At what age, income, and NW would you buy a $50k car?

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rec7
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Re: At what age, income, and NW would you buy a $50k car?

Post by rec7 » Mon Dec 26, 2016 5:25 pm

johnny wrote:
rec7 wrote:
johnny wrote:
rec7 wrote:
johnny wrote:
I have an '07 Camry that's a V6 -- 268 hp. Are you saying that's a Lexus engine?
Toyota uses the 3.5 V6 in the Camry and Lexus.
Hmmm... how 'bout the Avalon? I think that's got a 268 hp engine.
Same engine they use it in several models.
OK, thanks. It's good to know I've got a Lexus engine, if not a Lexus itself. 8-)
I guess you can call it a Toyota engine or a Lexus engine depending if you wanted to act rich or average. Same V6
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Re: At what age, income, and NW would you buy a $50k car?

Post by countofmc » Mon Dec 26, 2016 5:29 pm

johnny wrote:
rec7 wrote:
johnny wrote:
rec7 wrote:
johnny wrote:
I have an '07 Camry that's a V6 -- 268 hp. Are you saying that's a Lexus engine?
Toyota uses the 3.5 V6 in the Camry and Lexus.
Hmmm... how 'bout the Avalon? I think that's got a 268 hp engine.
Same engine they use it in several models.
OK, thanks. It's good to know I've got a Lexus engine, if not a Lexus itself. 8-)
If your Avalon is a 2013 or newer, that thing basically IS a Lexus, to be more precise a Lexus ES350. I believe they share the same powertrain and basic architecture. And looks like recently they even moved ES350 production to Kentucky alongside Avalon production:

http://www.kentucky.com/news/politics-g ... 46299.html

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Re: At what age, income, and NW would you buy a $50k car?

Post by Rodc » Mon Dec 26, 2016 5:29 pm

soupcxan wrote:There's a lot of folks here who would never buy a new car, let alone one for $50k. It's a depreciating asset.

But for those that would consider it, under what financial conditions would you do it? Hypothetically, if you were 35, had household income of $400k, and $2M NW, would you drop $50k on a car? What if you were 45?
Under those conditions I might. I can't say as I know what exactly $50K buys these days.
We live a world with knowledge of the future markets has less than one significant figure. And people will still and always demand answers to three significant digits.

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Re: At what age, income, and NW would you buy a $50k car?

Post by FrugalInvestor » Mon Dec 26, 2016 5:30 pm

TheTimeLord wrote:
FrugalInvestor wrote:I purchased a $40K car once. It would probably equate to $50K or more today. It was a very nice car but had more mechanical problems than any other car I've ever owned. It was also more expensive to repair and the dealer very resistant to fixing problems under warranty. I'll never purchase another high-end vehicle.
Best dealers in our area are Lexus dealers and the other in that dealer family. Near legendary customer service. On the other hand BMW dealers in particular have low ratings, similar but not quite as bad for the Audi and Mercedes dealers.
In my case it was an Audi dealer. A few years later I owned a Lexus which was probably the best vehicle I've ever owned. However, other than warranty work (which was next to nothing) I always had it serviced at the Toyota dealer. Lexus charged about double Toyota for the same service and I don't need my ego massaged.
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Re: At what age, income, and NW would you buy a $50k car?

Post by mdba73 » Mon Dec 26, 2016 5:42 pm

sambb wrote:I always wonder in these threads what someone would say if you wrote the same income and NW but Asked if you could afford donating 25k to 50k to a charity.
I always do but not for those values. I feel great when I write those tiny 4 digit checks to my local food bank or my kids' school library.

But at the same time I could not convince myself that a 750 payment for a iPhone 7 is worth spending. I am quite happy with my 200$ Nexus 5.

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Re: At what age, income, and NW would you buy a $50k car?

Post by aquafit2 » Mon Dec 26, 2016 5:44 pm

I am a big fan of Lexus automobiles! 3 years ago my husband decided he really wanted a Lexus GX460. We went and test drove one. He loved it but, just couldn't wrap his mind around spending $58K on a car. He was planning to own this car for 10 years. So we went to the Toyota dealership and test drove a loaded 4runner. It was $10K less than the Lexus. Before he made his decision I told him to research the price difference between a 10 year old Lexus and 10 year old 4runner, Guess what...it was $10K. So he decided he would buy the Lexus and enjoy all the luxurious features and in the end he will be in about the same place. I say, if you can afford the nicer car, and that is something that will make you happy, do it! Lexus makes a fine automobile and I have owned one for 11 years and never had a single problem.

