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Old 10-02-2009, 12:31 AM   #1
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Camaro vs House?

(Jump to to skip the boring stuff.)

I was reading insideac's thread where he's trying to decide between a Camaro or going to school. The Camaro5 community has been extremely helpful and supportive so it got me thinking. First, insideac, go to school!

Second, I live in an apartment.....and I like it. I'm single and don't plan on getting married any time soon. I like being single. I have a nice ~8 year old car which I love and is in perfect condition. In fact, my parents have offered to buy it off me for 10K because they know the condition it's in and has very low millage. I'm mean, come on, that's a great deal! I can't pass that up. But I don't HAVE to get a new car. My current car is perfectly fine. I was also brought up to basically run your car to the ground before buying a new one. Not sure I agree with that.

Anyway, I'm told maintaining a house is a lot of responsibility. If your A/C goes get ready to spend some money. Need new roof? Money. Need to repaint, new carpet, fix the garage door or whatever. Honestly I don't want to deal with maintenance. Basically, I'm lazy...I admit. I don't want to mow a lawn. I like being able to call the fix-it man to take care of a problem in less than 30 mins...no hassles. It's easy as ordering pizza except you don't have to tip. I'm also in a similar situation as insideac in that I have a nice savings. That would be, I'm embarrassed to say, because I chose to live at home probably longer than I should have. :( It's because of that, though, I was able to put some money away. In fact I could buy a Camaro in cash and still have a little bit left over...not a great amount but some.

*For those that don't like a long read start below*

My plan is to get a Camaro and stay in an apartment for another year or two and then look for a house. I will have a small amount of money to put down on a house later but obviously not as much as I would have if I had not purchased the Camaro in cash. I know the responsible thing to do is save my money and start looking for a house so I can put a nice down payment. I know by living in an apartment I'm "pissing my money away" as people in my office so kindly remind me. But I may never be in a situation like this again. I'm single. I have no debts. I could actually buy my own dream car and have no payments. How many people can say that? What would you do? I know there's no clear answer but any advice would be helpful. I just don't want to find out buying a fancy car before a house was the stupid thing to do.

Oh, I would be getting the 2LT RS instead of the SS. I figure I won't be racing this thing and the V6 has more than enough power for me. I rented from AVIS so I know. That'll save me, what, 7k? That's pretty responsible, ain't it? I keep telling my self that anyway.

(Sorry for all this "lifey" stuff. I wish I had more experience in it. My parents just say it's cool either way. I was hoping for a bit more wisdom. I just don't want to be screwing my self in the long run.)
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Old 10-02-2009, 12:43 AM   #2
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get the house for many reasons. With current banking situation you will need more than a little bit for a down payment for a house so if you have the cash and means to do it now then go for it. Also now is a great time to buy a house and as a bonus you are first time buyer so you don't have to sell your current house while upside down. In a few years the market for real estate may recover a little bit. With a big camaro payment will you still qualify to buy a house ? If you have great income maybe so but then again if you have great income it wouldn't be an either or question just buy both.

Also your mortgage is tax deductible, this is a huge benefit of owning a house as opposed to renting.

Buy the house, then get a camaro. It's far easier to qualify for a car loan than a house loan, and if you own a house then getting a car loan is a snap. But for a first time home owner they will be really strict about your income/debt ratio. This was true a couple years ago before the collapse when a guy working drive thru at McDonals could instantly quality for a million dollar home in LA, but post collapse things have changed.
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Old 10-02-2009, 12:53 AM   #3
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As much as I love the Camaro ... House first ...

You get equity (eventually), tax write off (eventually) and joy of fixing things that break (immediately)!

Oh ... and then you'll have a garage to park your Camaro in!!
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Old 10-02-2009, 01:23 AM   #4
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Both!

Don't pay for the Camaro fully and have a small monthly payment on the Camaro and drop the rest on the house. Best of both worlds!
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Old 10-02-2009, 01:51 AM   #5
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I personally agree with hawk x7. Make a nice down payment on the car. Own the car and take your time looking for a place. You can decide to buy a house and still have it take well over a year, to find exactly what you want. For all you know you could find an awesome soulmate in 3 months that already owns a house



ps) owning camaro may help find above soulmate even faster
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Old 10-02-2009, 01:53 AM   #6
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Quote:
Originally Posted by HawkX7 View Post
Both!

