What would you do living in Mountain Home, ID?

[Rich]

This thread is about what you would do with your money, in this hypothetical situation.  Only one preference matters, I'm interested to see how far the spectrum of thread responses go.  I've added a section for Idaho specific choices

So here's the deal:
After tax income is $45k/yr

Screw a house

Currently there is $56,000 $62,000 $70,000 (I was able to save more than I thought) chilling out in your bank (available to spend whenever)

I will put this one preference out there...  driving is the only hobby that requires money, so please don't factor in huge screen TVs, game systems, computers, guns, motorcycles, cell phones, etc...

College is paid for 100%, so that doesn't need to be factored into costs

You should factor in how much of the above you want to save (if you want to save any of it)

Also factor in insurance costs ( higher value cars will cost more to insure, and more cars will cost more to insure)

So, will you finance?  Buy a car outright?  Buy used or new?  Buy 1 or more cars?  More importantly, what would you get?  

Thanks in advance for responses

No location specified:
TBR:  1995-1999 BMW M3
Soup DeVille - 2008 Subaru Impreza/1984-1996 Chevrolet Corvette
Vinsanity - 2004 Acura TL
2o6 - 2010 Nissan Cube/1999-2005 Toyota MR2
R-inge - 2002 Subaru WRX/2014 Subaru WRX STI
NomisR - 2002-2006 Acura RSX-S/2005 Lotus Elise
MX793 - 2004 Mazda 3/2009 Mazda Miata
The Pirate - 2004 Toyota Tacoma I4 4x4/1982-1990 3 Series
Payman - 1997-2004 Porsche Boxster
The Teuton  - 2006 Honda S2000
MrH - 2004-2007 Mazda RX-8
Dazzleman - Audi A4
J86 - 1999-2005 Saab 9-5 Wagon
GoCougs - 2006-2007 Honda Civic
Hemi666 - 2005 Ford Mustang GT
SportyAccordy - 1995-1999 BMW M3
NaCar - 1992-2000 Dodge Viper
Raza - 2002-2004 Ford Focus SVT 3dr/2002 Honda S2000
CALL_911 - 2001 BMW 325i
hotrodalex - 1986-1992 BMW M3

Living in Idaho:

[TBR]

I would buy a decent used car outright (probably an E36 M3 or, if I drove a lot, a Protege5).

Just out of curiosity, how long are you typically stationed in one place? If it isn't for more than 2-3 years it probably wouldn't be worth it to buy a house.

[Soup DeVille]

I would buy two cars. (ignoring the mature opitions of investing or other boring shit like that)

The first one would be a sensible, high MPG daily driver, new or one to two years old.

The second would be a weekend/summer car.

Something like a Subaru Impreza/ C4 Corvette combo would be nice

[Rich]

I would buy a decent used car outright (probably an E46 M3).

Just out of curiosity, how long are you typically stationed in one place? If it isn't for more than 2-3 years it probably wouldn't be worth it to buy a house.

Who said this is about me? 


about 4 years

[TBR]

Who said this is about me? 


about 4 years

Just long enough that it might be worth it, though I suppose a lot of it depends on the real estate market in your particular location. Either way, I would focus on either buying a house and paying extra on the mortgage  (I personally wouldn't want to be chained to a mortgage for 15+ years)  or saving to buy a house/other investments. With that in mind, I meant an E36 M3 rather than the E46. Unless the car will be driven a lot (15k+ per year) in which case I would get something newer with lower maintenance costs and better gas mileage.

[S204STi]

Assuming I already own a serviceable car, knowing what I do now (which still isn't much), I would create a sinking fund and may "payments" to it in order to save up and pay cash for the car I desire, meanwhile putting half of my savings is a historically good-performing mutual fund (now's a good time to buy into one, it would seem) and keeping the rest in a money market account for a rainy day.  Alternately, if my current car was getting a bit old I would take some of the savings and buy a good used car on the cheap, one around 5 years old, and then create a sinking fund to save for a better one.

Basically, not what I did.

[Eye of the Tiger]

What the hell is this no motorcycle crap?

[S204STi]

What the hell is this no motorcycle crap?

Oh yeah, thanks for reminding me.  I would definitely get a motorcycle, but I left that out because of his criteria in the OP.

[Rich]

Assuming I already own a serviceable car, knowing what I do now (which still isn't much), I would create a sinking fund and may "payments" to it in order to save up and pay cash for the car I desire,

You have 56,000 in the bank, how much is the car you desire?

meanwhile putting half of my savings is a historically good-performing mutual fund (now's a good time to buy into one, it would seem) and keeping the rest in a money market account for a rainy day. 

How much would you put into the sinking fund, and how much would you put into the mutual fund/ moneymarket?

Alternately, if my current car was getting a bit old I would take some of the savings and buy a good used car on the cheap,

Which used car would you get?

[TBR]

You have 56,000 in the bank, how much is the car you desire? 

I certainly wouldn't spend more than $30k out of that account, assuming you don't have a separate emergency account that is.