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Re: At what age, income, and NW would you buy a $50k car?

Post by nisiprius » Mon Dec 26, 2016 6:00 pm

I would buy one if I wanted one and if I could afford it.

For heaven's sake... what's the point of having money if you're not allowed to spend it?

The first car I ever bought was very plain, sensible car--but it cost 61% of my annual income at the time. I had to move to a cheaper apartment. I'm not at all sorry, it was a good car and served me well for 10 years and 100,000 miles which wasn't too shabby for a 1968 car.
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investingdad
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Re: At what age, income, and NW would you buy a $50k car?

Post by investingdad » Mon Dec 26, 2016 6:02 pm

I think the OP is in fine shape...but he didn't give his cash flow.

400k is great, but not if you have 300k expenses.

Just consider appearances. There's a guy in my office that bought a 130k car and he dresses like he's in financial straits despite being a senior engineer. It looks pretty ridiculous.

MOBY DICK
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Re: At what age, income, and NW would you buy a $50k car?

Post by MOBY DICK » Mon Dec 26, 2016 6:11 pm

Many moons ago I wanted a GTO (when they were $ 8000.00 for a show quality example ) and I casually mentioned this to a fellow I knew. He commented that it was just a hunk of iron. Without realizing it he did me the biggest favor and I did not pursue the vehicle. Yes, I do realize they have increased quite nicely in value but after storage and maintenance is factored high end vehicles are never really worth it. Just don't tell anyone as it may drive our index funds down a bit. Drive the best vehicle for the money... showcasing a high end vehicle to people that know better is a fool's errand. It really doesn't impress anyone and just exhausts your life's energy ( Millionaire Next Door ).

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Re: At what age, income, and NW would you buy a $50k car?

Post by FlyingMoose » Mon Dec 26, 2016 6:24 pm

I'd pay that for a self-driving car. I'm unable to drive because of my vision, and it would be my first car.

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Re: At what age, income, and NW would you buy a $50k car?

Post by harikaried » Mon Dec 26, 2016 6:34 pm

soupcxan wrote:the truly useful function would be a self-driving car, but that will start around $100k from Tesla next year
Tesla Model 3 with self-driving capabilities enabled should be ~$36k after incentives next year, but the interesting twist would be that the car could potentially make money for you while you aren't using it effectively reducing the purchase price. Also with self-driving cars, the answer for when to buy a $50k car might be "never" for most people in a decade.

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Re: At what age, income, and NW would you buy a $50k car?

Post by NYCguy » Mon Dec 26, 2016 6:47 pm

The Wizard wrote:
Dottie57 wrote:No, I would not. Wait till ypu hit $10m. In investments, not net worth. Then drive what you want.
$10M is a lot.
OP could be dead by then...
:(
When I had that income and net worth profile I always chose to buy CPO luxury cars around that price point. I probably could've afforded whatever I wanted but I couldn't justify the steep depreciation on new vehicles.

When my net worth crossed $10 M I developed a serious Porsche habit. They were the first two new cars I purchased. I have never looked to impress anybody. I just LOVE the cars.

In middle-age I am going through a bit of a transformation and learning how to enjoy my material success. :happy
If your out-go is greater than your income, your upkeep will be your DOWNFALL.

Tamales
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Re: At what age, income, and NW would you buy a $50k car?

Post by Tamales » Mon Dec 26, 2016 6:56 pm

There must be something you're not telling us because at 35 (or 45 for that matter), $400k income, $2M NW I'm not sure why you're even asking.
Only if you have huge debt or really high living expenses and 10 kids, or some life-changing event on the horizon, might there be a question.

Also, there are a lot of seemingly mundane vehicles that can exceed $50k with options so that's not what I'd call an extravagant vehicle.

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gunn_show
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Re: At what age, income, and NW would you buy a $50k car?

