NorseWagon

What if it does not...?

Xander Crews

A LOT of people you see driving around town in $30k+ vehicles are in debt up to their eyeballs and upside down in their home that's got an adjustable rate mortgage.

I bought a similarly priced vehicle when I was your age (~$500/month payment on ~$2,200/month take-home). I can tell you that there's a difference between what you can pay for and what you can afford. You don't want to find yourself in a situation where you're living/working to make a car payment. It's not much fun.

x2.

Sportstick

Charlie,

After raising two kids, allow me to offer some firm but well-intended advice. Forget the car for now. Get a Civic or such. Even though you don't "have to", make a contribution to the ongoing costs of your home. Buy some groceries, offer some rent....do something to carry your own weight and begin to take on some responsibilities of an adult. Then, save the rest for two purposes....1) to get out on your own and truly have a chance to grow up, and 2) for your future. You will then also have the enjoyable experience of surprising your parents as you turn out to be more responsible and less self-indulgent than they are requiring.

Best wishes!

pwidjaja

Forget where you live, the answer is NO. My rule of thumb, if you can't pay them in cash, it is 'beyond' affordable. I don't say a lease is bad, but only when you intend to reduce your company income taxes.

Xander Crews

I'm curious how you think that you'd be living on your own anytime in the near future with a $500+ car payment, $100+ gas, $100+ insurance, etc. All of this on a ~$30k/year income? Once you move out...you have to factor in rent, renters insurance, utilities, health insurance, food, etc.

Get the payments a little lower? Are you planning on refinancing it in two years?

If you can keep a car payment under 10% of your take-home pay...I think that's pretty reasonable.

For the OP...taking on a $500+/month car payment would essentially mean that he'd be living at home for the next five years (unless his income significantly increases or he gets a roommate and moves out). You don't buy a car based on what you MIGHT be earning in 2-3 years...you buy one based on what you can afford given your current income.

C300Kid

I'm guessing he's a student working part time..not someone already started with their life and career. Chances are he'll find himself in a very different point in life a few years down the road.

And I would say a 22 year old that makes $2,400 a month and has zero expenses could probably afford a C300.

OP..do you have any savings right now? I'd imagine you're saving a ton if you have no expenses at all. If you do, I'd say the C300 wouldn't be a financial burden. If you don't, I'd probably re-evaluate the situation.

Xander Crews

If that's the case, he should face reality. If he's lucky, he'll land a job in the $35-50k/year range when he graduates (unless he's an engineer or other higher paying field). Instead of focusing on how to maximize his 401k contribution, he's going to be focused on how he's going to pay for his own place and a big car payment. This will likely require a roommate. I don't know about you...but when I graduated from college, I had zero interest in having a roommate.

Could he afford it while living with mommy? Perhaps. Could he afford it once he gets out on his own in two years? Most likely...no.

envyxc350

I bought my c350 at 17 making $1000 a month and still have it... greatest joy in my life. Was a lil tough for a while like maintenance and tires/rims but I dealt with it and continue to mod and pay for it making $2000 a month.

And saving for a 401k and all that at 22 is a lil ridiculous.. have a lil fun and enjoy life before marriage and kids tie you down and you will be forced to drive a SUV -__-

A lot of ppl don't get their car they want and get married, kids, or whatever and are never given another chance to get a nice car.

Now I wouldn't go with the c300 unless it was a lease, I'd go for the c350 fully loaded or look in the 335i witch is more fun and very easy to mod. Minimum $600 payments for a few years is nothing in the long run. As long as your having fun and being smart!

morph860

Sounds like you might be better off with a used C Class to start. You can pick up a 2007 for less than $20k.

C300Sport

That has got to be one of the most idiotic statements I have read in a long time. A dollar saved at 22 is worth ten times a dollar saved at 52...maybe a little balance of course but blowing off long term savings when you are young is most likely to end up biting you in the a$$ some day.

TaxEsq

when I was 16 my first car was the family's toyota camry - when I was 20 I got a honda accord - when I was 30 I got a mercedes. Baby steps my man, it will all come to you.

envyxc350

I agree with a saving account like 10% of your check but to save up for retirement at 22 is a lil overkill.. Especially if your being smart and get a great career like engineering.

amdeutsch

This thread is getting hilarious. More youn'ums debating the merits of money and finance. Not to worry. Maybe another Obama type will bail you out in the future and make the ones who made different choices pay for it once again.

C300Sport

The problem with a job like engineering, or any other high paying job, is that almost everyone learns to spend what they make...just seems to be human nature. And of course retirement is the last time you want to finally start living small...
Anyhow, I agree that I wouldn't stay home every night of the week trying to load up my retirement account, but I would make it one of the must do, learn to live with habits at 10%-20% of income...or more if you are raking in the $$$
Besides being car and/or house poor really sucks...

CrAZyVeGAsBoY

can u affored it, yes, will you get raped with payments and insurance? Hell yes, wait on it kid, its a great car but it aint worth killing yourself to have.

AMGfan

You don't have to necessarily think of it as saving for retirement...think about it...if he saved as a rule 10% of his current salary and put it into something that compounds interest at minimum conservative 4% that $60 a week will balloon to almost $36000 (with over $7100 in interest earned) in 10 years...20 years = $89191.30...30 years = $167985.30...at 65 = $329509.09

The above numbers don't even take into account that his salary will probably increase so his savings would be more. I just wish I did something like that when I was 22.

lkevinl

+1 to that... or $1.

