Comments by "looseycanon" (@looseycanon) on "How Much Car Can You Really Afford? (By Salary)" video.

  1. Nice video, but I have an alternative, how to approach this: 1) This video only works so long, you are expecting to sell the car. There's a lot of buzz about energy transition these days, so this strategy might not be entirely applicable (some green nutjob outlawing sale of fuel), but driving the car into it's grave and owning it longer can change the math drastically, especially if you expect heavy use of the car, which further increases depreciation. 2) When calculating a loan, it may be more prudent to spread the loan for longer, especially if you're close to threashold for purchasing the car, because you can put that difference in repayment towards immediate cash reserve, in case something happens, while you're repaying the debt with you or with the car (say you lose your job or car requires unexpected maintenance. That money put aside is the gas, that get's you to the next job interview). Therefore, I'd recommend calculating future value of the car (eg. what you'll pay with interest) and base your decision on that "future price" and decide, whether you're willing to pay that, rather than the on spot price. 3) Consider total cost of ownership of the car. Not just how much the car it self costs and fuel to run it. Consider whatever permits you'd need to get along with the car, be it parking at your destinations, paid lanes, congestion charging, highway fees and more. 4) Calculate maintenance reserve creation. I like to use tax depreciation of a car for this. According to Czech tax code, a car is fully written off in 5 years and depreciation should reflect ware and tear of depreciated property. So inflate the amount you pay for the car on loan or leasing by 1/60 of asking price of the car, so you have a reserve for maintenance and if the car end's up as a total writeoff in an accident, after a few years of ownership, you'd have a fund to dig into for a replacement, in case insurance company refuses to pay out. 5) When buying a car, consider the total delta it does to your finance. You can end up with a higher income if you own a car! The reasons for this are numerous, from moving to cheaper part of the country while maintaining current job, leveraging reimbursements from employer by driving with lower consumption, buying cheaper fuel, than the company will reimburse with, dodging already mentioned fees or finding a better paying job beyond the reach of your current car (will become relevant with EVs) or public transportation. All in all, when you're buying a car, first, open Excel
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