Post by gunn_show » Mon Dec 26, 2016 7:01 pm

Billionaire wrote:Don't listen to any party poopers. Buy the car. NW and yearly income alone makes it a no brainer.
Agree. A lot of opinions and anecdotes in here, but few answer the direct question/scenario with a relative answer. If this is your age and financial situation, you can easily afford the car without question. The why's and if's and doomsday scenarios can all follow after. If your expenses are low enough you could cash flow it in months probably.

I just bought a used Lexus (GX 470) and love it. I am super sold on the luxury aspect to it (life long Honda + Toyota owner), as well as the awesome v8 AWD capabilities for snow hauling. I think if you looked 2-3 years off-lease you could probably score a very nice Lexus for cheaper with 20-30k miles and an extended warranty. Although, nothing beats new car and new car smell, etc. You can afford any scenario you want here really. Enjoy.
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gunn_show
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Re: At what age, income, and NW would you buy a $50k car?

Post by gunn_show » Mon Dec 26, 2016 7:03 pm

NYCguy wrote:
The Wizard wrote:
Dottie57 wrote:No, I would not. Wait till ypu hit $10m. In investments, not net worth. Then drive what you want.
$10M is a lot.
OP could be dead by then...
:(
When I had that income and net worth profile I always chose to buy CPO luxury cars around that price point. I probably could've afforded whatever I wanted but I couldn't justify the steep depreciation on new vehicles.

When my net worth crossed $10 M I developed a serious Porsche habit. They were the first two new cars I purchased. I have never looked to impress anybody. I just LOVE the cars.

In middle-age I am going through a bit of a transformation and learning how to enjoy my material success. :happy
Saw this reply from NYCguy after my post. Concur with his CPO luxury car idea, was where I was going with my response.

And his 2nd part (Porsches) is where I plan to go when my NW gets high enough 8-) 8-)
"The best life hack of all is to just put the work in and never give up." Bas Rutten

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Re: At what age, income, and NW would you buy a $50k car?

Post by danaht » Mon Dec 26, 2016 7:14 pm

I would never buy a car for $50,000 unless:

1) The USA had runaway inflation - and cars that were selling for $12,000 in 2016 are now selling for $50,000 in 20XX. Of course I might be so old by then that I might not be able to drive by that time - or it won't matter since car's will all self drive by then. With health costs sky rocketing lately - this could happen sooner rather than later. I just received a letter that my health insurance is being canceled in July 2017. Shopping around tonight - if i had to buy an equivalent plan today - my insurance would go from $250 a month to $450 a month. Yikes!

or

2) Someone offered me a car for $50,000 and I knew that I could turn around and sell it for $75,000. Hence - I would only buy a car this expensive if I could do it for additional income.
Last edited by danaht on Mon Dec 26, 2016 7:24 pm, edited 1 time in total.

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Re: At what age, income, and NW would you buy a $50k car?

Post by soupcxan » Mon Dec 26, 2016 7:24 pm

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Last edited by soupcxan on Fri Jan 19, 2018 4:40 pm, edited 1 time in total.

sbaTexas
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Re: At what age, income, and NW would you buy a $50k car?

Post by sbaTexas » Mon Dec 26, 2016 7:36 pm

So you are in the top 1% net worth for your age, have a top 1% income for your age, and save $200k per year and honestly asked this question?

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Re: At what age, income, and NW would you buy a $50k car?

Post by sambb » Mon Dec 26, 2016 8:46 pm

gunn_show wrote:
NYCguy wrote:
The Wizard wrote:
Dottie57 wrote:No, I would not. Wait till ypu hit $10m. In investments, not net worth. Then drive what you want.
$10M is a lot.
OP could be dead by then...
:(
When I had that income and net worth profile I always chose to buy CPO luxury cars around that price point. I probably could've afforded whatever I wanted but I couldn't justify the steep depreciation on new vehicles.

When my net worth crossed $10 M I developed a serious Porsche habit. They were the first two new cars I purchased. I have never looked to impress anybody. I just LOVE the cars.

In middle-age I am going through a bit of a transformation and learning how to enjoy my material success. :happy
Saw this reply from NYCguy after my post. Concur with his CPO luxury car idea, was where I was going with my response.

And his 2nd part (Porsches) is where I plan to go when my NW gets high enough 8-) 8-)

Right on! I have owned a porsche - incredible car for sure! Will probably get another one in the future.
For the OP, you can probably afford nicer than a 50k car. Have fun with it. You deserve it!

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Re: At what age, income, and NW would you buy a $50k car?