Don't pay for the Camaro fully and have a small monthly payment on the Camaro and drop the rest on the house. Best of both worlds!
+1, Only if your income can support this though.
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Old 10-02-2009, 01:53 AM   #7
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You definitely don't need a house. The incremental cost of owning and maintaining a home vs. renting will more than offset any tax benefit of owning the house. In texas, our property taxes alone are over 3% of the tax assessment. As you also know, Texas real estate never really appreciate like in some other areas so you will be able to buy one down the road for a reasonable amount. Alson, it means that if your house does not appreciate by the 3% + interest you pay on the loan+ maintenance cost you will build zero equity. Just my two cents.
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Old 10-02-2009, 01:57 AM   #8
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I actually had this same dilemma back in 2001, although I was newly married. I received an inheritance and we seriously considered if we should use it as a down payment on a house or buy a Camaro. Keep in mind this was at the time when they'd already announced the Camaro was being discontinued, so it was a now or never type deal. Well we ended up doing the "responsible" thing and got the house, saw it double in value, and fall back to reality. If we had gotten the Camaro, we probably would have had to wait a couple of years to buy a house, during which prices sky-rocketed. My reward for doing the responsible thing 8 years ago: I have a home which is still worth more than I paid for it (along with all the other advantages of owning a home), and I have a 2010 Camaro in the garage
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Old 10-02-2009, 02:34 AM   #9
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Didnt someones sig say you can sleep in your car but you cant drive in your house... =p
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Old 10-02-2009, 02:42 AM   #10
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Ok.

One thing to remember...and I don't know if anyone said it because I skipped to the and passed all the other posts......

House prices are on the rise according to MSNBC and all the other news stations. Before long, not only the cost of the house you will eventually buy will go up, but the APR on the loan itself will go up. Therefore, you might actually end up "paying for the car again" if you get the car now and then wait an extra year or two and get the house (in the actual cost of house and loan on house).

So....

...what will it be?


You COULD get the car and have it paid off.

That is actually pretty darn smart to have it all paid off. You'd save approximately $2k to $3k tops in finance charges. However, the finance charges in getting a house again...over the life of the loan?....top that 2 to 3k easily.

You already know the answer.

The REAL question is......




CAN you get the 2LT RS NOW AND be able to still get a good rate and have enough to put down on that house at a later time!
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Old 10-02-2009, 02:47 AM   #11
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Ok. I read your first part.

Get ready to mow a lawn....or the HOA will be banging on your door.

LEARN how to fix a garage door. Dude...it's really simple.

The AC? Don't try it. Call someone...and get ready to pay someone to fix it. That is, unless, you buy the appliance warranty from someone and have it done for either free or next to nothing.

Maintaining a house is easy. But, even better advice?....buy NEW. That way, you don't have to buy someone else's problems. You KNOW what you are getting. Oh...and if you are a first time buyer, don't forget about your tax break. In fact, our wonderful gov't is currently thinking about raising that tax break so you can get more back right off the bat.
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Old 10-02-2009, 02:51 AM   #12
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Plain and simple. It's a buyers market today. You say there is nothing wrong with your current car. Get the house while it is a buyers market. IT WILL CHANGE someday.
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Old 10-02-2009, 04:04 AM   #13
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Depends what you have for a garage. If you have a garage at your apartment, get the car.

If you are parking outside, get a condo with a 1 or 2 car garage.
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Old 10-02-2009, 04:08 AM   #14
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I say get the Camaro. I had a house and what a pain it was to up keep. took most of my free time plus any extra cash went into the house i hated it i will never own a house again it realy sucks. I am also single and plan on staying that way as well. I love just calling in for a problem and having them come and fix it. no money out of my pocket to do so. the apt life for me.
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Old 10-02-2009, 04:38 AM   #15
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Ok you say it is just you for now. Buy a newer small house with a garage. Now when I say small I mean around 1400SQFT. These will usually have a master bedroom with bath. 1-2 more med size bedrooms, living room dining area.

Buying newer home means less upkeep. Buying a house this size is a great first home. Room for you and wife when you do get married and room for first kid. One of the bedrooms could be your office and the house will likely have at least a single car garage to protect the Camaro.

As your family grows if you have one your house would of went up in value since housing is starting to rebound and you could sell it making some money for a down payment on a bigger house.

Also you can always pay a nieghbor kid to mow the yard if you do not want to. I work 2 jobs and Kathie works so we have a yard guy and cleaning lady that both come once a week. Now I have over a acre of yard and a 3800 5 bedroom house to clean and it cost me 60 a week for yard guy and 64 a week cleaning lady. Yard guy on works 2 times during the entire winter cleaning up leaves so cheap in the winter.

Ok done rambling hope it helped.
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Old 10-02-2009, 06:13 AM   #16
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House first ... DO NOT RENT
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Old 10-02-2009, 06:23 AM   #17
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The housing market us so depressed right now you can buy a lot more than if you wait 2 years and the market recovers.

And the tax benefits and equity you will be building are too good to pass up.

Buy the house.
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Old 10-02-2009, 06:29 AM   #18
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I feel bad for this guy. I'm in a similiar situation and we all know the house is a smarter investment (keyword investment). But the Camaro, now that's passion. I'm currently renting and thinking of which i'd like to do next.