[Vinsanity]

Heck, if I knew I would have to pack up and move again in 5 years, I wouldn't even think about buying a home. If this scenario took place in SoCal, I'd probably need some of that discretionary income to supplement the housing allowance just to rent a decent apartment.

And if I knew I was going to move again in 5 years or less, I'd give leasing a long and hard thought. BMW's have good residual values, but ridiculous down payments due at lease signing. VW sometimes has good zero-due-at-lease-signing deals with reasonable payments, but I don't know which VW I'd want to drive.

If leasing is out of the cards, I'd get a late model car that would be easy to sell after the payments are done. 2004 Acura TL, maybe.

[2o6]

It's all about what you want. Since you said you aren't going to be here that long, maybe Lease an Urban runabout and change over leases every year. Maybe a cheapie Miata or S2K, to modify and have fun with. Then when you move to a foreign new land, do the same thing over!

[Rich]

It's all about what you want. Since you said you aren't going to be here that long, maybe Lease an Urban runabout and change over leases every year. Maybe a cheapie Miata or S2K, to modify and have fun with. Then when you move to a foreign new land, do the same thing over!

I know what I want...

I want to know what everyone else wants. 

[2o6]

I'd go the two car route.


DD a small compact, subcompact like a Nissan Cube or Honda Civic or something similar

Weekend toy something along the lines of an MR2 Spyder or Porsche Boxter.

[NomisR]

I know what I want...

I want to know what everyone else wants. 

I'd go with what I'm doing right now.. or maybe a different car other than RSX-S

[TBR]

I'd go with what I'm doing right now.. or maybe a different car other than RSX-S

An Elise and a second car on $26k/year?

[Rich]

I'd go with what I'm doing right now.. or maybe a different car other than RSX-S

Sounds good, I'm not sure if 2,200 a month is enough to keep up with insurance,tires, maintenance on an Elise/RSX-S.  Or monthly payments (if the Elise is new)

[S204STi]

You have 56,000 in the bank, how much is the car you desire? 

35,000, STI.

How much would you put into the sinking fund, and how much would you put into the mutual fund/ moneymarket?

Sinking fund is a term from commercial building management, meaning that if you know you will need a roof in 10 years, and it will cost $XXX, you put aside enough every year to make sure you have that amount on hand in 10 years when you need that roof.  I was just applying it to cars.  If I want a car that is 35k, and I put 25k into a mutual fund and the rest into my emergency money market fund, that would mean that if I wanted the car in 5 years I would have to save 583.33 a month.  Kinda steap, but do-able if I already have my rent/living taken care of.  I could also use some of my savings, put less into an emergency fund, and save 25k over the next 5 years, 416 a month.  Either way, while my money sits in a money market account over the next few years it will be earning money in interest.  If I financed the car now I'd be losing money in interest, in a big way.

Which used car would you get?

I would see if I could find a sporty used car in the meantime, some 02 WRXs are getting cheap.  Or an RSX, or GTI, etc.  Either way, this is just what I would do.   

Looking at my situation in real life, assume that I have 8 years left on my car until it hits 150k mi, at which point I may consider selling it.  So, if I want to replace it with a theoretical 35k vehicle at that time I'd better get started saving 364 a month. As it is, I am reworking my budget but I think that without a second job I couldn't afford that right now without sacrificing food or heat, lol.

[NomisR]

Sounds good, I'm not sure if 2,200 a month is enough to keep up with insurance,tires, maintenance on an Elise/RSX-S.  Or monthly payments (if the Elise is new)

Get an Elise used, if you're lucky, you can find a good example of one for under 30k.  Tires are a killer though, if I go to a fast track, you can burn through tires really fast.. although all other maintainence are cheap, Toyota Engine helps.  I've only put on 6000 miles in almost 2 years for that car.  The rest will be on RSX... so you have something fun to drive on the weekend and RSX on the weekdays.. both are fun and reliable. 

[MX793]

I like Roy's idea of the sinking account.  Sort of like your own personal layaway program, assuming you don't intend on buying a car anytime in the immediate future.  If you're looking to buy within a year, I'm not sure how much good it'll do you, but if that's the case it wouldn't be a bad idea to start one for the car after next.

Assuming the $56K is the only account and there is no other savings account with some emergency money squirreled away....

I'd drop $15K of the $56K into some decently performing mutual funds, possibly a few individual stocks.  The market is low, now is a great time to invest.  I'd put another 10K in a money-market account as an emergency fund.  Granted, I keep an emergency fund in case I were to suddenly find myself without employment, something I don't think you have to worry about in the military so the idea may not be as meaningful to you.  In that case, maybe only stash $5K in the account and put the other half into mutual funds.  I'd want to keep ~5 grand in a checking account where I can have fast access to it to cover day-to-day expenses and if anything pops up (major appliance craps out and needs replacement or something).

So that leaves $26K left, plus the value of my current vehicle (if I have one), to put towards a car.  Assuming I didn't intend to buy for a few more months, I'd save as much of my income as possible over that time and add it to the current $26K and bring it up to at least $30K.