Post by gator15 » Mon Dec 26, 2016 9:01 pm

With that income and NW I wouldn't think twice. I've never bought a $50k vehicle but I've had three vehicles which cost in the mid $40k range. Two of the vehicles were sports cars while one was a fully equipped SUV. No regrets on any of the purchases. I have no desire to wait till I'm 60 yrs old and have a NW of $10 million to purchase as car at that price point. My income and NW are nowhere near your example but I still believe I'm saving a good amount of money so I don't mind spending money on cars. If you can afford it, get it. You only live once.

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Re: At what age, income, and NW would you buy a $50k car?

Post by bds3 » Mon Dec 26, 2016 9:33 pm

Barring disaster, in 5 years (at age 35) I will have well more that $400K income, but less than that $2M NW, and no debt but mortgage. I will absolutely buy a $50K car. In another 5-8 years when I have a good chunk--if not all--of kids' college paid for, my next car will be in the range of $80-$100K today's dollars.

I love cars. But I'm new to this site and may change my mind when I'm looking at my retirement accounts all the time.

So I'm not the person you should be looking to for advice, but if you like cars, what's the point of saving money if you can't spend it when you determine it is reasonable to do so?

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Re: At what age, income, and NW would you buy a $50k car?

Post by hawkfan55 » Mon Dec 26, 2016 9:54 pm

Yes, we just bought a new vehicle and financed the entire purchase at 0% interest. Payment = $1,505 per month for 36 months, more than our mortgage! We could have paid cash for it, however, the manufacturer offered 36 mo at 0% interest. The price was the same whether I decided to take the 0% interest or pay cash. Best of all, it is from an American manufacturer! We are late 50s, early 60s with only about $100k income (partly retired) and a net worth sufficient to support this payment. Most vehicles with desired features approach or are over 30k. We wanted a nice suv/crossover for travel and are looking forward to some nice road trips! :happy
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Re: At what age, income, and NW would you buy a $50k car?

Post by TPT » Mon Dec 26, 2016 10:51 pm

It's surprising that this discussion hasn't included the phrase "status symbol" (unless I missed it). My perception is that people who buy middling models from luxury carmakers are often more concerned about showing they've made it than about the driving experience (this pressure is particularly strong in certain cultures, I think). This is one of many reasons we consciously avoided living around our "economic peers" - no pressure to display wealth or keep up with the neighbors.

I've been thinking about getting a bumper sticker that says, "I'll think of your luxury car when I retire early."

Edit: For me, BTW, it'd be 50+, $0 (retired), and ~$10M, and I'd buy something that other people would enjoy seeing on the road - maybe a shelby Cobra (a lot more than 50k today).
Last edited by TPT on Mon Dec 26, 2016 11:35 pm, edited 1 time in total.

investingdad
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Re: At what age, income, and NW would you buy a $50k car?

Post by investingdad » Mon Dec 26, 2016 11:03 pm

gator15 wrote:With that income and NW I wouldn't think twice. I've never bought a $50k vehicle but I've had three vehicles which cost in the mid $40k range. My income and NW are nowhere near your example but I still believe I'm saving a good amount of money so I don't mind spending money on cars. If you can afford it, get it. You only live once.
Easy to say, but if you work your way to that point by smart decision making suddenly dropping a bunch of money on a car is a big shift in thinking.

We are mid 40s, and while our income is "only" upper 200s, our net is the same as the OP with similarly good cash flow.

I struggled with spending 30k for my wife's car this year. It's a lot of money when you're used to spending in the 20s.

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Re: At what age, income, and NW would you buy a $50k car?

Post by Wildebeest » Mon Dec 26, 2016 11:34 pm

I have never bought a $ 50 K car( I am not a car guy). I bought a $ 33 K Subaru Forester in 2013. If you have the money, and can pay cash for it and it makes you happy, you should buy what lights your fire.

Buying the $ 33 K Subaru Forester did not make me happy. The only car which made me happy was buying a Peugeot 505 STI many years ago. The engine block burst and looking back, I should have bought a new engine (I am not a car guy).

However buying the Subaru may make me happy if I still drive it in 10 years and it definitely will make me happy if I still drive it in 15 years.
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Re: At what age, income, and NW would you buy a $50k car?

