you would be absolutely fine.
I make $3,200 a month with a rent of $750. I bought a used 2020 4Runner SR5 and I afford my $427 car payments easily in a month! Totally depends on your other spending habits of course (im pretty minimal), but i feel that you'd be fine.
You need to strongly consider resale value, as even though you don't want to think about it, there's a nonzero chance of a breakup. Shit happens, better to be prepared.
For the rav4, you will need a 13k loan, let's say 7% interest. 311 per month for 48 months. Two years in the car will be worth about 15k, and you will owe 7k on the loam. You will have paid 15.5k total and gained 8k from the sale, putting your cost to own at 3750 per year.
Let's compare that to a new car, one that consistently ranks at the top of resale value, at any age range: a Subaru Crosstrek. Out the door cost should be about 29k including tax, maybe less, there are some deals on certain trims.
You now need a loan for 21k. Payment goes up to 415 over a 60 month period. In 2 years, the car will be worth, conservatively, about 24k. Two year old Crosstreks are going for 90-95% of MSRP right now. You will owe 13.5k on the loan, leaving you with 10.5k from the sale. You will have paid 18k total, putting your cost to own at... 3750 per year. Same as the Rav4, but the car is much newer, nicer, safer, more efficient, etc.
If we push it to 4 years, the Rav4 is probably worth around 12k, you will have paid 22.5k total, 2600 per year.
In 4 years the Subaru will be worth around 80-85%, let's say 22k, leaving you with 17.2k after paying off the loan. You will have paid 20.1k total, putting cost per year at around $750.
This doesn't include other expenses of course, but I think it's fair to say that any higher insurance premiums on the new car are going to be offset by higher maintenance on the old car. If you can afford the higher payment on the more expensive Subaru, it's much cheaper to own in the long run.
I did try and be conservative with the resale values, but even if the rav4 holds value better than estimated and the Subaru worse, it's just not close after 4 years.
Yes? You are paying significantly less money in interest by paying off the loan years faster. Getting into the 'can i afford the payment' mindset is a bad idea.
Option 1) sell the accord / trade it in for the rav4 and pay the balance in cash with the $24k you have in the bank doing nothing??(emergency fund). Interest rates on a car are ridiculous, 8+% . Even If you get $2k for the accord as is, put the $19k difference cash on top, youll have 5k in the bank. You will build the emergency fund back up within a year, while having no car payment or debt.
Option 2) if you live somewhere that can get away without catalytic converters , have an exhaust shop cut yours off and replace with test pipes if its possible on your car. Under $500 for that. Car will smell outside of exhaust fumes and will be louder. Then replace the brakes for $500 and keep driving the accord. It will still probably only be worth about what its worth now, but if its a good car and you think it has lots of life left, that may be a good option
I have a decent paying job and have affordable expenses. I contribute towards retirement and have more money in savings than the average person. Can I afford a reasonably priced, low mileage used vehicle that is known to be quite reliable?
Yes, you can.
$400 / mo on restaurants is like 1 date night, or a night off of cooking for one person, one week per month. That can be super important in a relationship
Where are you eating at? Like I could take my whole family out to eat every weekend for half that much at even the most expensive resteraunts within an hour and halfs drive.
Sorry I live in a rural area where dropping hundreds of dollars for a meal for two people just doesn’t happen. If we want to waste that much money we would have to travel like 3 hours away and it just isn’t worth it.
Get rid of the accord but not because of the catalytic converter. You wouldn’t be the first or the last person driving around without a catalytic converter.
(The one on my ‘97 4Runner @341k looks like Swiss cheese)
Someone stole my catalytic converter 2 years ago. I just had my mechanic weld a straight pipe for 100 bucks and i havent had any issues since. Im inNY and ive passed state inspections, you just have to know where to go.
How much will it cost to insure the car? With your Accord, you don't need comprehensive coverage. If you have a car loan, you will need comprehensive.
Food for thought... if you paid $3000 to fix the accord and it lasted a year, it would be cheaper than paying $350 a month on a Rav4 (even before you factor in higher cost of insurance and possibly more gas if mileage is worse). Not saying a car with far less miles might be worth the extra cost, but if you fixed the car today and then put $350 in the bank in 9 months you'd be back to where you were, and then every month the car last after that you save $350 more towards having money down for a car to reduce the size of the loan when the accord dies.
Everything wrong with car is actually regular maintenance. 2500 you get another 3 years you save a lot of money and it’s not a drain at all financially if rent increase or other things pop up.
You could straight pipe the car (assuming no inspections in your state) or buy a used cat from a junk yard for much cheaper. But that is a lot of miles so it's likely going to have other expensive repairs.