You only live once. Do you really want to be the 70 yr old guy driving 35 in a 55 in his new 500 HP Corvette? lol
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Old 10-02-2009, 06:34 AM   #19
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If you buy a house, do not but a condo or townhouse. I guess it may depend on where you live, but over and over, I've seen that these are much harder to re-sell than a house.
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Old 10-02-2009, 07:20 AM   #20
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Unless you are wealthy do not pay cash for a car. With good credit you can get a good interest rate and save your cash. If you keep your cash in the bank you can be looking for a house that fits your needs. If you pay cash for the car it will be hard to save up the money again (since you no longer live with Mom and Dad). The amount of money you will be saving on interest does not make it worth depleating your bank account.
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Old 10-02-2009, 07:46 AM   #21
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If you buy a house now, let's say it costs you $800. mo.

If you rent an apt. let's assume it costs the same. (normally the same priced apt. will be much smaller but this is a simple example)

Fast forward 20 years... Your house pmt... $800
Your rent, same apt... $1600 (maybe more maybe less)

Equity in home after 20 years on a 30 year note... $30,000 conservative guess
Equity in apt. after 20 years... 0

Many advantages to owning. Few advantages to renting.
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Old 10-02-2009, 08:03 AM   #22
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Well, I built my first house last year and I had the exact same dilemma as you. Car or House. I chose the house, however, the mortgage payments (plus taxes and increased insurance) are about 2x what I was paying on rent. So I am definitely pissing a way more on mortgage interest than I would've with rent. However, you will get that fancy dancy tax deduction. But really It's only a few thousand dollars so don't get too excited. You still will be paying A LOT of money on interest the first 10 or so years of your loan, most likely more than you would've on rent. So you'll be saving less money in the bank than renting.

But besides debunking the myth that you piss away more money renting, owning a house really does have a lot of benefits. First, if you are a car guy, a garage is a must. You will also have more space to set up an office, or a theater room, or darkroom, whatever it is you want if you're single with no kids. Even in a small house, there's so much space! Since it's your first house, you probably won't stay there for the life of your loan, but if you stay there for 5+ years you will probably make a profit when you sell your house. Even in this soft market.

Yes you'll have to mow the lawn, but it takes an hour once a week, and think of it as your weekend exercise routine! I really recommend buying a new house or one that is less than 3 years old. That way you won't have to worry about repair/maintenance any time soon. The only warning I have if you buy new is that you will have to buy a lot more things to start such as window treatments, flooring/countertop upgrades, landscaping etc. Especially with starter homes, these things are not included in the base price, but they're awfully tempting to buy. Luckily you can roll that into your mortgage in most cases. So don't worry about that too much.

So what's my recommendation? Of course it's buy the house. BUT if you will have enough money to put down on the house and still afford the payments after you buy the car, buy the car, and the house When you calculate how much you're going to be paying for a house every month add in property taxes and homeowner's insurance. That can tack on several hundred dollars a month. Oh and plan for $6,000 in closing cots too that you'll have to pay up front on top of your down payment. It should be less than $6000, but it will still end up being several thousand.

And a tip when buying a house. Get approved for a loan FIRST and have the bank write down the loan amount you are approved for and have them write up a Good Faith Estimate of your loan costs. This will include your interest rate (if you lock that day), closing costs, and monthly payment (based upon the maximum amount of your loan) amount among other things. So this will really help you budget! After you have the pre-approval, then you can begin shopping for homes. Most sellers want to see your pre-approval letter before they will sign a contract with you to purchase the home.
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Old 10-02-2009, 08:06 AM   #23
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Old 10-02-2009, 08:26 AM   #24
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I don't think there is an easy "one size fits all" answer to this one. Like many, my first inclination was to say get the house first. But those were my priorities. As recent economic events have shown us, a house is not necessarily the grand investment many people have treated it as.

There are a lot of advantages though. Mortgage interest and property tax are tax deductible, your mortgage payment will not go up even when apartment rent does (as long as you're sane and get a fixed rate mortgage), there is a $8000 tax rebate for first time buyers now (until November and Congress is talking about increasing it to $15,000), interest rates on mortgages are sure to go up in the future, and you MAY be able to build equity when/if housing prices increase. For me, one of the biggest things was after 9 years of dorm rooms and apartments with noisy neighbors I wanted peace!

However, as you pointed out, there are negatives as well. What if you need to move because of your job or you meet someone? I would hate to have to try to sell now or in the near future. As a single woman I can say, yes, mowing the yard and raking leaves sucks, but you get used to it. I bought a house in good condition (one of my highest priorities) and haven't had anything major go wrong, so maintenance hasn't really been a problem yet. I learned to do a lot of stuff on my own and I call in someone for stuff I can't or don't want to do.

For me, I got the house first and the new car second, and I have no regrets. But if owning a house doesn't appeal to you, get the car -- however I don't recommend getting a car loan if you can pay in cash. If you could get a better interest rate on your savings than the interest you would pay on your car loan it would be worth it, but I doubt that's possible these days. The other reason to get a car loan would be if you need to build your credit for a future house (credit cards won't build your credit score like on-time loan payments will). Good luck!
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Old 10-02-2009, 08:28 AM   #25
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