Post by Hawaiishrimp » Mon Dec 26, 2016 11:37 pm

If you have around $3 millions net worth, I think it's probably okay to spend $50k for a car. If you have significantly less, then probably not a good idea. Just my opinion.
I save and invest my money, so money can make money for me, so I don't have to make money eventually.

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Re: At what age, income, and NW would you buy a $50k car?

Post by goldendad » Mon Dec 26, 2016 11:39 pm

I would spend 50k+ on a collector car (ex. - 65 Shelby Mustang, etc.) if I had a place to keep it, enjoyed driving it, and was fairly sure it would hold its value. So far my most expensive car cost 26k - new 2013 Honda CR-V.

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Re: At what age, income, and NW would you buy a $50k car?

Post by Artsdoctor » Mon Dec 26, 2016 11:53 pm

This sounds like a "Can I afford it?" Suze Orman show.

What are your income and expenses?

Of course there are situations when you can buy a $50,000 car! But you didn't give us enough information about where you stand with retirement goals, insurance, family provided for, etc., etc., etc.

Your income and net worth are just pieces of the puzzle. You can't even buy a Civic if you're earning $1M a year and spending $1.1M.

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Re: At what age, income, and NW would you buy a $50k car?

Post by KPG » Tue Dec 27, 2016 12:34 am

Where are you people finding these $50k Lexus at? We just got a price on a Chevy Traverse and a Ford Flex and they were $42k!

KPG

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Re: At what age, income, and NW would you buy a $50k car?

Post by msk » Tue Dec 27, 2016 1:34 am

Some 50 years ago I came across two rules-of-thumb: Do not buy a house to live in that costs more than 3 years' income. Do not buy a car that costs more than 6 months income. Leasing was not mass market then, though buying by instalments was available widely. Worked well for me. Got my first luxury car, for cash, at age 37; top of the range Mercedes Coupe. That's serious splurging. The equivalent today goes for $160k+.

My current attitude after 50 years' experience: Cars are a consumable, rapidly depreciating asset. Don't even consider going upmarket unless you can pay for it cash. All discretionary-luxury items should be paid for in cash (Toys! Even a luxury home is basically a toy, perhaps for DW; the Ferrari is for the hubby. BH attitudes have nothing to do with purchasing toys). With a cash purchase you quickly forget how much you paid for it and simply enjoy whatever it is that drove you into that choice :beer

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Re: At what age, income, and NW would you buy a $50k car?

Post by travellight » Tue Dec 27, 2016 3:39 am

I tend to save first, and then spend. The most I have paid for a car is 32k for a used Jaguar xj8. I paid 25k for my current car, a used Cadillac STS. Once all my mortgages are paid off, I will splurge on a car since I will have band width with no mortgages to pay... and I love cars. I was ready to splurge on a used Maserati about 5-8 years ago for about 50k but the salesman blew the deal. My financial side is thankful to him. I am 50+ with higher income and NW than the OP.

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Re: At what age, income, and NW would you buy a $50k car?

Post by dziuniek » Tue Dec 27, 2016 9:12 am

Wildebeest wrote:I have never bought a $ 50 K car( I am not a car guy). I bought a $ 33 K Subaru Forester in 2013. If you have the money, and can pay cash for it and it makes you happy, you should buy what lights your fire.

Buying the $ 33 K Subaru Forester did not make me happy. The only car which made me happy was buying a Peugeot 505 STI many years ago. The engine block burst and looking back, I should have bought a new engine (I am not a car guy).

However buying the Subaru may make me happy if I still drive it in 10 years and it definitely will make me happy if I still drive it in 15 years.
A base Subaru Forester in 2013 could've been had for $ 21k. If you paid 12 grand more, I wouldn't be happy either. ]

4 leather seats and 2 more speakers aren't worth 12k to me.

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Re: At what age, income, and NW would you buy a $50k car?

Post by ljb1234 » Tue Dec 27, 2016 9:25 am

I would say first, don't buy any *new* car unless your net worth is $1M. Buy late model used instead.

As for $50K??, I would say if you can pay cash without affecting your emergency fund, then OK. It is a waste of money, of course. Age??? Not sure it matters, but I would wait until 45 or so.

My last car was a premium late model CPO, but I paid just under $30K (cash) and still have second thoughts. It is a great car, though.

