Keep Track of These 3 Numbers Before Buying a Car (2025)

bro chill on ads, after 5mins i got 6 of tem wth

Imagine paying $667/month for a Camry

But I want to buy my dream car! M3 :(

Another way of doing this is if you really want a nicer car because you are an enthusiast car lover (who specifically wants to own a new car for a minimum of 12-14 years) is by following the 50% needs 30% savings/excessive debt deposits and 20% wants rule. The minimum monthly payment on top of new insurance and gas with your other needs should not surpass 50%, and you can reduce the wants to 15-10% if you want to bump the needs to 55 or 60%. This is because your nice car is classified as both need and a want, but once you have the payments you NEED to pay off the loan. And you must be eligible for the best finance rates like a sub 4% or 3% APR fixed. You must also buy the car within the 20% down, 4 year maximum rule of car buying. This is because you want your investments and savings to outpace your car's interest rate, which is why savings and investings are 30% of your take home and unchanging, and you don't want to be paying interest forever.

Make sure you have low debt or no debt and a high credit score, and at minimum 1000 dollars in emergency before attempting and you should be fine getting a car you think is just out of reach by the Salary rule. If you do this you want to make sure other debts can be finished so this interest rate on the car is the only one you need to worry about your savings out pacing it. It's a lot of rules but for some people it's an option.

I want a tesla but the price is 200k which is like half the price of house that's craaaazy

Mmmm its gonna be 3k a month for 5 years ☺️ with 10% down payment

Fuck according to the 35% rule i need to make 400k a year to afford a civic its 135k here and the median salary is 3k a month which is like 36k a year I'm not getting any car now 😂😂

Great video! But there is always one thing I always struggle to understand; Monthly payment. My general take is that if you can't save enough to buy the car, then you probably can't afford it. I could be wrong but I'd like to have thoughts on that.

So is the 10% on transportation including tolls, gas and vehicle maintenance?

Unpopular opinion: I buy a car without monthly payment. I pay it all at once.

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Wish to be applicable into different countries, but no way :|

Car guys have left the chat 😂

Or, take this from a car guy’s perspective: always pay full in cash and buy the cheapest 12+ years old, not rusty car that was sold in massive numbers when new. In this way you get cheap parts and most mechanics have knowledge of your car. My first car in 2019 was a 2000 Corolla for USD1300, sold at USD 1550. COVID times, weird times. Second car in 2020 was a 2005 Mk5 Golf Gti for USD 3600. Admittedly I did spend 50% more to fix everything up but it then means I get new parts for everything I fixed. Due to government scheme the scrap value at the end was almost USD2900 in Q1 2024. Third car in Q1 2024 is a 2005 E46 320i for USD 2300. Again, money saved goes to getting new replaceable items like lower control arms and suspensions. Enjoying every bit off it now. All these happened in Hong Kong.

I come from Singapore. A Honda Civic cost USD 130k. No kidding

This chat is filled with used car salesman telling people to pay cash.

Tucson
32.000
430

Yeah I'd never do a car loan because of said reasons.

2018 Honda CRV Touring $35K cash out the door. 2022 Honda Odyssey Touring $44K OTD. Two pink slips. Saving for a Miata as we speak.

Good advices - BUT it will also be very important moneywise to figure out what type of car you need, do you really need the big car because you need that space once a year?

So watching this i would be curious to know what the rule would be for active military personnel. As your housing, health insurance, and food are all taken care of for you. (Assuming you are living on post or in the barracks.) Would you still only be allowed 35%?

The 25% doesn't work outside of Metropolitan countries unfortunately. Or we'd all be buying 10year old cars in developing countries

Tough to keep below 25% if you live in Singapore and a Honda CRV 1.5L costs US$190,000!

That will mean an annual salary of at least US$800,000

I will say 10% is probably a safer choice.

Hey Humphrey, great video! So when you say "monthly car payment" using the 10% rule; Does that mean the loan repayment? So for instance on a $6k monthly gross salary, a $600 a month loan repayment for 60 months is still "within" budget? Thanks!

Lol this is unrealistic. I have friends who owe newer cars and they make less than 80k plus they pay around 700-800 a month and they’re comfortable

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Always love Humphrey! Good info 👍

What people need to do bed committing to buying a car, is to do a monthly budget, see how a car payment fits in. Things change so does the budget. Keep an eye on the spending - over committing on any major expenses is asking for trouble.

Too many rules or numbers to remember.

What if you’re retired and have enough discretionary income to buy a car outright without it affecting you financially. Would that still be ok? Like I’d still have enough to pay bills, go on trips, eat out whenever. I figured I worked so long that I’d like to enjoy a dream car once in my life. I’ve never spent more than 25k on any car I’ve ever owned. 😞

I ride a bicycle 🤑

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Just pay cash, have less cash buy lesser car, have more cash still buy a lesser car

Try your hardest to get to the point where you don't have to finance things that depreciate in value.