Buying a luxury car (how dumb would it be to do this?)

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tomservo14
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Buying a luxury car (how dumb would it be to do this?)

Post by tomservo14 » Wed May 03, 2017 11:35 am

I’m a long time lurker on this forum, and I finally signed up to post a question about buying a car. Apologies, I know there are a lot of these threads, and I’ve probably read every single one. Basically, I’m considering buying a new BMW X5 ($55-65K). This would be to replace a 13 year old toyota rav4. I enjoy cars, and used to spend my high school days working on my friends' camaro, and trying to keep my old hoopty running. I’ve always dreamed of having a fun car, and in particular, a BMW. I’d prefer a 3 series, but I have kids with lots of stuff. The problem is it feels a little ridiculous spending this much money on a car, so I go back and forth on how dumb this is (i.e. you only live once vs save as much as possible). Up until now, we’ve gone the honda/toyota route and keep them for 10-15 years (our other vehicle is an Odyssey). I’m 44, the wife is 42 and we have 4 kids. I’m coming here for advice. Can I afford it? My financials:

household income: ~$300K
mortgage: $620K (we have ~$210K in equity)
Debt: none

Savings
401k: ~$500K
liquid: ~$97K when we’d buy the car this summer
529s: ~$100K (our employer will pay half of the tuition for each of our kids’ college, independent of where they go)

Other relevant info:
Each year we put about $48K in retirement, $50K in non-retirement savings, and $12K in college savings each year. We’d buy the car cash, so the savings rate would be unaffected. We’re both tenured college professors, so we’ve got good job security. We started these jobs 2 year ago, and our pay increased substantially (in case you’re wondering why we don’t have more in savings). I love my job and hope to do it until I keel over, so no early retirement plans. I’m not particularly worried about lifestyle creep: we have the same furniture we had in grad school and we’re not really into luxury stuff (other than this!). Most of our costs go to daycare and kid stuff. If we don’t get the X5, we’d likely get a toyota highlander.

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Re: Buying a luxury car (how dumb would it be to do this?)

Post by bloom2708 » Wed May 03, 2017 12:41 pm

Spend $40k on the Highlander. Your future/retired self will thank you.

The BMW won't go 13 years without high costs. More insurance, specialized service, premium gas (not sure), worrying about parking/door dings, vicious depreciation.

$25k is is half a year extra retirement. :shock:
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Re: Buying a luxury car (how dumb would it be to do this?)

Post by dbltrbl » Wed May 03, 2017 12:52 pm

Life is too short. At your income level and reasonably secure job go for the luxury car. Enjoy the life along the way. Not every one is so blessed. I am assuming normal luxury vehicles Lexus, Mercedes or BMW or Tesla. Look at it this way your average Camry, Accords are around 25-30 k about 33% of annual salary for most. In your case that's around 100 k. No loans just pay cash.

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Re: Buying a luxury car (how dumb would it be to do this?)

Post by livesoft » Wed May 03, 2017 12:52 pm

Plenty of used BMW X5's for sale for under $15K. That tells me a lot. You can get 2 or three of them.
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Re: Buying a luxury car (how dumb would it be to do this?)

Post by stoptothink » Wed May 03, 2017 12:54 pm

Can you afford it? I doubt anybody is going to say no. Should you? I wouldn't, but I am one who views cars as appliances. This is a decision which isn't really about money (there is plenty).

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Re: Buying a luxury car (how dumb would it be to do this?)

Post by CoAndy » Wed May 03, 2017 12:54 pm

I say you should go for it. Though I would think long and hard to be certain that this is truly the car you want.

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Re: Buying a luxury car (how dumb would it be to do this?)

Post by AZAttorney11 » Wed May 03, 2017 12:55 pm

The X5 wouldn't be my choice, but you didn't ask that, did you? :)

Yes, you can afford the SUV. Buy it and enjoy life. The time to drive a POS is when you are young and broke. You're neither of those things.

William104
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Re: Buying a luxury car (how dumb would it be to do this?)

Post by William104 » Wed May 03, 2017 1:01 pm

Some good deals to be had on a few year old X5's that wouldn't be spending quite as much and still get you a nice vehicle. My friend just got a used one, loaded, diesel, for around 30k.

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Re: Buying a luxury car (how dumb would it be to do this?)

Post by InvestorNewb » Wed May 03, 2017 1:01 pm

How will you feel if you scratch the car? Or if somebody accidentally bumps into you? I thought about buying a luxury car but I would be too worried about it all the time. And not only that, but the car will be dated in five years from now.

The biggest "toy" that I bought was a $6,000 television when LED was new technology. I regretted it 6 months later.
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Re: Buying a luxury car (how dumb would it be to do this?)

