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The only time that I could afford a car payment was when I was stationed in Germany, but I did not need a car. Buying a new Corolla might have cost less than my 1999 Subaru that I bought in 2012.
I never understand how poor people purchase new vehicles (regularly). I spent $2,850 on my Civic, almost $2,400 in gas to drive 52,000 miles over four years and nine months averaging 44 MPG and spending $1,704.88 in repairs. I pay $93.03 a month to insure two cars. I can only guess that one car would be $55 a month and $3,135 over 57 months. A thousand dollars for a timing belt that I planned on doing myself and three hundred for tires.
It has cost me ten thousand dollars to drive a then-thirteen year-old Civic 912 miles a month for 4.75 years and get 44 MPG. Everything adds up.
The cheapest car in 2013 was the Versa sedan at $12,780, but it probably would have cost another $1,000 for tax, title, and license. $2,850 down and 5% interest over 60 months would have me paying $206 a month on a $10,930 loan, totaling $15,226. According to AutoTrader (KBB), that car would be worth $5,933 now. It is rated 27/36, so I very well may have paid more in gas. I definitely would have paid more for insurance, although I should not have had any repairs, and it should have much more life left.
Of course, a five year-old Versa with 52,000 miles for $5,933 should still require few repairs. That makes far more sense to me, while people like to trade in one car they bought new for another.
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