Car for 1st Year Consultant
Starting in a couple of months FT as a 1st year associate at a Tier 2 Consulting firm in a MCOL city and in need of a car (don't own one), since my office is about 20 min away from my apartment. Wanted some insight on what's a fair amount to spend given my comp ($95k base + bonus).
I want my car to last a while so I am looking at new, and the new cars (new Accords, Camrys, etc) that I've been looking at have been in the $30-32k range. Considering that I'd be financing the car, is this a safe amount? For additional context, I don't have any other debt and my rent is $1.6k. Also, lmk if any of you have other car recs or personal finance tips related to cars.
Based on the most helpful WSO content, here are some insights and tips for your situation:
Car Budgeting: Spending $30-32k on a new car as a first-year consultant with a $95k base salary is reasonable, especially since you have no other debt and your rent is manageable at $1.6k. However, consider the following:
Alternative Options: While new cars like the Accord or Camry are reliable and long-lasting, you might also consider certified pre-owned (CPO) vehicles. These often come with warranties and can save you a significant amount upfront while still being dependable.
Personal Finance Tips:
Car Recommendations: In addition to the Accord and Camry, consider other reliable and fuel-efficient options like the Toyota Corolla, Honda Civic, or Mazda3. These are slightly more affordable but still offer great longevity and low maintenance costs.
Long-Term Perspective: Remember, the goal is to balance your car purchase with your broader financial goals. A car is a depreciating asset, so avoid overspending and focus on maximizing savings and investments early in your career.
If you’re still unsure, you might want to explore more WSO threads on personal finance and car-buying strategies for professionals in your position.
Sources: Millionaire by 30, Can someone help me with budgeting? 170k as a 22 year old is absurd to me., Millionaire by 30, Year 1 in consulting - tips, tricks, advice, and unspoken rules., First car after graduation?
I'm beginning with the assumption that you're not a car guy, since you're asking this here.
First: consider a car returned off a short lease. The highest depreciation happens the minute you drive a new car off the lot. You save a lot by buying certified pre-owned. As an example, I bought a two year old car that notoriously doesn't depreciate. It was $35k new, and I got it for $24k, and it only had 22k miles on the odometer. Cars will generally last about 20 years or 250k miles (very rough estimates) so that usage was very much less than the 31% price reduction, and I got the remainder of the warranties on it too.
Second: A car is a depreciating asset, as mentioned above. If you aren't particularly interested in cars, get the cheapest car you feel comfortable driving and being seen in. Money spent on a car is money that you're not going to get back to spend on things you want to spend it on, like hookers and blow. (or whatever tickles your fancy)
Aren’t you going to be spending Monday through Thursday in Kansas giving deep insights such as “increase revenue” via PowerPoint slides? Your primary ride will be whatever Enterprise or National provides.
You don’t need a new car. Buy an old ass Camry or Accord, run it into the ground, and start saving your bonuses for a weekend Porsche 911 in a few years.
You can find a really good used car for like $20k or less. Why do you want something new for your first? You know it'll lose like 20-30% of it's value as soon as you take possession right?
I have a 2021 Camry with only 20K miles. I don't drive it that much. It has Apple car play though so suits my needs. I'd just look for a used one with Apple car play. Like bro said above if you're consulting you'll probably be traveling Mon - Thurs. Although I worked in a T2 Consulting firm for 4 years and opted not to travel but WFH instead.
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