How can people afford a new car?

Question

this one lady that wanted to rent our house had a $19 per hour job and was the only person in her family that worked. And I saw that she drives a new honda CRV, I dont get it. With such a low salary she can afford such an expensive thing. It was probably around $30K and that is probably more than half of her salary. And if you think that she pays taxes and also pays the rent how do people like her manage to get all of that.

Answer 1

maybe she sells crack on the side...

Answer 2

I used to think like that until I discover:

1. people do not think much of financial future. They spend everything they have and worry about things later.

2. people have savings from money their parents have been giving them.

3. she could have just lease the car. It only costs about $300/month.

Answer 3

$19 an hour is a lot of money compared to $14 an hour.

If she works full-time ( let's say 8 hours a day) for 6 days a week

$152 a day  

$912 a week

$3,648 a month.

Let's spend some money now.

If she has good credit, per monthly car payments probably is $280 and insurance fee is $170

Rent probably is $1000 a month ( for a 1 bedroom apartment or house), though I pay $800 for rent for a 3 bedroom house.  

Grocery probably cost her $300 a month.  

That's a total of $1,750 spending a month.

Subtract $1,750 from $3,648 gives you $1,898

Now, at the end of each month she would have $1,898 in her pocket to buy clothes, support her cell phone bills, cable, Internet, etc.

I see nothing impossible about what she's doing,

Answer 4

it's probably a lease, with good credit you can lease a car for very little per month.

Answer 5

Most people can't afford expensive things like new cars, but that doesn't stop them from purchasing them.   A lot of times they have no clue how much it will actually cost them.  They get approved for the loan and then just "go for it"  as if approval for the loan is some sort of an indication they can fit it into thier budget.

That is why so many people on this forum are crying about being upside down on their loan or have a car they just bought and can no longer afford or want to "give it back" to the dealer like it's a pair of shoes they decided they didn't need.

I hate to be cruel, but there are a lot of ignorant people out there when it comes to personal finance.  All they know is they "want it" so they figure out how to go get it. They sign bad loan contracts then they are stuck with trying to figure out how to keep it.

Answer 6

Why are you so worried about her. If she pays her obligations on time it should not be of concern to you. Maybe she won the lottery or has a rich relative.