Hi all,

I’m late twenties, unmarried, no dependents. 85.2k gross, 52.8k take home (after tax, insurance, 401k and HSA contribution) salary.

I don’t have a car. I have been waiting for a while now to get a car and live in a place without good transportation. I want to buy a car.

Since the used market is pretty hot right now, I’m looking at a new car. I intend to keep the car for as long as possible. I’m looking at a Hyundai Elantra 2022 SE, OTD price of 24890. As such I want to get a reliable car.

I have the money to buy this outright, but it would be a good chunk of my savings, and I also want to take the loan to build credit history. I am an immigrant and my credit history is thin, also am a first time car buyer - I have only one credit card with a credit limit of 2500 - I’m getting charged an APR of 6.9%. That means with 8k down I’m looking at a monthly payment of $404, for 48 months. I did the monthly expenses budgeting, and am looking at 29% savings with rent (900), utilities, and all other monthly expenses considered.

I will likely be getting a raise this year though I don’t know how much. At least 6%. That brings my savings up a little with the same expenses, to 32%. Of this I plan to make some contributions to a Roth IRA and to a S&P investment. I don’t have any other debt (except for the potential upcoming car loan). The balance after all that will be about $500 per month assuming no raise.

Wanted to get an idea if I’m spending too much on the car.

I’ve heard of the 20/4/10 rule. My monthly gross income is 7100. That means with a 6.9% rate of interest and 20% down payment, I’ll be paying 476 per month for a 48 month period. Adding 200 for insurance and 150 for gas, that brings me to 826, which is 11.6% of my monthly gross income.

This is my first big-ticket item so I’m feeling nervous.