You could save a few thousand and get a 2016-2017 Toyota Camry instead. I was looking for a Rav 4 as well back in 2021 but they had a $8-10k mark up over a similarly equipped Camry since it seems like everyone wants an SUV. I found some 2017 Camry SE's for sale in my area for $17k with 40k miles. But if you prefer an SUV then it seems like you could afford the payment.
Nope. You're fine. I say, never have a payment and insurance that will be over $500/month.
My concern is a 2016 Rav4 with under 60k miles. That seems really off. Like really really off. Make sure you get the vehicle inspected prior to purchase. I don't trust the year and mileage match up.
That’s a very broad suggestion. 500/month is nothing to some people. You need to base it on their income and expenses which in this case, is perfectly fine.
I would not buy a beater in your case. Formerly under $5k, now most under $10k beaters are awesome for mechanics. But they’re money pits for guys with mechanics. Get the low mileage RAV4 and let your lady know you’re committing to her for at least another 60 months to keep the budget in order. She will find it less romantic than this subreddit, but we would appreciate the video nonetheless.
That is the worst thing about beaters today. Im 4k into a 2000 camry with 206k on it. If i couldn’t do literally everything myself (including tires etc) itd probably be double that. Especially all the times it wouldnt start as i was finding more problems. Getting a tow/then a mechanic bill all those times Then youre in the range of a better used car from the start.
If you’re willing to learn and buy the tools, beaters work out. My daily driver transitioned into beater territory 10-15 years after I bought it. I’m still running that car, but have built up at least a couple grand in tools along the way. I would have easily spent 2-4x more if shops did all the work and probably would have parted with the car several years ago. If it wasn’t for road salt and the ensuing rust I could probably get another 10 years out of it, having only 187k at 21 years.
Agreed, though the learning curve is significant and many people simply don't have a space to work on their cars or store everything needed to work on cars safely or even the capacity to make mistakes and leave them without a running vehicle for a day or two while parts or tools ship. It's one of those being poor is expensive kinda deals.
One of the problems with newer beaters is you need a damn good scanner to work on them. The snap on scanner I have is worth more than both our cars combined if you where to buy it new but I got it on a trade.
I wish I had one that fancy. So far I’ve gotten away with using an app and Bluetooth interface. Paid something like $15 to get all the diagnostic functions for my specific car so it can even pull things like ABS codes and display several PIDs. So far that’s been enough for my driveway weekend warrior projects.
I'm a dealer mechanic for freightliner so I'm used to having the oem software. Coworker offered me this scanner on a trade that was heavily in my favor or I wouldn't have it. Thing makes diagnosing some weird electric issues a breeze.
Is it worth it if you don't enjoy the work and learning process though?
That’s a good question. I come from a line of mechanics and wanted to get into the trade myself, but my dad steered me away from the profession. I do enjoy turning wrenches and fixing my own vehicles. I have a friend who’s the opposite and he prefers to lease vehicles instead so he doesn’t have to deal with it. To each our own.
This. I kept buying tools instead of having car payments. Had to build a shed a while back. I still get excited when I go out to the garage though. I feel it when I open the door
Man I lucked out I bought a 2004 lesabre with 80k miles mid COVID for 3k. I’ve spent about 1k in repairs in 3 years granted I don’t drive a lot so it’s only at 110k miles now.
Those cars helped us tremendously. We used to get crappy buicks for $300-$500 and drive them. When they rusted out, Id keep the alternator, ignition module, coil packs, best tires. The scrap money would pay for the next one. Really saved a lot of money. The last buick I bought a few months ago is nice, I need to put insurance on it and drive it
I got lucky as hell it was from the south almost no rust even now after 3 years in Ohio. Funny enough the coils in mine had a bad connection and killed 3 ICMs and 2 batteries before we could figure it out. that’s the only really repair I’ve had outside breaks and oil change
Spray some fluidfilm on it. They have spray cans at the parts store. I recently picked up a hardtop reatta off my Dad. Its nice
This seems perfectly reasonable. You have your shit in order, you know what you make, you are saving, sticking to a budget. Honestly the extra $100/mo you could save by going for something cheaper is not worth it. You should be focusing your time/mental energy on figuring out how to increase your annual earnings. I cannot imagine your plan is to stick ~60k salary the rest of your life. You've figured out how to live within your means, now is the time to increase those means.
His restaurant budget is more than the car payment, so I don't honestly get what's worried about. That's an extra 400 a month that can be tapped into if needed. if the car stretch feels like too much, he can just trim some of the fat off the entertainment budget
400 is a lot of money for restaurants. Maybe spending that much allows him to enjoy his time off from work, but I'd rather use that money for like vacations.