This week is a good time to buy a car... End of month/quarter/year for dealership.

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Re: At what age, income, and NW would you buy a $50k car?

Post by Tamales » Tue Dec 27, 2016 9:27 am

Artsdoctor wrote:This sounds like a "Can I afford it?" Suze Orman show.
Actually, that might be a good way for the OP to better understand some of the other factors that come into consideration. While the show is no longer on, segments of the show are archived at CNBC, here: http://www.cnbc.com/suze-orman-show/?page=1

here are a couple "can I afford it" segments about cars or other big ticket items:

http://video.cnbc.com/gallery/?video=3000355670
http://video.cnbc.com/gallery/?video=3000313677
http://video.cnbc.com/gallery/?video=3000278120

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Re: At what age, income, and NW would you buy a $50k car?

Post by livesoft » Tue Dec 27, 2016 9:43 am

Another way to decide from this post back in 2012:
livesoft wrote:As I've mentioned before, my metric is the amount our portfolio goes up or down on a single day. One can pick a typical "really good" or "really bad" day if you want to for that single day. This gives one the amount of "noise" in one's net worth, so any toy requiring that much money is just lost in the noise of net worth. And one can only spend this amount annually (not every week!).

So if your portfolio has gone up or down by $50,000 in a single day in the past 6 months, feel free to buy something for $50,000 without guilt.
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Re: At what age, income, and NW would you buy a $50k car?

Post by investingdad » Tue Dec 27, 2016 9:52 am

livesoft wrote:Another way to decide from this post back in 2012:
livesoft wrote:As I've mentioned before, my metric is the amount our portfolio goes up or down on a single day. One can pick a typical "really good" or "really bad" day if you want to for that single day. This gives one the amount of "noise" in one's net worth, so any toy requiring that much money is just lost in the noise of net worth. And one can only spend this amount annually (not every week!).

So if your portfolio has gone up or down by $50,000 in a single day in the past 6 months, feel free to buy something for $50,000 without guilt.
I should share this with my wife. Our biggest single day variations are in the 18k range and my next toy is 5k.

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Re: At what age, income, and NW would you buy a $50k car?

Post by midareff » Tue Dec 27, 2016 10:10 am

soupcxan wrote:There's a lot of folks here who would never buy a new car, let alone one for $50k. It's a depreciating asset.

But for those that would consider it, under what financial conditions would you do it? Hypothetically, if you were 35, had household income of $400k, and $2M NW, would you drop $50k on a car? What if you were 45?

If your hypothetical conditions were met that person should be on the way to the dealer. I did it at age 50 with a much lower NW and income. I had strict annual savings goals and once they were met the rest was (IMHO) available for toys and travel.

LarryAllen
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Re: At what age, income, and NW would you buy a $50k car?

Post by LarryAllen » Tue Dec 27, 2016 10:25 am

rec7 wrote: For about 28k they put a Lexus engine in the carmy. Something to think about.

However, not Lexus sound deadening (huge benefit of luxury cars), Lexus stereo, etc.... The reason people buy a luxury car is for a multitude of reasons with engine being one factor. A Lexus really is more than an expensive Toyota. It really is a nicer car. Is it worth it to everybody? No, of course not.

Ervin
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Re: At what age, income, and NW would you buy a $50k car?

Post by Ervin » Tue Dec 27, 2016 10:51 am

dziuniek wrote:
Wildebeest wrote:I have never bought a $ 50 K car( I am not a car guy). I bought a $ 33 K Subaru Forester in 2013. If you have the money, and can pay cash for it and it makes you happy, you should buy what lights your fire.

Buying the $ 33 K Subaru Forester did not make me happy. The only car which made me happy was buying a Peugeot 505 STI many years ago. The engine block burst and looking back, I should have bought a new engine (I am not a car guy).

However buying the Subaru may make me happy if I still drive it in 10 years and it definitely will make me happy if I still drive it in 15 years.
A base Subaru Forester in 2013 could've been had for $ 21k. If you paid 12 grand more, I wouldn't be happy either. ]

4 leather seats and 2 more speakers aren't worth 12k to me.
Couldn't agree more.

I have a base Camry and a fancy Avalon hybrid. The latter cost me $15K extra and is a great car, just a really bad value. I smile every time I drive my Camry LE and get everything I really need, even if it's 80-90% of the Avalon experience. I will never buy another expensive car.