Post by jlcnuke » Wed May 03, 2017 1:02 pm

I'm pretty sure I've posted this sentiment before, but here it is again.

You earn your money. IMO, to be responsible with it you need to:
1. Pay yourself (save and invest such that you have a reasonable chance of achieving the financial security you want at the age you would like to have it).
2. Pay for your necessities - food, utilities, housing, etc.
3. Use what's left over to establish your quality of life (which should influence how much you need to achieve #1's goal as well).

If you have the disposable income to afford it, and you wish to have the car more than you wish to use that same money for something else (better vacations, earlier retirement, fancier dinners, whatever) then spend it on the car. I'd seriously consider a 1-2 year old version like WIlliam104 discussed though. That's how I bought my BMW and my Infiniti and I was happy to have gotten them for 5-figures less than new would have cost.

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Re: Buying a luxury car (how dumb would it be to do this?)

Post by btenny » Wed May 03, 2017 1:17 pm

My BIL loves BMWs as well. He has two, a X5 and a 330i. He buys used ones with low mileage and keeps them until they get old and have 120K miles or so. He does a country wide search when he buys a used BMW. He then asks for lots of pictures and mechanical inspections done previously. He then negotiates over the telephone. If he gets a price he likes he flies out and buys the car subject to local BMW inspection. He then gets it inspected at a dealer. If all is good he finishes the purchase and drives the car back home. His kid is grown but he does have two dogs. IMO they ride hard and the seats are hard. And the X5 does not have enough space for four kids. Who is going to set on the roof?

So if I were you, I would buy a off lease or slightly used Toyota Highlander. You will like it OK and your wife and kids will love the the three rows of seats and all the storage bins and neat family features. You will love the reliability.

Good Luck.

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Re: Buying a luxury car (how dumb would it be to do this?)

Post by fantasytensai » Wed May 03, 2017 1:18 pm

I am in a similar boat. I have a decent income and I love cars. My first car was a Civic, the lease is up in November. The Boglehead in me wants to buy a used Accord and drive it to the ground, but the me in me wants to lease/buy a brand new Jaguar XE AWD fully loaded, which would be around 50k. When it's all said and done, I would probably get the Jag, which would set my target retirement back a year or so. But I will be happy.

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Re: Buying a luxury car (how dumb would it be to do this?)

Post by fittan » Wed May 03, 2017 1:19 pm

You're in good financial shape and can definitely afford the X5. You have an itch you need to scratch....go for it. At your income and savings rate, cost of ownership for the X5 is nothing when you retired. The alternative is that you'll have a pile of money during retirement and regret...spending your retirement days pondering "what if's". Or worse get the X5 when you're 65 or something (you know when you see an old guy during a corvette or porsche?)...very not cool.

I had an itch once too...wanted a BMW or Audi. Drove an Audi for 3 years and then realized what a piece of crap they are. Overly engineered, unreliable and expensive. Sold it, when back to a Toyota and couldn't be happier.

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Re: Buying a luxury car (how dumb would it be to do this?)

Post by aristotelian » Wed May 03, 2017 1:20 pm

At your income level your savings rate is not very high. Unless you are leaving out IRAs and brokerage accounts, you are nowhere near financial Independence. Until then, I would hold off.

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Re: Buying a luxury car (how dumb would it be to do this?)

Post by El Greco » Wed May 03, 2017 1:30 pm

You make the money, you save the money, so it's ok to spend some of the money. If a BMW X5 is what you're into, go for it! You only live once and you seem to be doing all the right things. I'm into cars myself and buy what I like (within reason). Unlike many of the multimillionaires on this forum, I don't consider a 15 year old Toyota Camry the "ultimate ride". :wink:

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Re: Buying a luxury car (how dumb would it be to do this?)

Post by jlcnuke » Wed May 03, 2017 1:30 pm

aristotelian wrote:At your income level your savings rate is not very high. Unless you are leaving out IRAs and brokerage accounts, you are nowhere near financial Independence. Until then, I would hold off.
A 36% savings rate is "not very high"? I guess that's one opinion. I'd say it's a very healthy savings rate myself though. For all we know, they just finished paying off multiple 6-figure school loans in the past couple years and that's why their total savings is only about 2x their household income, or their income grew dramatically in recent years or plenty of other reasons.

Personally, I'd never avoid "spending $$ on quality of life" just because financial independence was still a long way off.

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Re: Buying a luxury car (how dumb would it be to do this?)

Post by DaftInvestor » Wed May 03, 2017 1:31 pm

I think its dumb but only because I'm not into luxury cars. You might think I'm dumb for spending $20K on a single family vacation.
If you are meeting all your savings goals for retirement, kids-college, etc. then you are allowed to have an indulgence. You can afford it.

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Re: Buying a luxury car (how dumb would it be to do this?)