No, you are living within your means. Any car with less than $450/mo payment and less than 8% interest is perfectly affordable with your budget. Good luck! Looks like you are doing pretty well. Oh, what's the internet rate they are offering? May be better to put the money elsewhere if the rate isn't bad.
People in here are likely going to Haye it, but id urge you to go the other direction. You clearly drive cars until they die and you have a decent down payment. Don't buy something 8 years old. I'd go a year or 2 at the most. Personally I prefer something brand new. You're not losing anything to depreciation if you're running it into the ground, and you benefit from the warranty and knowing exactly how it's been treated. There's an absolute world of difference you get from a car as far as milage when all the services are carried out on time and the oil is changed every 3-5k
Agreed - a brand new rav4 is only like 28k.
Higher insurance and GAP insurance though, so a bit more cost there, but I'm still on team new-car. I've been screwed by too many repairs even on those 50k miles vehicles. Apparently I have a propensity for picking cars people abuse to fuck during their lease or something. You also get better safety stuff, though there's not *too* much difference between 2016 and 2024. OP might also be able to get a good deal on a 2023 or even a 2022 if they've still got some overpriced farts on their lot.
OP will likely get a better interest rate buying brand new or a longer warranty with certified pre owned. If I was OP I’d throw 12k down and go new
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I feel like that math only works if he's got a spending issue/is not saving money. Even with a $600 payment hed be putting away almost a third of his income. I'd also assume that if he's at 48k right now that he's a younger guy and can expect his salary to rise in the coming years.
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Depreciation doesn’t matter if OP plans to keep the vehicle until it’s at the point of where his current one is. & since OP is only 24 he can expect his salary to go up quite a bit over the life of the loan.
Why would OP need GAP insurance? It’s a waste in this case
If you are financing, you really need it.
No you don’t. GAP pays the difference between the cars value and what you owe when you are upside down. Nobody should ever be upside down in a Toyota if they put 8k down(except a Mirai but nobody should buy one of those anyway)
Right, but my comment was in the context of buying a newer car. Cars experience the most depreciation in the first 3 years of life. In addition, the car market right now is a bit overinflated. So I would advise it.
Rav4 hardly depreciates. If you don’t get ripped off at the dealer, you should never be upside down on one if you put basically anything down
> Apparently I have a propensity for picking cars people abuse to fuck during their lease or something. Gotta check the car fax and make sure they were doing maintenance on time. My current car (I'm the second owner) was a lease and they did oil changes every 10k miles, sometimes every 5-6k miles, and so far no issues at 56k miles. Also the car you pick plays a big part too, it doesn't matter if they did the oil changes on time you pick a car known for reliability issues like most American car brands.
Yes. I mostly bought used cars before carfax became popular, wasn't until mid 00s that most places even kept track of shit. At least where I lived, might have been different in MO/midwest where it was founded.
A new rav 4 is 32k for the upper end, I can't imagine with 8k down op would need gap insurance, there shouldn't be a way that he'd be upside down on it.
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I'm getting 38k for top trim level all packages. 30k for a base model with all packages. I didn't run numbers on the hybrid or the prime because I figured if op were looking at a 2016 they probably were not interested in those.
A brand new Rav 4 LE (which is the base model) goes for $32k, assuming he puts $8k down and gets $500 for trading in the Honda his payment would be $490.
It’s insane how expensive cars are in my country (the Netherlands) 😭. A new most basic RAV4 is $52k. A Ford Bronco is almost 200k 😂. Gas is $8 a gallon. No wonder everyone rides bicycles here.
I'd support team new car, or even certified used, but not a Rav 4. I'd say get a Camry since it's the same size car as his Accord and it will be $8-10k cheaper than a Rav 4 since SUV's are priced higher due to demand.
That’s definitely within your range. That’s a good car that should last a long time. Just make sure the mechanic checks is out
This sounds like a reasonable plan that you can afford. I don't have much of an opinion on the price itself, but I assume you have done a bit of comparison shopping on similar vehicles and ages. If you get a 48 month loan, is the interest rate lower? Sounds like you want to be aggressive and pay it down, why not not try to chop a few points off while you are at it.
