Celeron

So here's the deal. I'm 22, just out of college and I've started my first full time job (started last wednesday). I'm making decent money (54k) and I've been eyeing the TSX since mid-July. Now that its getting closer to the time when I can actually purchase one I'm beginning to think maybe I should go with something cheaper, like an 05' Civic. I've never purchased a new car, and the one I'm currently driving, a 1996 Accord DX, was given to me.

Monthly the TSX is going to cost me around $500 for the car payment plus another $100 for insurance, not to mention the premium fuel. A Honda Civic '05 runs $10k cheaper for the EX model and would cost roughly $350 a month for the car payment, not sure on the insurance, and the gas can be anything that burns. As it turns out the Civic and the TSX are VERY similar when it comes to interior dimensions and cargo room. The Civic actually has more space in some instances. Obviously it doesn't have the same niceties.

Part of me says maybe I should go for the Civic because it would probably be a wiser choice for a first (brand new) automobile and the other part says get the TSX because I don't want to short change myself when buying a car.

Recommendations, thoughts, life experiences?

Thanks!

Whiskers

At your age I think the rule is if you think you would be happy was a less expensive car, you should get it. A Civic is a great car (I bought a new Civic hatchback at your age). Other factors include whether you want to save money for a house, marriage, etc. Hondas also have good leases, maybe you can lease a Civic for 2-3 years to feel it out.

uworich

hey man.. i'm in the same boat as you. i just turned 22, but i'm still in school... however, i'll be graduating and making USD$65k come August.

i'd say go big or go home. I'm picking up my '05 TSX next Tuesday. Enjoy yourself while you are young and don't forget that you have the greatest asset which is your future earnings potential.

Hope to hear that yer in a TSX.

Whiskers

Wow, is this not the angel on one shoulder and the devil on the other.....

Jeffropugs

Get a used top of the line accord, 2001 or 2002. It'll be cheap, fast, have leather, and still be an awesome car. I used to have a 2001....

At 22, you should be putting most of your $$ towards enjoying life. The ability to go out whenever you want and eat out whenever you want is huge (it is for me). Remember, taking a hottie out on a date is gonna cost ya.

A lot of the people my age in LA drive BMW's or SL500's, but live in an apartment and thier cash is going to the toilet. I 'put my time in' and just bought a TSX so I can still drop a grand in vegas over a weekend and think nothin of it....

If you want to spend the $$, spend it on a house in NC. With the money your making, find an OK neighborhood, get a duplex, and rent the other half out. Once you get the real estate bug, you can't stop. The earlier you get it, the earlier you'll retire. you should be able to afford a house for $150K and still live good. If not, you can always rent room out to your friends...

Hope it helps...

stuckthrotle

wait till you have been working 3 months or longer.I wouldnt call 1 week a secure job.

fewy

I was in the same boat as you. Just got out of college, making some where in the mid 50's. I purchased my TSX 8 months ago, with the cost being about 500 a month.
The car is great and I love driving it but it might have been a little expensive for my first car. The reason being I live with a roommate and california rent prices are sky high. That along with other living expenses doesn't leave a lot of money that I can save. Is the car worth it? Yes. You should consider that it is at least 500-700 dollars out of each months budget when you add up all the costs. If you dont need a 4 door car you might want to consider the RSX.
The main reason I purchased the TSX was because I was driving a 1991 Chrysler Imperial and the car was embarrassing to be seen in.

JTso

iTrader: (2)

If you are just starting out, just get a cheaper and reliable car and use it as transportation. Wait until you have more money saved up in a few years, then go out and buy something better. Spending the money you don't have yet is not a wise choice.

yuhoo22

I was almost in the same situation you are in a couple years ago. I actually would not get the car right now. Sure having a nice car is great to impress people and all, but you still have a car that i assume still works fine. I waited a year before I bought the TSX, which means I drove my 1992 Accord EX for another year.

After enjoying having the money to do anything I wanted (travelling, hanging out, shopping, dating, etc.) I was able to realistically look at my monthly budget. I figured that I could do it without changing my life style too much so went ahead with the purchase. Because I waited an extra year, I was able to save $3k+ in finance charges because I bought the car cash.

That's my advice for you. Just think about your future before you jump into something as big as this ($500 + $100 amount for just car payments & insurance is a good chunk/% of your monthly income after taxes)......meaning put away as much as you can for your 401k and start it ASAP.

pby

This thread has got me thinking .... What is the general rule of thumb when assessing the affordability of a car with respect to one's monthly or annual salary?

My guess is payment + cost-to-own (insurance, gas, oil change,....) < 1/5 of monthly paycheck? Even 1/6?

pby

Not to mention your Roth IRA.

Whiskers

I think it has more to do with the size of the penis...

sauceman

If you're going to cross-shop the TSX with a Civic, GET THE CIVIC. For plenty of reasons.

Celeron

Wow everyone, thanks for the responses. I'm still undecided as to what I should do. I'm going to go out tonight and drive the Civic around. I drove the TSX last night, so I figure driving a Civic today would be a nice comparison.

