It was originally a 5 year loan that I paid off in 3 years.
I pay about $600, about $100 of which is insurance. I bought my car “used”, it’s an '06 Charger that had 6k on it, but it’s exactly what I wanted (Daytona trim). The payments seem pretty big, but I’ve gotten about $600 a month raises since I started working after college about a year and a half ago, so it all works out in the end.
Yes, I’m a bad, bad man! 
I would say whether or not to purchase a new versus a used car in a lot of circumstances comes down to what your buying and use patterns are as well as what your needs out of a specific vehicle are.
I, personally, am with *Edward the Head ** and Jodi. My husband and I purchased a new car a couple of months ago (2006 Dodge Magnum, if anyone cares). We were in the market because the lease he had on his current car was due to run out and we did not want to do the lease thing again. Since we’re planning to keep this car until it dies of venerable old age, resale and depreciation weren’t actually large considerations for us.
In our view, the car is not an investment, it’s a tool. In my view, a purchase can only be considered an investment if you intend to resell it. We intend to get our value out of it through using it throughout its productive life. Like a vaccuum or a television.
Buying a new car, as opposed to a used car of a similar make and model (we preferred the make and model we got for a variety of reasons - we wanted a station-wagon type of car as we’re getting to the kids stage of life, we wanted a lot of trunk space, my husband is a of sufficient size as to make that a limiting factor (he’s 6-4 and built solid), and he lusted after that specific make and model, etc) meant that we were getting an absolutely known quantity.
With used cars, there’s always the possibility that the previous owner failed to do routine maintenance - or had a nasty accident - or had a kid who ground sushi into the upholstery - or any of a thousand things that you never know about, until they become a problem. Maybe you’ll get lucky, and the previous owner was a thoughtful, responsible soul. Maybe you won’t. No way to know for sure until after the purchase is made. With a new car, that’s not a concern.
Also, research in our area indicated that the used models we preferred were selling for approximately 15 - 20% less than the comparable new models. I was happy to pay a 20% premium not to have to worry about unknown factors - and to get a car that is free from defects and to my own specifications as well as with 1 - 2 years fewer wear and tear on it.
We’re not idiots because we decided a new car was the way to go for us, thanks.
As it happens, the deal we cut with the dealership is a 6-year note, with $0 down and 0% over the life of the note. Also, the dealership threw in 7-years, 100,000-mile coverage for everything but the tires and wipers at no additional cost. So, our payment is approximately $330/mo, and we’ll end up paying precisely the price we were quoted (which was somewhat below sticker price). With insurance included it’s right around $400/mo.
However, to the OP, if your friends are actually making payments on two fairly high-end new cars, $1,000/mo. is probably a reasonable estimate of what they’re shelling out.
*The lease thing made sense when he got that car, in part because of the deal he got, in part because of his financial situation at that time, and partially due to New York’s odd financing laws at that time.
Makes sense, but apparently it’s still fairly uncommon:
Mine’s a lease, but I figure I’ll give my input.
My car is a 2006 Toyota Highland hybrid and we have the 3 year, 20k mile a year lease at the rate of $465 a month. I had them at $260 for the 12k mile a year lease, but I work at my family business and we travel a lot, so my dad agreed to pay half of the payment if I’d let him use it whenever he (or we) travel for work (I’m 21 and a full time student-- though I work my tail off for as many hours as I can-- I could swing the $260, but definitely not the higher amount).
Before that, I had a 2003 Honda Accord LX on a 3 year, 15 k mile a year. My car payment on that was $199 a month, but I was in an accident and that car was totaled after 3 months (her fault, not mine).
Just FYI, even if you don’t plan to trade in the car and roll the balance over into a new loan, depreciation is important to consider. In the event that the car is stolen or totaled in an accident, your insurance company will likely only pay the wholesale value of the car. If you’re signficantly upside-down because of depreciation (and you don’t have a Gap protection policy), your wallet could take a pretty big hit.
Our payments are about $575, plus $180 a month for insurance - $755 a month for a 2006 Dodge Ram truck and 100/300/50 limits on the insurance. (instead of the grossly inadequate state minimum 15/30/5)
Part of the car loan is also to pay off some upside-down-ness we had from the Jeep Liberty we traded in.
I heard a rule that your cars’ total values should not be more than half your yearly income. So if you make $50,000 per year, all your vehicles combined should not be worth more than $25,000, or you have too much tied up in things that depreciate in value.
We have one truck that is paid for, and we just bought a 1999 Honda CR-V that we pay $250 per month on (I only took out a 2 year loan, and I plan to pay it off in the next few months.) Hondas are hard to find used, that is true, I got a really good price on this one and snapped it up ($1500 under blue book.) It had high miles because it was towed behind an RV. Even with whatever repairs we may need to make on it (although it’s in great shape), I am sure it won’t cost $15,000 to repair over its lifetime, about what a new one would have cost extra. If you save up a few month’s worth of car payments, you can set up a nice emergency car fund for yourself so you don’t have to worry about maintenance fees.