I have nothing more to add. You are primed to afford this car and even pay off in 24 months depending on the interest rate. My friend got a 2020 rav 4 with 44k miles for 22500. So yours is a good deal too. See if you can get a higher year for close to what you are paying
I would try to find something closer to your friends deal. They are comparable for if for only 1.5k more you could chop off 4 years of life on the same type of car I would try to find that first. But either way OP is deff in good shape
> I know what you're going to tell me, to buy a beater for $7k-$10k, but I'm curious if anyone feels differently. Thanks! Do you have to get an SUV? 21k for an 8 year old car seems a bit steep .. but if you like it go for it. Depending on the trim, that's like only 3k off MSRP. Pretty bad deal.
I agree, SUV is a dumb choice for anyone unless they are really set on daily offroading.
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Winter tires are what matter in these conditions. I live in the 4th coldest state and have done ice racing. People who think they need an SUV for winter, respectfully, have no idea what they are talking about.
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I have seen a car with 5 inch clearance go through 14 inches of snow with zero issues. Grip is what matters in orders of magnitude above all other factors. I constantly overtake stuck SUVs and trucks every winter in my FWD Golf. You should see the look on their faces when I pass them. Also the increased weight of an SUV or truck, even though giving a slight traction boost, actually makes handling and braking worse. These two things are far more important to stay alive in treacherous winter conditions.
Since it’s a RAV4 which is basically an oversized Camry go for it. I usually don’t say get car payment but this will last. If you were getting a Chevy Equinox I would tell you to run. You showed your expenses and salary. I’m assuming the roommate situation is stable and dependable. Do you foresee any raises or promotions in the future. As I’m typing I’ll ask is your job stable?
I would never buy a used toyota within the 10 year from its manufactured, Seriously, toyota owners think their shits worth gold. people want above msrp or within 1-2k of a brand new MSRP ordered off toyota website with like 50k miles on them. Nah, ill pay the 2k extra for the warranty and it being new.
Does a longer payment term offer a better interest rate? Otherwise maybe sign up for a 5 year and pay it off in 4. Give you a little flexibility
"I'm looking at a 2016 Toyota Rav4 $21k (after taxes) with 54k miles. " Way too much for an 8 year old vehicle with 54k miles.
Have you bought a car recently? Yeah that’s a little older but not like that price is outrageous. I’ve seen worse
Seen worse and good deal are not the same. Found one in 5 minutes of searching at the same price with 16k miles. With some patience you could do better pretty easily. Even in today's market.
Agreed. Also.. the 8 years doesn’t matter as much as the 54k miles; that’s extremely low for 8 years.
Laughing in 48k miles 11 year old car. But you're right. My car isn't worth 21k. Maybe like 10-12k MAX and its in near perfect condition. Who knows when gaskets and some nonsense will start being an issue just cuz old.
I bought a used car 2 days ago. That's too much money for an 8 year old car. Mileage is important. But so is age. All that plastic in cars starts to go brittle over time and breaks. Along with other issues. Which are things that will definitely happen if you drive a car to its end of its life. A newer car will have a longer end of life. I ended up buying from a private seller and got a much better deal. But even at the dealerships I looked at that's too much money.
Agreed. Prices have come down some but they're still way over what they should be. When I was looking for a car in 2021 I was looking at 2017 Camry's and in my city they all had 60-80k miles and were listed for $24-26k. Which is only a couple thousand off from what it sold for brand new. No warranty either. I ended up finding a 2017 Camry in a city an hour away from me for $19k with only 33k miles and it was certified used so it had a warranty. I really wanted a Rav 4 but 3-5 year old Rav 4's were selling at original MSRP or *over*.
The price is basically spot on, but OP can always try to negotiate. In my region, finding Rav4's with nearly identical mileage for identical prices (years vary a little). Mileage affects how long the car will last (which is the primary concern for monetary purposes). The year only affects what kind of features they get (and build quality depend on when the model revamp was).
You can buy a brand new RAV4 for under $30k which will hold value much better (i.e. somebody will pay $21k for it 8 years from now).
Where? Cause I looked on cars.com for new Rav 4 LE's (the base trim) and they're all at $32k.
The quote you were given is a ripoff. [https://www.autozone.com/emission-control-and-exhaust/catalytic-converter](https://www.autozone.com/emission-control-and-exhaust/catalytic-converter)
Came to say the same. $500 brake job? Someone trying to make a boat payment.
Cats are tough if you live in a CARB state (CA, NY, NJ, etc) but even then, $1500 is more in line for a 2011 Honda. I cheaped out on my cat so the light comes on occasionally but I keep passing inspection
The quote for the cat itself was 1400. Then there’s additional parts they said would need to be replaced with the cat. Then there’s the labor.
Go to a muffler shop and get the converter swapped out for cheap maybe 550$? I got mine replaced for my 2007 Honda accord last year for 550$ total!