When you're trying to make your Mercedes payments with your Social Security check, you'll remember this statement and kick yourself in the A$$. It's the people who didn't start early that regret it. If you can learn from someone else's 20/20 hindsight, you should learn it.

zankok

u guys r so lucky that mercedes r so cheap in the states you could own them at such an early age...
or maybe Asia is just **** ... people who gets a normal salary usually won't get a chance to buy a merc.. hell, in places like HK and big China city people can't even afford a home with their entire life of earning, but then.. when you see people who drives mercedes you can tell they are genuinely well off... less case of rich parent school kid driving merc around the campus kinda scene
Enough of my rant, car is a depreciating asset while home is an investment at least... but seeing you have the chance to own one, just do it... be smart and try to open up opportunity to greater income and get a home afterwards

soldier2304

I say get the car, the reason most people here actually tell you NOT to buy it is simply because they probably had to drive an old beater at that age, and THATS not a bad thing. However, I think for your age your making a decent amount of money to get ANY car you like and be able to pay for it comfortably. Life is too short and you don't know if your going to be alive tomorrow. I do tell you a Mercedes is not an Accord and everything will be much more expensive including aftermarket parts.

Sportstick

No, its because the priorities are inverted. The first thing he should be doing now that he has some income is not continue to take a free ride for food and rent at home, and make a contribution to his own cost of existence. Once that is handled, a responsible adult would start to plan for their own future, so they improve their chances of not being someone else's burden years from now. Once some fundamental responsibilities are looked after, then it's time to play.

If he was self sufficient, and had leftover funds, sure, get a Benz.....heck, get two. But, stand on your own two feet first.

Xander Crews

I was speaking from experience. Coming from someone that had a ~$500 car payment and ~$175/month for insurance at age 22...it's not a bright idea on the average kids salary (which he clearly has).

The only reason I could swing it was that I lived in the barracks and had zero expenses, other than the car (i.e. this kids current living arrangement). So yes...I carried that car note both while in his living situation AND while living on my own. The only reason I carried it once I moved out of the barracks was that I had roommates. Do the math. If you factor in the cost for an average apartment in your area (plus utilities, food, etc.), the car, plus your insurance...you'll be living on ramen noodles to get by.

Hell...go get the car. Come back in three years when you're still living with mommy and tell us how that new car purchase worked out for you. If you make $30k per year, you're stupid for having a $30k+ car note. So yes...I'm saying that what I did (and he's considering) is stupid. And yes...my parents thought that me having a new car instead of a used beater would be a great idea.

Edit: If you want to learn from experience rather than the advice of those that have grown up and been where you're considering to go...go for it. While a couple of my smart friends were buying their first homes at age 24...I was paying a car payment. I'm just now buying my first house (age 28). While that's not bad, I could have done so earlier if I'd had my head on straight.

pwidjaja

It is reasonable, but if you can own it (pay in cash) rather than borrow (lease), it would have been considered more affordable.

black204

Lots of valid points on here. At the end of the day it's your choice and you should do what feels comfortable. The logical side of me agrees with the crowd saying you should keep your money and save it, with the car essentially half of your pay check will go towards the car (payment, insurace, gas, etc). After I graduated I lived at home for a year and could have bought (would have had to finance all of it) a nice car but I didn't want to be that 'kid' that was known for having the nice car but living at home. I waited a bit, saved my money, generously saved for when I'm 'old', I'm 25, and when I moved out I ran the numbers and saw that I was still able to afford the car without really having to worry about it financially. It's a bit crazy what a few years can do for you so I say keep working hard and wait a few years.

Someone once told me to buy the most expensive house you can afford (afford being the key word there) and the least expensive car you can stomach. Unfortunately I, like most people like nice cars, but you all get the point there.

lithium332

Get a used C300 for ~$20k. It's still probably not the best idea financially, but sometimes life is about having fun too.

Junkmonkey

Good old economics. Let me add a few points:

1a) It's okay to appeal to others for help!

1b) Pretend you have the car already and see how you feel putting payment + gas + insurance + miscellaneous + annual repairs / maintenance away each month. If you can do it for a few months and are comfortable, go for it.

2) Investing as in the above cases will result in a nominal return of the numbers stated above. But how much is $89k in 20 years worth today?

3) Inflation will cause the present value of $89k in 20 years to have much less buying power than it does today. In fact, this investment for 20 years (i.e. $60 / day, 4% compounded annualy, accrued monthly) will have a Net Present Value (NPV) of around $5k. So the investment is worth about $5k.

4) Suppose you have an annual salary of $30k, inflation is 3% annualy, you take home 65% of your weekly paycheck, you put 10% of your take home into a CD earning 4% compounded annualy and accrued monthly. Also assume your investments are made at the end of each month.

That is, at the end of month 1 you get $2500 before taxes and $1625 after. You put 10% ($162.50) into a CD. At the end of month 2, you will earn 0.33% (4% / 12, simple interest) of $162.50, invest another $162.50 and end with around $326. You repeat this process.

One year later you get a raise which keeps your salary in line with inflation. Your investment of 10% now is a little more ($167 instead of $163). You continue this for 20 years. Your ending balance is around $77k. The present value of $77k is around $42k. The present value of your investment stream is around $38k. Your NPV is around $4k.

What am I getting at? $60-ish / week is not worth hundreds of thousands of dollars in a bunch of years. Only nominally.

Live how you want.