Can you Buy a Car in a Year?

Buying a car is a big deal, no matter who you are. They are much more expensive than buying a book or a pair of jeans. Many people finance a car or lease a car instead of buying it with cash. It might seem impossible to be able to buy a car in cash if it costs $20,000 or more. One way around this is to buy a used car. You can get some cars for as little as a couple thousand dollars. You could even get a piece of junk for a few hundred, but you'd have to put a little work into it.

Buying a car new has a lot of advantages. If you can pay for it in cash up front, you can save a lot of money. If you want to buy an $80,000 car without financing or leasing, you will have a lot to save. If you make a lot of money, it is possible, but if you have an average income, an $80,000 car just might not be in the cards. If you want to save to buy a car costing about $18,000, can you do it in a year?

First, it will depend on your salary. If you make less than $25,000 a year, there will probably be no way to buy it because even if you were able to save every penny, you still have to pay taxes on it. It will also depend on how much you spend every month. If you live with your parents or somehow get out of paying for a place to live and food, you could save a lot more, but using the money you save to buy a brand new car probably wouldn't be very respectful to those you are taking advantage of. You should probably put it towards an education or a home of your own.

Let's look at a scenario where saving $18,000 in one year would be possible. You live alone in an apartment with rent costing $700. You skimp on everything you can including no cable or internet, you only eat Ramen noodles, you never go out, and you save every penny you can get your hands on. You make a healthy $35,000 a year paying about 20% in taxes making your after tax income about $28,000 a year. If after rent of $8,400 a year can survive on $1,600, then sure, you can afford an $18,000 car?

Technically yes, but who can honestly live like that and not go insane? If you are making six figures consistently, buying a car in a year could probably happen. For everyone else, give yourself a few more years to save and you can get the car of your dreams.

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