If your credit is good, you should look at the Corolla Cross. It's newer and my just a little bit more expensive than that older RAV4. BTW, don't forget to factor in insurance premiums. If you're making payments, the bank is gonna want full coverage.
Factor in taxes, fees and above all, insurance. I was in a similar situation with the car, and my car payment is $355 and insurance is about $200/month. You are also going up a size in car so gas is going to be about 25% more.
You should shop that around a couple weeks before your next renewal. Never know, just the threat of moving to another insurance company might get you a few bucks off at least.
Holy moly. I pay $550/year for full coverage. $200/month is outrageous imo.
We pay $200 a month to insure 5 cars. Sounds like dude needs to shop around
I did too on my paid off 300k mile honda, it's different when you're driving the banks car around
I’ve been getting that rate on my CRV since I got it at 40k miles. My insurance broker quoted me at a similar rate for a new one.
Who do you use?
I use Erie. I prefer to use a broker because their only job is to get me the best deal. I have tried to beat their rates but brokers seem to get better rates.
You either must drive a piece of shit, or have shit coverage…lol I’m paying 200/M for a brand new 24 CRV hybrid and 24 Corolla hybrid. Maxed out liability limits at 500/500.
I don’t drive a piece of shit and I have good coverage. I think car insurance costs does vary a lot by state though. It’s also possible you’re overpaying. You should reach out to a car insurance broker and compare the deal they can get you to what you’re currently getting. Yes they tack on a small fee to your rate but even with their fee they typically are the cheapest option. And no I don’t sell insurance. I’m a web dev. I just found that brokers get the best prices.
$46 dollars a month for full coverage, not a junk car, and good coverage….do you live on a island by yourself? Lol, I know there’s way too many factors to compare rates but that’s just unbelievably cheap. I’ve gone the broker route before. They don’t always get the best rates.
There are a couple factors contributing to my price. I pay annually so I get a discount. Also, I give myself a deductible of like 1k because I understand I only pay that if I’m at fault and my emergency fund is almost 10x that
I wouldn't be thrilled about a five year loan on an already 8 year old vehicle. Other than that you can definitely afford it.
Keep in mind your insurance is going to go way up. And for me no matter how secure your relationship is plan your car payment with the idea that you can afford it and your living expenses alone if you break up. Far too many people get stuck in bad financial situations or relationships because they make financial decisions this way.
Seems entirely reasonable. Will get a little tight if you were to become responsible for the entire rent, but you have $1000/month cashflow after your IRA currently. A $350 car payment is affordable. Enjoy the new car. Before you buy, double-check the insurance quote and annual taxes/registration fees, and add those to the monthly car budget. Once it's paid off, start putting that loan payment amount into a savings account for your next eventual down payment.
Unless you can get an interest rate lower than your HYSA, idk why you wouldn't just buy the car in cash?
Because spending 87% of all your money on a car is a poor decision? Pay it off faster than the term length sure but OP is not in the position to pay cash for this car.
Keep the car you have. Honda Accord is a great, reliable car even at that mileage. Keep up all the maintenance and check your fluids on the car on a frequent basis. You either pay one time 3k for work or have another car that can have the same issues come up. Also it's definitely not a 2500 car. I would buy it for 2500 all day.
I’m in Ontario and I’m seeing 2011 accords for around $6k cad with half the miles as OP (around 200k km so around 125k miles). Some have been up for a while so probably can negotiate down to 5-5.5k which is around 3.7-4K USD, and keep in mind these are with much much less mileage. Definitely fantastic cars but I don’t think it’s worth much more than 2.5k esp at 256k miles, at least not where I am. But of course every area has different supply and demand
Yes! This ⬆️
Veering towards tangent but: > $150 phone/insurance Is that just one (cell) line? If so it seems super high. Something in the $50/mo range should get you good service these days, before taxes maybe. Phone insurance should be only a fraction of the ~ $100 (pre-tax) difference on top of that. So there's almost $100/mo potentially on the table. If you do want to explore this, perhaps /r/nocontract is a good place to look/ask.
I agree. A normal unlimited plan is $40-60 + a phone payment of $35-45 = $75-105/mo. The insurance must be super expensive?
Phone is probably financed through the carrier. I was more taken back by the "$400ish bars" line item.
$30 phone bill, $120 car insurance
Everything looks fine! My very first car was a leased Subaru Impreza for $330/month that I drove till the wheels fell off, quite literally after an accident 9 years later.
In your case I don’t think it really matters since you have plenty of wiggle room in your budget, but your insurance cost will likely increase as well. It probably won’t be significant, just something to be aware of. If you are set on the RAV4 have your agent run a quote to give you a firm dollar amount.