About the job security, I've worked at this company before as an intern so I know the environment, the job, and everything that goes along with it.

My 1996 Accord is doing well, but I have a feeling its going to need some extensive work soon. Its got around 97k on it, the clutch will need doing soon, it seems like the pedal catches higher and higher. The brakes need to be done. Last time I had it looked at (over a year and a half ago) the clutch master cylinder was seeping a bit, as was the brake master cylinder. Nothing to be alarmed at, but something that will need to be replaced when everything else is done.

What reasons are those?

GTScott

Here is what I would do if in your position. I would settle for the less expensive car. However, I would still make payments like it were the more expensive car. If your TSX monthly costs were to be 600 and the Civic were to be 200, I would make a 400 payment to myself. Put this money in a tax shelter somewhere. Throw it into a Roth IRA while you still qualify. Maximize any employer offered retirement vehicles. Or, if so inclined, throw it somewhere and start saving for a house (if you don't already have one). When it comes to investing, I wish I had done some things cheaper earlier on and taken adavntage of a few programs while I had the opportunity.

Wow, how boring is my idea!

-GT

Son_Of_Eniac

Get the car and enjoy it....

You could be living in Miami and paying close to $300 just for the insurance !!!

Either way is fine. Just honestly ask yourself where you want to be financially long term and calculate if you can have the car.

Good luck !

GIBSON6594

I'm the same age and I got the same advice when I first started my job. Excellent advice.

RogerPodacter

Hey man, i was in a similar situation as you a year ago. I graduated from PSU and got my first full time job making 54K a year. I wanted the TSX real bad and i saved up some money for a little less than a year, then used that as a downpayment (my pops helped out a little too). I couldnt be happier. I say you wait a month or two, see how your budget really is, then put in an order for an '05 TSX. You only live once, after all...

sipark

What's up with all these college grads making mad $$$$?
I thought I lucked out..

jcg878

I think 15% or so. I don't think most people agree with me.

I vote in the Civic column... or a Mazda6 4-cyl

And I definitely agree with sauceman

jlukja

You have to consider what owning each car says about you.

Civic: Practical, thrifty, economical, etc.

TSX: Stud, devil-may-care, big long penis

Which one do you want to be perceived to be?


j/k




Seriously, In your situation I would probably buy the more practical car, maybe a used one. Then, after settling in a bit you could get the TSX in 2-3 years.

tsxhondatuner

the civic is almost $15k cheaper. not to mention cheaper on insurance and gets like 34 mpg. and has no rattles. haha.

NorCal

Keep the Accord and get into a house or condo while the rates are still low - you'll get laid a lot more in a condo than you will in either the Civic or TSX

matelot

follow your heart & get what you really want

supraken

iTrader: (1)

I'd say spend the money (assuming it's nothing more than $1500 or so ) and fix up the Accord, use it well for another 2 years and save up for down payment for car or house, or just go for the TSX. Think about it, realistically, you won't be satisfied with the Civic especially since you already have a not-too-old Accord, and that you also have your eyes on a TSX. You will probably end up trading in the Civic a year or two down the road, when you finances are straighened out and stable. the money you lose there will be much more than the money you spend on the Accord (including taxes, new car value depreciation, higher insurances).

So if you are not going to be driving the car you truly want anyway, why waste the money on it, while you have a car that can serve your for another 100k or more? of course, this is assuming that your Accord is not constantly giving you problems.

I would say first decide if you REALLY need a new car, and then if you decide that you do, just get the TSX. I'm pretty sure you would feel pretty crappy in the Civic after you've driven the TSX, as I have experienced.

txathlete

Hmmm.. after reading some of these posts, in my opinion, I think investment/nest egging is the best option for you. I agree with GTScott. He has a very good idea about paying yourself first and saving money for a house then get a TSX. I need to take his advice ASAP. A car is a losing investment (unless it's a rare classic).

The problem I see is desire. We were all at some point or another in our life in the "gotta have it now mentality." So if you can fight off the desire to get a TSX now, you will definitely be in a brighter financial position when you walk into the dealer ship, flash cash in their face and go home with a car $500 over dealer's cost with extras thrown in. A dollar today is worth more than a dollar tomorrow.

Oh, there is the smart way to do things and the "follow your heart" thing. Just figure out which one will allow you to sleep better at night and you'll have made your decision.

Now I need to go get me a $54K job.

VeniceBeachTSX

I'd take it a little beyond that, and give the same advice I give to everybody I counsel coming out of business school, or the occasional new college hire I bring in to business:

Quite simple: If you don't have enough savings to live comfortably for six months with no income, then you don't have any money to spare. Period.

I don't care how much you have tied up in real estate, or anyplace else. Because when the sh*t hits the fan, you're suddenly going to find that nobody wants to cash out your equity, or that the market has suddenly become illiquid and you can't get what you need. Six months cash in the bank (or in relatively safe investments). Until you have that, don't spend money on luxuries.