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Re: At what age, income, and NW would you buy a $50k car?

Post by Hikes_With_Dogs » Tue Dec 27, 2016 11:08 am

Hawaiishrimp wrote:If you have around $3 millions net worth, I think it's probably okay to spend $50k for a car. If you have significantly less, then probably not a good idea. Just my opinion.

The average price of a new car in 2016 is around $35k. Median household income is ~56k. So most people spend a little less than their annual income. Using that logic, you are definitely in the clear. Spending around 40% more for what you want seems reasonable in the context presented (NW, etc).

I have to laugh at the idea of having 3MM net worth to spend that sort of money on a car, especially when less than 3% of the US population have that sort of net worth. That said, obviously there are a lot of people buy cars at 50k and more, but that doesn't mean you should join the lemmings.

I don't disagree with the bottom line of: NO. Obviously you can afford it, but I don't see any compelling reason in the posts that indicate you need a 50k car. I'm not a car person either, so I wouldn't. I'm perfectly happy with my couple year old used Hondas and Toyotas. However, I can see good reasons to needing or wanting a nicer car; but none presented here.

SleepKing
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Re: At what age, income, and NW would you buy a $50k car?

Post by SleepKing » Tue Dec 27, 2016 11:14 am

If you are hypothetically saying the buyer has:

-$2 million net worth
-No additional debt (assumption)
-stable income approaching mid-six figures
-desire to treat themselves to a luxury car

Sure. Go for it if that's your thing. You can get a real nice F-150 truck or 4-Runner for that!

NoGambleNoFuture
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Re: At what age, income, and NW would you buy a $50k car?

Post by NoGambleNoFuture » Tue Dec 27, 2016 11:20 am

soupcxan wrote:There's a lot of folks here who would never buy a new car, let alone one for $50k. It's a depreciating asset.

But for those that would consider it, under what financial conditions would you do it? Hypothetically, if you were 35, had household income of $400k, and $2M NW, would you drop $50k on a car? What if you were 45?
At 2mm and 400k annual I'd likely buy that lambo I've been telling my girl I was going to be purchasing...

hirlaw
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Re: At what age, income, and NW would you buy a $50k car?

Post by hirlaw » Tue Dec 27, 2016 11:22 am

For heaven's sake... what's the point of having money if you're not allowed to spend it?
Agree! Although, I have 1 qualification. Only buy it if paying with cash doesn't hurt.

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Re: At what age, income, and NW would you buy a $50k car?

Post by Dulocracy » Tue Dec 27, 2016 12:23 pm

soupcxan wrote:There's a lot of folks here who would never buy a new car, let alone one for $50k. It's a depreciating asset.

But for those that would consider it, under what financial conditions would you do it? Hypothetically, if you were 35, had household income of $400k, and $2M NW, would you drop $50k on a car? What if you were 45?
At that new worth, income level, and age, I would be comfortable with a $30-35k automobile, regardless of age. I am admittedly not a car person, but one can get quite a bit more comfort rising from the 20-25k range to the 30-35k range. After that, I would feel like I was taking money out of my pursuit of a magical number that will allow me to retire. For me, the extra car would not be worth the ABILITY to retire earlier (I say ability, as I likely will not retire for a long time after I am able, as I like what I do).
I'm not a financial professional. Post is info only & not legal advice. No attorney-client relationship exists with reader. Scrutinize my ideas as if you spoke with a guy at a bar. I may be wrong.

dziuniek
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Re: At what age, income, and NW would you buy a $50k car?

Post by dziuniek » Tue Dec 27, 2016 12:27 pm

Ervin wrote:
dziuniek wrote:
Wildebeest wrote:I have never bought a $ 50 K car( I am not a car guy). I bought a $ 33 K Subaru Forester in 2013. If you have the money, and can pay cash for it and it makes you happy, you should buy what lights your fire.

Buying the $ 33 K Subaru Forester did not make me happy. The only car which made me happy was buying a Peugeot 505 STI many years ago. The engine block burst and looking back, I should have bought a new engine (I am not a car guy).

However buying the Subaru may make me happy if I still drive it in 10 years and it definitely will make me happy if I still drive it in 15 years.
A base Subaru Forester in 2013 could've been had for $ 21k. If you paid 12 grand more, I wouldn't be happy either. ]

4 leather seats and 2 more speakers aren't worth 12k to me.
Couldn't agree more.