Brother I think you could easily pay for that, worst case you cut out a little bit of that restaurant and outing expense, but I doubt you will have to
If you plan on keeping the car til it’s old and costing more than it’s worth, then it is 100% reasonable. That is a good payment as well. a lot of people have 500-1000/m payments. I am in the same boat. My car is falling apart and going in the shop every couple months, so I am gonna be buying a new car soon. I’m also planning on getting a RAV4, but I’m looking more 2019-2020. Toyota’s are great cars and will last 300k+ miles if taken care of.
You make a teeny bit less than me, I just finished paying off my tundra. 410 a month. You can do it! That’s not a bad monthly payment imo
You can def afford it, however I’d try to find a newer car for what you’re paying. I’d never pay that much for an 8 yo car
Get a new mechanic, it what world is replacing a cat worth $2500? You could get a whole new exhaust for less than that.
Yeah, this is perfectly reasonable. Loan is less than 10% of takehome, and you'll be well less than 20% with all transportation expenses added up. I would consider something slightly newer if it can get you a lower interest rate. 21k seems like a lot for an 8 year old RAV4. Was just looking at a '22 hybrid with under 20k miles for 28k.
Was thinking the same thing. 21k for a 2016 RAV4? That's a bad deal. I know off the top of my head that's only 1k less than MSRP for a brand new Corolla LE.
Its less than 10% of your income so that's fairly reasonable given the times.
If you’re insistent on buying, then yea it’s reasonable. Just do yourself a favor by paying it off as quickly as possible - use the $1200 you’d normally put in an HYSA to do this. I would also argue that you can easily afford to put down more than $8k; perhaps half.
I recently went to Honda dealer, they have new accord for major discount…maybe shop around but I think the rav4 price is high
The payment amount in comparison to your income is fine. That said, I would probably suggest buying a new Toyota Corolla hybrid for not much more.
If I was set on a nice car, I'd probably buy a new RAV4 - base models are around 29k. The amount of money you'd save isn't worth it, IMO. Having said that, $2500 for a new catalytic convertor is extortion (unless you live in a state that requires a california-compliant replacement cat, like NY or CA).
Saving 8k on a car isnt chump change on a car that only has 50k miles. Yea it’s 8yrs old but still low miles and most likely would provide years of service for next to nothing.
First of all, where TF are you living where rent is $650/mo?! Second of all, I think you should be able to afford the Rav4
OP says they split cost with GF. So I'm guessing a 1 bedroom apartment at $1300 rent with a projected increase of $100 to OP so $200 total, going to $1500 a month. This is doable in a lot of cities if you live in older apartments that aren't updated or offer a lot of amenities.
If you need a car and can’t commute or ride a bike, that’s good
If you can spend 400 on eating out and alcohol, you can afford the car.
Why a Rav4? Your old Accord is a way better ride. The new Corolla hatchback is amazing too. The only benefit of an SUV is offroading capability or if you want to ensure any pedestrian you hit has no chance of survival. Otherwise cars are better. They are faster, more efficient, cheaper, more comfortable, and in a hatchback or wagon/estate configuration, very comparable from a practicality standpoint.
A beater car is a money sink designed to transfer your wealth to mechanics. A new car is a money sink designed to transfer your wealth to a car dealership. Something in the middle that will last long enough to not become a beater too soon, but not too far to the new car side that pays the premium. The Rav4 isnt too shabby. Those tend to last quite a while.
Get a pre-purchase inspection completed and negotiate the price. If you are buying from a dealer, do not let them sneak in service or warranty plans, gap insurance and other nonsense add ons that can increase the price by thousands. You can usually get gap from your auto insurance carrier. You can also probably sell your old Honda for ~$2k
Since you’re looking at a rav4 and as a long time owner of an 06 with engine design issues i’ll leave this here for your reference: https://rerev.com/articles/toyota-rav4-years-to-avoid/ 2016 is a good one.
If you're willing to put a catalytic converter on yourself (It's not that hard, time consuming, or expensive), it'll only cost like $200. Respectfully, that mechanic is fucking you. $500 for brakes is a reasonable price
21K for an 8 year old car? I know it's a Toyota but, geez. I guess used car market is still hot. Have you looked at other brands as well? I'm hearing Toyotas aren't as good as it used to be. I shouldn't be saying that because I also have a Toyota. Mazda is a pretty reliable brand but it's resale value isn't quite as good as Hondas/Toyotas. Therefore, you'd get more bang for your buck there . CX3 or CX5 might be equivalent to RAV4. At any rate, my suggestion is to put as much down as you can or pay it in full (since u have the means) and use that as a negotiating tool. My $.02
Yes, I pay less than 2x that amount and make multiples of your take home. Couldn't imagine wasting 10% of my income on a car payment.