The reality of today's economy is that nice incomes can and do disappear overnight. And it can take a while to replace them. And even if you can, you probably don't want to have to sell all your stuff and move back in with mom.

Take it from somebody who's already had three careers, one changed by choice, the other by force of circumstaces. We're all going to have 4-6 careers. We're all going to be forced to leave jobs. We're all probably going to have at least one lenthly period of unemployment, and none of us know when it will happen.

I know lots of people who thought they were millionaires who ended up living with their parents because they never bothered to be practical about where the money went and when the sh*t hit the fan, there just weren't enough people around to buy all those used Porches. I've seen my own income drop from $400K to $0 in a year and yes, I'm even old enough to remember seeing my real estate drop more than 30% in value.

You need six months in the bank. Period. Everything else should be secondary. Save on the car for now and deal with it later.

pby

Amen!

vkewalra

We have a couple fresh from college kids at work right out of college wanting to buy new cars. The best advice I could give is first map out your budget:
how much you want to save (poss. house, marriage, but definitely emergency money)
rent+utilities
living costs (essentials like food, medical, hygeine products, gas)
entertainment (going out with friends, dating, etc.)
then see how much you have left over for a car+insurance.
I know entirely too many people who looked at it from the perspective of what they wanted, then end up living paycheck to paycheck. If the TSX still fits in your budget after all that, then go for it. Otherwise it's no fun having a nice car, but not being able to go out with your friends or seeing a bunch of zeros in your bank account with nothing in front of them. Definitely plan in for emergency money, shit happens, see the above post.

Celeron

Thanks for all the view points thus far guys. The agonizing continues over here. I got word from the local Acura dealer that they have located an '05 ABP 6MT Navi. They also gave me a quote on the price. As it stands now payments would be $528. Ouch!

Tomorrow I plan on test out the Civic EX Sedan 5MT and the Accord LX V6. I got a quote for the Civic coming in at just $400 over invoice. $16554. Pretty decent price I thought. Payments on this would be a paltry $280.

Still waiting to get a price on the Accord LX-V6.

I checked out the Mazda 3 last night. I sat in it 2 minutes and was just flat out disgusted with the interior build quality. What a piece of crap. I was not impressed. My 1996 Accord DX has a nicer quality interior.

pby

Hmmm....too bad there is no RSX 4-door equivalent. Then perhaps your decision would be a no-brainer.

Well, I would probably go with the EX Accord but not sure about the V6. The Civic sounds like a good deal but ... you're not in school anymore. hehe

As for the Mazda3 ... try to avoid Mazda and even Nissan.

Good luck.

t_dot_porkchop

dude....what did you take in school to be making $54K USD right away?

i say you drive your accord for another year and save up atleast 50-75% of the TSX price...then buy the TSX and finance the rest. with $54K/year, you should have no problems with that arrangement.

Celeron

I got a BS in Applied Networking and Systems Administration from RIT (www.rit.edu).

The plan today is to hit up the Honda dealer, drive the Civic EX sedan, Accord EX, and Accord LX-V6. Maybe that will help clear things up.

lokman

I agree with this man and nearly everybody elses' posts in this thread.

Unless your Accord is falling apart, I would stick with it for another year, save up your cash, and then get the TSX you really want next year instead of something you'll "sort of like, but always really wish you got the TSX" right now. It might not even take that long, maybe 9 months or so.

If you're even slightly unsure about how purchasing the TSX will affect your financial position, then I think you need to clarify your budget, personal situation and future plans some more to see how the TSX fits into the picture.

Good luck with your decision!

Celeron

I just got back from the Honda dealer. I worked out a deal with the sales manager for a 2005 Accord EX, 5MT, for $21750 OTD. Pretty decent price I thought. Sticker is $22660. Any thoughts?

mishylvr

Yes, here's a thought. Some very intelligent peopke gave you some very good financial advice. Yet you haven't made one comment or thank you for the time and thought thought they put into answering your question. Granted you are very young and that may not have been the advice you were looking for, but that is no excuse. I have been a long time lurker but this bothered me so much I finally had to register. So, Celeron, any thoughts???

Conman

I suppose when Celeron posted "Thanks for all the view points thus far guys." in post #30 doesn't count? Mishylvr, I suppose you want a 300 word essay from Celeron of all the good advice instead?

VeniceBeachTSX

I think I wrote one of the longer responses. And I took his simple statement as sufficient thanks.

Fibonacci

I couldn't agree more. When I graduated from college and was first making some real money, I wanted to have a hot car. Instead I bought a two year old Accord EX coupe and used the extra cash to pay off my student loans early and save money for a home.

Some chicks may dig a cool car - but many will respect you more for owning an appreciating asset - like a home. If you learn to be smart with your money at a young age - you'll be a lot happier later. It's much better to earn interest rather than to pay interest.

members78

i think the rule of thumb is get a car that is approx. half your salary. i heard that somewhere.