When you add in gas, maintenance and insurance, cars are expensive and we just don’t want a car payment hanging around forever. Heck ,with gas prices what they are we spend more on gas than we do on car payments. Plus insurance on older cars is cheap! We only pay about $850 a year for full coverage on the cars.
We just don’t want to get into the mindset that we will always have a car payment. It is our plan to pay off this car early and never have a car payment again.
Hey, if anyone wants a 1997 Passat I have one for sale 
$250/month. 3 yr loan on a 2001 Saturn SC2 (3 door) I bought in 2005. Almost done paying!
Well, you’ve got company, at least–we also pay cash for all our cars (why would I want a monthly payment?), and our house is paid for, and we don’t run a balance on our credit card.
What I don’t understand is why someone would pay $35K for an SUV or up-market sedan when you could buy a Suzuki Aerio for half that. I’ve got better uses for my money than to have it rolling around on pulic roads, depreciating.
This is my POV as well. Part of the reason I’ve been so completely assimilated by the Honda Corporation is that IMO the best way to calculate the cost of a vehicle is on a per-mile basis. You can drive a Civic further (longer) for less money than any other car on the road.
Looking only a vehicle cost (not insurance, gas, or routine maintenance), I figure as follows: I paid 15K for my car new in 2001. I paid it off in 2004, with about 75K miles on it. So I had a “per mile” cost of 2 cents a mile to buy the car. Now the car has 148K miles on it. I can either look at that as lowering the “per mile” cost to one penny per mile, or I can think of that as 75K additional miles that I’ve driven “for free.” Either way, I’m pretty happy. Plus, I confidently expect the Deer Slayer to run for at least 50K more miles (on routine maintenance only) and then for an unknown amount of additional miles until it collapses. And that’s all gravy, IMO.
$415 for my '02 Chevy Trailblazer, bought used
$446 for my husband’s '04 Chevy Silverado 4WD (yes, he uses the 4WD), also bought used
$861 total. But we bought both of these planning on driving them until the wheels fall off (which we hope won’t be for a long time.)
Paid cash for my 2004 Honda Civic, will do the same if at all possible for any future cars. I buy new cars because I want my car to be as trouble-free as possible, but I go for something like the Civic or a Pontiac Sunfire (my previous car) instead of a fancier, more expensive car.
This article says that high car payments are the real reason why so many people are broke.
Yeah, or prefer Manchego over Velveeta, Santorini instead of Bay Minette, Clapton tickets instead of Zamfir. Me either. It’s not like people’s situations, necessities or desires might actually differ.
See, I can understand what people get out of more expensive cheeses, vacations, or concerts. I don’t understand what people get out of expensive cars, unless it’s some convenient feature like those cars that will email you a monthly report on any problems the car’s computer has detected. For me, a car’s a car- one does about as well as another at getting you from point A to point B.
I’m not quite there, but I kinda consider each step above “basic reliable, reasonably comfortable transportation” somewhat of a luxury, that only makes sense if you have proportionately higer income/wealth.
Same way expensive cheeses or mineral water are a luxury. And there’s nothing wrong with treating yourself. But you could buy a whole messa cheese for the monthly payments on a Range Rover.
When I see all the people driving big new cars/SUVs, I seriously wonder what their financial situations must be that they can afford the payments/leases on them. Or if they paid cash, how truly flush they must be.
Well Anne, some will send you that report. Then there’s enhanced safety, performance, reliability, comfort, quiet, exceptional audio, stability management, navigation, handling… I mean seriously where do you want me to start? All these extra things that drive the cost of a vehicle up actually are tangible, appreciable elements. In some cars, their benefit is nothing short of extrordinary. I’ve no problem if some people are indifferent to them, couldn’t care less really. That’s their deal. What would cause anyone to turn up their nose at those who feel otherwise?
Some cars manage to get you from a to b. Others will make it so that you absolutely can’t wait for the next opportunity to do so. A few will do this leaving you feeling as if you’re on the couch with slippers. Some can do so with an exhilarating force nearly requiring you use a shoe horn to extract yourself from the seat when you get there.
I want a car that makes me dream about the next time I get to drive it. I’ve always been passionate about that and I can’t say it’s waned one iota over the years.
A to B? Yeah, let’s do it again… and again… and again!
Heh, even my sub-$20,000 Impala does that.
When I win the lottery or inherit a couple million from a long-lost relative, I’m splurging for that $90,000 luxury car, and I’m going to enjoy it. Until then, point-A-to-point-B suits me fine.
lieu, I have to ask, what car do you drive?
now it’s Zero, but last month (my last payment, WOO!) it was $219/mo
it’s an '02 Dodge Neon, with 93,000 original miles on it, still runs perfectly, i plan to keep it and drive the wheels off it
no, it’s not a powerful, sexy or intimidating car, however it IS the best kind of car there is…paid for
it’s reliable, has been meticulously maintained (oil changes every 3K, tire rotation every 6K, snow tires in the winter, routine maintenance performed at sheduled intervals) and has never left me stranded, there’s no point trading in a good, reliable car that’s paid for, just because it’s no longer “new”…
that said, i am planning for it’s replacement, most likely a small diesel car, like a VW Golf or something