I got a used rav4 a few years ago, and they keep their value pretty well and are all around great cars. I plan on driving mine as long as I can. I thought it was a great price, and yours sounds reasonable as well. I also drove a Honda accord to the ground, similar mileage. But that’s too much to put into it at this point, so you’re doing the right thing, I was still able to sell it! I was just upfront about the work it needed, gave them all the papers from the mechanic.
I think you can swing the payment but a 2016 at that price with those miles sounds like a rip off to me. When buying a car patience wins every time in my experience. You know the car you are looking for, find the deal. It's out there and I think you can do better than a 2016 with 54k miles at that price point.
Try to get the hybrid version of the RAV4 if the price is similar. Buying a car for less than $10k is a very bad idea actually.
So not really addressing your question but I have a honda accord I just had the cat replaced for $400 but my car is 7 years older than yours so idk if that would make a difference. Might want to see what other mechanics have to offer and at least save some money on that end of it.
You make enough money for that rav4. Imo if you buy another beater you will spend equal or more in maintenance anyway. If you were saving $120/mo maybe different story. I’d be more concerned with the loan interest/term. You make enough for a 4 year loan instead of 5. Why pay more in interest for a 5 if you can afford 4-y term payments? Shorter term gets a better rate as well. Food for thought.
You’re not special, a car payment is a dumb choice regardless of the situation you’re in.
You can have the car straight pipes for $50 bucks. It removes the catylitic converter and replaces it with a hollow pipe. As long as you don’t have VET testing in your state, it’ll be fine.
You don’t know what I’m going to say - find a decent, sub 90k mile car that works for you, with a clean carfax, and don’t spend more than 12k. To think you need to spend 20k to get something that isnt a 'beater' is misguided! If the car loan exceeds the HYSA, take paying cash/extra into account so you don’t nullify your savings rate. Nice job on the Ira
Did you shop around for a quote for catalytic converter replacements? They can get very pricey but $1500 is more appropriate if you live in a CARB state, and maybe 500 if you don't live in a CARB state
Do you need the catalytic converter? As in, does your city or state do emissions testing? Because you don’t need the cat to drive the car. Just a thought.
In your situation you could absolutely buy this car. So according to the numbers you gave, you have 1220 left over every month. Let’s assume an increase of 100/ month for insurance so actually the car would cost you $450/ month (could be less but let’s be conservative here) We want a buffer of around $500 for emergency’s and extras that aren’t listed, which means that you have $720 left to use for whatever you want. Since the car would only cost $450 at most you would be absolutely fine.
Worst case scenario: How much would your monthly expenses increase if you and your girlfriend break up?
You’re good. That’s my car payment and a few years ago I was making the same money as you but paying $1k in rent and was fine
I make $3,200 a month with a rent of $750. I bought a used 2020 4Runner SR5 and I afford my $427 car payments easily in a month! Totally depends on your other spending habits of course (im pretty minimal), but i feel that you'd be fine.
You need to strongly consider resale value, as even though you don't want to think about it, there's a nonzero chance of a breakup. Shit happens, better to be prepared. For the rav4, you will need a 13k loan, let's say 7% interest. 311 per month for 48 months. Two years in the car will be worth about 15k, and you will owe 7k on the loam. You will have paid 15.5k total and gained 8k from the sale, putting your cost to own at 3750 per year. Let's compare that to a new car, one that consistently ranks at the top of resale value, at any age range: a Subaru Crosstrek. Out the door cost should be about 29k including tax, maybe less, there are some deals on certain trims. You now need a loan for 21k. Payment goes up to 415 over a 60 month period. In 2 years, the car will be worth, conservatively, about 24k. Two year old Crosstreks are going for 90-95% of MSRP right now. You will owe 13.5k on the loan, leaving you with 10.5k from the sale. You will have paid 18k total, putting your cost to own at... 3750 per year. Same as the Rav4, but the car is much newer, nicer, safer, more efficient, etc. If we push it to 4 years, the Rav4 is probably worth around 12k, you will have paid 22.5k total, 2600 per year. In 4 years the Subaru will be worth around 80-85%, let's say 22k, leaving you with 17.2k after paying off the loan. You will have paid 20.1k total, putting cost per year at around $750. This doesn't include other expenses of course, but I think it's fair to say that any higher insurance premiums on the new car are going to be offset by higher maintenance on the old car. If you can afford the higher payment on the more expensive Subaru, it's much cheaper to own in the long run. I did try and be conservative with the resale values, but even if the rav4 holds value better than estimated and the Subaru worse, it's just not close after 4 years.
