Car Advertisements Don't Tell You How Much You'll Really Be Paying

Car advertisements. They have been a bone of contention with me for many years, especially when I see and hear statements along the lines of, '... now it can be yours for less than $20,000.00. "Nimbus Sports Senata"... take the ride to freedom!' (or some such similar nonsense)' and yes I know there's no such car as a 'Nimbus Sports Senata' although come to think of it, it is a pretty cool name. Anyway, I'm getting off track here. Let's see how much a $20,000.00 car is really going to cost you out of your hard earned wages? Here are some things you might want to consider before you and your wallet decide to make that $19,999.99 purchase after having watched those happy smiley people driving improbably around the empty streets of Manhattan. Yeah, good luck with that!

1: First off, let's throw on the tax to our $19,999.99 purchase shall we. Current tax in New York being about 8.75% that brings our 'Nimbus!' up to $21,749.99. So right away, we have gone from spending under $20 grand to spending almost $22 grand.

2: Let's say that you make $40,000.00 per year, which is a normal wage for a great many people looking for an affordable family car. Of that $40,000.00 how much of those wages do we actually get to see after Tax's (State & Federal) /Medicare/Social Security/Medical/Dental/Vision/401K etc. and so on are taken out. I think it's fair to say that you'll actually see about 65% of your post-taxed income...if you're lucky. Although with the cost of some companies health coverage's nowadays this figure could be down to 60%. Now this is actual real money that you have at your disposal to spend after all the deductions. So that means that in real terms, of your $40,000.00 wage you are seeing approx. $26,000.00 spend able income.

3: So now we have gone from that happy joyful advertising implication that you are getting a $20,000.00 (I'm sorry $19,999.99, it is under 20 grand after all!)... car for only about 50% of your annual $40,000.00 wage to the reality that after you've added tax to the cost of the car and removed all your tax/401k etc. from your pay-packet, that you have in reality an almost $22,000.00 car costing you approx 85% of your $40,000.00 annual pay. It's certainly a big difference and should really make you reassess your finances with a more critical eye before splurging on that wondrous automobile of your dreams. Also, please don't get waylaid by any of those last second, 'with nothing to pay till Jan 2008' lines that they throw out at the end of some of these ad's. If you can't afford it now you more than likely won't be able to afford it then either. As always, buyer beware.