As far as what I'd buy when the time comes, there are a few scenarios.  One thing I can say for certain is that I would not finance a vehicle.  A car is a depreciating asset, there's no sense in paying more than you have to (interest) if you can afford to buy outright.  I also would be inclined to limit my purchase to $30K or less.  Personally, I'm uneasy with spending much more than I take home in a year on a car.

1)  My current car is paid off, in great shape and is a practical/economical daily driver and I can keep 2 cars (have a place to park two cars, can afford the insurance, etc). 
In this case, I'd be inclined to pick up something impractical as a fair-weather, fun car.  If new, I'd look at a Miata or Skystice (turbo prefered) or a Mustang GT coupe.  If used, I'd be looking at slightly used Mustangs (convertible if you're into that, I generally dislike droptops with more than 2 seats), 350Z, BMW Z3/Z4, Honda S2000, C5 or early C6 Corvette, or heck, maybe even a used Boxster.

I might also consider a lease in this scenario since it wouldn't be my primary car and I wouldn't have to worry about mileage limits and wear and tear fees.  Especially if I didn't intend to keep the car more than 3-4 years.  Hard to say, I've generally not been too keen on leasing, but I've usually approached it from the lens of the leased vehicle being my only vehicle.

2)  I do not have a current vehicle/ I cannot keep my current vehicle/ I can only have one vehicle.
If, for whatever reason, I could only keep one car and I already had a car, I'd sell it outright and put that money towards the new (or towards paying any money owed, if there was any) or use it as a trade-in.  Then I'd get something that was both fun and practical enough for use everyday.  I'd definately want something with a warranty, so I'd be looking at new or CPO.  Depending on how much I got from my old car, I'd be more inclined to break the $30K mark, but not by much.  I'd probably look at something like a Mustang GT coupe, Genesis coupe 3.8, Subaru WRX, BMW 128i, Camaro LT (stripped SS if I was in a climate without snow), CPO A4 Quattro, CPO BMW 328, CPO BMW 135 (if I could find one).

[MrH]

Honestly, if I was making $24,000 a year, it doesn't matter how much I have saved up, I wouldn't be spending more than $15,000 on a car.

To spend $30,000 on a car, more than a year's salary, is just financially stupid in my mind.

[The Pirate]

So, this $2,200 per month is separate from housing costs?  And it's relatively guaranteed?

I'd outright buy a Toyota Tacoma (04 extended cab 4x4 4-banger, say $12K) out of that $56K pile.  Then I'd finance (with a reasonable down payment) a 2004 GTO or a 2005 Mustang GT.

Wild card is to outright purchase a Crown Victoria P71 (I've developed a thing for those), and spend some money on suspension upgrades and mild engine mods - exhaust, intake, etc.  Five thou will get a pretty nice example of an 06 if you look.  Then, get an 8K down payment (from the slush fund) and pick up an AP1 S2000.

I've got several more ideas, but I'm going to stop now.  I'm not in this hypothetical situation, and the more I think about cars that I'd buy if I was, the more irritated I become! 

[Payman]

'97-'04 Porsche Boxster in the $15~$20K range.

[Rich]

So, this $2,200 per month is separate from housing costs?  And it's relatively guaranteed?

Yes, and yes (as long as a rule in the UCMJ isn't broken)

[Rich]

I wouldn't be spending more than $15,000 on a car.

So what would it be?

[the Teuton]

I would never buy a new car.  It's not worth the money, and depreciation is a bitch.  Being who and what I am, I would want to see the depreciation hit completely factored out, so a 3-year-old car would be starting it off.  Second, I would want to know my needs.  A sports car is great, but if you need to haul shit around, it's not a good idea.  Next, gas and insurance. 

Last, Reliability record.  Going on all of this, I'd say that a 2006...

S2000
RSX-S
STI
Tacoma S-Runner
Cobalt SS
...or something like it would work.

But you're making $26k a year.  It's not worth it to blow half your savings on a car and then blow more on keeping the car up.  I agree with MrH, $15k max.

[MrH]

So what would it be?

If I got to keep my Protege5, or any other relatively new and reliable daily driver, I'd probably get a used s2000.  A Mazdaspeed Miata, or 350Z would be up there too.

If I didn't have a car, I'd probably get an RX-8 as my only driver and a set of snow tires.  Probably would have to spend closer to $16,000 or $17,000 though.

[dazzleman]

I think you need to work on saving more money and increasing your income before you spend a lot of money on a car.  The amount of money saved is great, but a higher income is needed at your age to justify spending more than absolutely necessary on a car.

[TBR]

Honestly, if I was making $24,000 a year, it doesn't matter how much I have saved up, I wouldn't be spending more than $15,000 on a car.

To spend $30,000 on a car, more than a year's salary, is just financially stupid in my mind.

Keep in mind that is income is actually higher than that by at least $9,000 due to the housing allowance.

[MrH]

Keep in mind that is income is actually higher than that by at least $9,000 due to the housing allowance.

Still, in my mind to justify spending $30,000 on a car like some people here are suggesting, I'm saying you should be banking $65,000+ a year.