I have a base Camry and a fancy Avalon hybrid. The latter cost me $15K extra and is a great car, just a really bad value. I smile every time I drive my Camry LE and get everything I really need, even if it's 80-90% of the Avalon experience. I will never buy another expensive car.
They were worth it to my wife in her Outback though! :twisted:

I think she's coming around with the next purchase though.

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Re: At what age, income, and NW would you buy a $50k car?

Post by edge » Tue Dec 27, 2016 1:32 pm

Ya, why not?
soupcxan wrote:There's a lot of folks here who would never buy a new car, let alone one for $50k. It's a depreciating asset.

But for those that would consider it, under what financial conditions would you do it? Hypothetically, if you were 35, had household income of $400k, and $2M NW, would you drop $50k on a car? What if you were 45?

inbox788
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Re: At what age, income, and NW would you buy a $50k car?

Post by inbox788 » Tue Dec 27, 2016 3:04 pm

This isn't really logical, but if I had a million dollars, I wouldn't spend 5% of it on a car. However, if I had $1.05 million, I'd consider taking the rounding error and spend it. Also, 5% isn't an unreasonable expectation for returns, though after tax return of 5% is more difficult. This all assumes I'm young enough and still making income. Once retired, I might have higher thresholds, and if I should be fortunate enough to live past 80 or 90, and I would be spending someone else's monies, then the threshold might come down again.
Hikes_With_Dogs wrote:...there are a lot of people buy cars at 50k and more, but that doesn't mean you should join the lemmings.

I don't disagree with the bottom line of: NO. Obviously you can afford it, but I don't see any compelling reason in the posts that indicate you need a 50k car. I'm not a car person either, so I wouldn't. I'm perfectly happy with my couple year old used Hondas and Toyotas. However, I can see good reasons to needing or wanting a nicer car; but none presented here.
Additionally, not all $50k cars area like. Do you count a 5 year old pre-owned lexus that originally costs over $50k, but you can now buy for $20-30k? Which is in the price range for many a new Toyota. And the actual cost and cost difference a year may be a lot less. Say $5,000 per yer over 10 years plus low percentage interest, so you're only talking about $2-3k/year difference in depreciation, and may be less if you compare to high depreciation cars. If you were to buy a $55k lexus and sell it 5 years later for $30k, it costs you $5k/year. But if you buy a $35k Jeep or Ford and can only sell it for $15k, you cost is $4k/year.

There's also the economy of holding on the a car for longer periods, so what costs more, a Lexus over 10 years or buying a Toyota every 5? I'd guess it comes out close to even, with repair costs being a wildcard.

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Re: At what age, income, and NW would you buy a $50k car?

Post by orca91 » Tue Dec 27, 2016 3:22 pm

With that net worth and income, I'd buy three of em.

But I'm a car guy and enjoy spending money that way. On the other hand, I'd NEVER buy a $5000 watch or $15k piano as I've seen brought up on BH. To each their own, I say. Spend some money on things you enjoy, don't just spend needlessly, and I bet we would all be fine.

Personally, I think some bogleheads have a little too tight a grip on their money. Enjoy life a little. :happy

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Re: At what age, income, and NW would you buy a $50k car?

Post by 2Birds1Stone » Tue Dec 27, 2016 3:31 pm

I plan on buying a $50k car in ~2-3 years.

2015-2016 z06 =)

My NW will be ~400-500k and income ~$150-200k.

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HomerJ
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Re: At what age, income, and NW would you buy a $50k car?

Post by HomerJ » Tue Dec 27, 2016 3:50 pm

soupcxan wrote:There's a lot of folks here who would never buy a new car, let alone one for $50k. It's a depreciating asset.

But for those that would consider it, under what financial conditions would you do it? Hypothetically, if you were 35, had household income of $400k, and $2M NW, would you drop $50k on a car? What if you were 45?
What are your expenses?

$400k income, $2 million NW, with $300k expenses is VERY different from $100k expenses.

If you're shooting for $10 million at retirement in 20 years, $2 million is just a good start.
If you're shooting for $4 million at retirement in 20 years, $2 million is rock solid, and you can splurge a little.

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