Post by Christine_NM » Wed May 03, 2017 1:40 pm

I vote for the Highlander. Keep the dream of a BMW alive -- do not actually buy one. At least until you own your home free and clear. That mortgage is a killer.

ETA - I mean, nothing wrong with BMW that I know of, but you probably enjoy thinking about a BMW more than you would enjoy owning it. And what would you buy for your next car?
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Re: Buying a luxury car (how dumb would it be to do this?)

Post by tomservo14 » Wed May 03, 2017 1:44 pm

Thanks, folks. It's useful to get objective opinions on this. If I go for the X5, I'm definitely going to consider used given the massive amount of depreciation.

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Re: Buying a luxury car (how dumb would it be to do this?)

Post by aristotelian » Wed May 03, 2017 1:46 pm

jlcnuke wrote:
aristotelian wrote:At your income level your savings rate is not very high. Unless you are leaving out IRAs and brokerage accounts, you are nowhere near financial Independence. Until then, I would hold off.
A 36% savings rate is "not very high"? I guess that's one opinion. I'd say it's a very healthy savings rate myself though. For all we know, they just finished paying off multiple 6-figure school loans in the past couple years and that's why their total savings is only about 2x their household income, or their income grew dramatically in recent years or plenty of other reasons.

Personally, I'd never avoid "spending $$ on quality of life" just because financial independence was still a long way off.
They may be saving 36% now but apparently they have not been. They should have more than 500k saved up with 300k income. Buying a luxury car would be contribute to lifestyle inflation.

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Re: Buying a luxury car (how dumb would it be to do this?)

Post by corn18 » Wed May 03, 2017 1:52 pm

How about a 2 year old Highlander and then buy a fun car to go with it. We were trying to decide between an X5, Cayan, Q7, Range Rover Sport to replace my wife's MDX. They were nice and all and kindof fun to drive, but still a 2.5 ton behemoth. We ended up keeping the MDX for hauler duty and added a lightly used but amply depreciated Z4 to the stable. Unless my wife is hauling kids or a lot of stuff, the Z4 is her goto car now. And I get to have some fun, too!

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corn18
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Re: Buying a luxury car (how dumb would it be to do this?)

Post by corn18 » Wed May 03, 2017 1:54 pm

aristotelian wrote:
They may be saving 36% now but apparently they have not been. They should have more than 500k saved up with 300k income. Buying a luxury car would be contribute to lifestyle inflation.
Is there something wrong with lifestyle inflation? Seems to me the BH guiding principle is live below your means. Did I miss the part of the wiki where it says lifestyle inflation is a no no if you are living below your means?

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Re: Buying a luxury car (how dumb would it be to do this?)

Post by mhalley » Wed May 03, 2017 1:55 pm

It's not dumb but it's not the most prudent thing to do. I bought new but relatively inexpensive cars for my wife and I throughout my working life. As a final splurge before retiring, I bought a new Acura and my wife bought a new X1. We both love the cars so far, but my wife had to replace tires at 14 k miles. I do not regret being frugal in cars, but am not a car guy.

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Re: Buying a luxury car (how dumb would it be to do this?)

Post by delamer » Wed May 03, 2017 1:56 pm

tomservo14 wrote:Thanks, folks. It's useful to get objective opinions on this. If I go for the X5, I'm definitely going to consider used given the massive amount of depreciation.
My husband and I like luxury cars too, but have always bought used. My current car, bought when it was about 2.5 years old, cost half of the new price.

It is not difficult to find just-off-lease luxury cars that are in excellent condition and have low mileage.

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Re: Buying a luxury car (how dumb would it be to do this?)

Post by aristotelian » Wed May 03, 2017 2:03 pm

corn18 wrote:
aristotelian wrote:
They may be saving 36% now but apparently they have not been. They should have more than 500k saved up with 300k income. Buying a luxury car would be contribute to lifestyle inflation.
Is there something wrong with lifestyle inflation? Seems to me the BH guiding principle is live below your means. Did I miss the part of the wiki where it says lifestyle inflation is a no no if you are living below your means?
No judgment at all. I would just be hesitant to pull the trigger on a luxury car in the same circumstances. If he wants to sustain a 300k income in retirement, I am not sure he is on track.

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Re: Buying a luxury car (how dumb would it be to do this?)

Post by Voltron » Wed May 03, 2017 2:20 pm

I was in a similar situation. I am putting enough away for taxable and non-taxable accounts. I always wanted to the experience of a luxury car. I had dreamed of the BMW X5, or Audi Q7/Q5.

If you are not sure if you will like your purchase for over 3 years, you can consider a lease. Yes, there are pros and cons to leasing. However,with the lease you might not spend nearly as much as the car full price, and deal with the hassle of maintenance or repairs of an older car. It can be very cheap if your commute is very close or you don't expect to drive much miles per year. I ultimately went with the Audi Q5, nearly top of the line. It is leased. I love it! Most new cars can go 50,000 miles without any mechanical breakdown so I'm not worried.