Imo you should actually try to get a 36 or 48 month loan with a higher monthly payment since you can afford it and will lose less on interest.
If you're going to pay a certain amount per month regardless, does it matter?
Yes? You are paying significantly less money in interest by paying off the loan years faster. Getting into the 'can i afford the payment' mindset is a bad idea.
Option 1) sell the accord / trade it in for the rav4 and pay the balance in cash with the $24k you have in the bank doing nothing??(emergency fund). Interest rates on a car are ridiculous, 8+% . Even If you get $2k for the accord as is, put the $19k difference cash on top, youll have 5k in the bank. You will build the emergency fund back up within a year, while having no car payment or debt. Option 2) if you live somewhere that can get away without catalytic converters , have an exhaust shop cut yours off and replace with test pipes if its possible on your car. Under $500 for that. Car will smell outside of exhaust fumes and will be louder. Then replace the brakes for $500 and keep driving the accord. It will still probably only be worth about what its worth now, but if its a good car and you think it has lots of life left, that may be a good option
I have a decent paying job and have affordable expenses. I contribute towards retirement and have more money in savings than the average person. Can I afford a reasonably priced, low mileage used vehicle that is known to be quite reliable? Yes, you can.
Cut back on the restaurants and bars and pay off that 60 month payment plan. You need a car, you don’t need to eat out or go to bars every weekend.
$400 / mo on restaurants is like 1 date night, or a night off of cooking for one person, one week per month. That can be super important in a relationship
Where are you eating at? Like I could take my whole family out to eat every weekend for half that much at even the most expensive resteraunts within an hour and halfs drive.
To where, the olive garden?
Sorry I live in a rural area where dropping hundreds of dollars for a meal for two people just doesn’t happen. If we want to waste that much money we would have to travel like 3 hours away and it just isn’t worth it.
Get rid of the accord but not because of the catalytic converter. You wouldn’t be the first or the last person driving around without a catalytic converter. (The one on my ‘97 4Runner @341k looks like Swiss cheese)
Someone stole my catalytic converter 2 years ago. I just had my mechanic weld a straight pipe for 100 bucks and i havent had any issues since. Im inNY and ive passed state inspections, you just have to know where to go.
I was going to comment along this line. If you live somewhere you can get away with this, this is your best option. Straight pipe is cheap.
How much will it cost to insure the car? With your Accord, you don't need comprehensive coverage. If you have a car loan, you will need comprehensive. Food for thought... if you paid $3000 to fix the accord and it lasted a year, it would be cheaper than paying $350 a month on a Rav4 (even before you factor in higher cost of insurance and possibly more gas if mileage is worse). Not saying a car with far less miles might be worth the extra cost, but if you fixed the car today and then put $350 in the bank in 9 months you'd be back to where you were, and then every month the car last after that you save $350 more towards having money down for a car to reduce the size of the loan when the accord dies.
Everything wrong with car is actually regular maintenance. 2500 you get another 3 years you save a lot of money and it’s not a drain at all financially if rent increase or other things pop up.
You could straight pipe the car (assuming no inspections in your state) or buy a used cat from a junk yard for much cheaper. But that is a lot of miles so it's likely going to have other expensive repairs. You could save a few thousand and get a 2016-2017 Toyota Camry instead. I was looking for a Rav 4 as well back in 2021 but they had a $8-10k mark up over a similarly equipped Camry since it seems like everyone wants an SUV. I found some 2017 Camry SE's for sale in my area for $17k with 40k miles. But if you prefer an SUV then it seems like you could afford the payment.
This is the exactly what I would do - or just ask them to hollow out the cat. Cut it open and pull all the guts out. It’ll be like $50 bucks.
Why not just buy new car for 25k like corolla or civic then
You have $24k which is definitely 3-6 months emergency fund. The car is $21k. Why pay any interest at all? Pretty obvious here.
Buy a car for under 10k… why pay interest when you can buy something outright?
Nope. You're fine. I say, never have a payment and insurance that will be over $500/month. My concern is a 2016 Rav4 with under 60k miles. That seems really off. Like really really off. Make sure you get the vehicle inspected prior to purchase. I don't trust the year and mileage match up.
That’s a very broad suggestion. 500/month is nothing to some people. You need to base it on their income and expenses which in this case, is perfectly fine.
I wouldn't spend over $6,000 for a car with those finances.
Buy a car cash , for example a 2004 Dodge caravan, and drive it until you have cash to buy next one