Everyday I read about being a Boglehead, makes me wonder if I should continue to lease when mine is over. Its a great way to have my luxury car experience and I can reassess down the line what I want to do next. My worry with used car is maintenance which for luxury cars can be pricey. Who knows...when my lease is up I might have to go back to my econocar I had for years.

I do think you should find a way to experience a luxury car if this was one of your goals in life, even for a couple or few years. For me, leasing for 3 years I hope will get me that experience. I kept my econo car in the garage just in case since all paid off.

One more thing...if you are not a great negotiator, use a autobroker to find you the exact care you want, and the best price possible. He will deal with the dealer. Otherwise, dealing with the dealer direclty, the dealer will try to really stack costs / options on you don't need, and you can spend 4 hours negotiating with the dealer with all the haggling, and stall techniques they do to get you impatient to close a pricey deal to get out of there.
Last edited by Voltron on Wed May 03, 2017 2:23 pm, edited 1 time in total.

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Re: Buying a luxury car (how dumb would it be to do this?)

Post by corn18 » Wed May 03, 2017 2:21 pm

aristotelian wrote:
corn18 wrote:
aristotelian wrote:
They may be saving 36% now but apparently they have not been. They should have more than 500k saved up with 300k income. Buying a luxury car would be contribute to lifestyle inflation.
Is there something wrong with lifestyle inflation? Seems to me the BH guiding principle is live below your means. Did I miss the part of the wiki where it says lifestyle inflation is a no no if you are living below your means?
No judgment at all. I would just be hesitant to pull the trigger on a luxury car in the same circumstances. If he wants to sustain a 300k income in retirement, I am not sure he is on track.
That makes sense. Agree completely. Sustaining $300k income in retirement would take a lot more savings than what the OP currently has.

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Re: Buying a luxury car (how dumb would it be to do this?)

Post by delamer » Wed May 03, 2017 2:29 pm

corn18 wrote:
aristotelian wrote:
corn18 wrote:
aristotelian wrote:
They may be saving 36% now but apparently they have not been. They should have more than 500k saved up with 300k income. Buying a luxury car would be contribute to lifestyle inflation.
Is there something wrong with lifestyle inflation? Seems to me the BH guiding principle is live below your means. Did I miss the part of the wiki where it says lifestyle inflation is a no no if you are living below your means?
No judgment at all. I would just be hesitant to pull the trigger on a luxury car in the same circumstances. If he wants to sustain a 300k income in retirement, I am not sure he is on track.
That makes sense. Agree completely. Sustaining $300k income in retirement would take a lot more savings than what the OP currently has.
They are saving $100,000 per year now and have 4 kids. Unless they intend to really ramp up their lifestyle in retirement, they won't need $300,000 then.

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Re: Buying a luxury car (how dumb would it be to do this?)

Post by tomservo14 » Wed May 03, 2017 2:40 pm

aristotelian wrote:
jlcnuke wrote:
aristotelian wrote:At your income level your savings rate is not very high. Unless you are leaving out IRAs and brokerage accounts, you are nowhere near financial Independence. Until then, I would hold off.
A 36% savings rate is "not very high"? I guess that's one opinion. I'd say it's a very healthy savings rate myself though. For all we know, they just finished paying off multiple 6-figure school loans in the past couple years and that's why their total savings is only about 2x their household income, or their income grew dramatically in recent years or plenty of other reasons.

Personally, I'd never avoid "spending $$ on quality of life" just because financial independence was still a long way off.
They may be saving 36% now but apparently they have not been. They should have more than 500k saved up with 300k income. Buying a luxury car would be contribute to lifestyle inflation.
FWIW, our savings rate has been pretty constant over the years. We just started these jobs a little under 2 years ago. Before that, we made about 40% less.

...but ultimately, Aristotlean, I get what you're saying. I came from relatively modest means, and a voice in the back of my head keeps telling me that bad things can happen, and the only thing you can do is have a financial cushion. We're not anywhere close to FI. Lucky for us, Delamar is right: almost all of our expenses are savings, mortgage, and daycare/kid activities. I don't think we'll have anywhere close to a $300K lifestyle in retirement.

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Re: Buying a luxury car (how dumb would it be to do this?)

Post by gtd98765 » Wed May 03, 2017 3:22 pm

There is plenty of science that says that shopping is more fun than owning. Maybe you should just buy the cheaper car, then keeping shopping, indefinitely, for the BMW? A lot less expensive, but the pleasure continues.

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Re: Buying a luxury car (how dumb would it be to do this?)

Post by aristotelian » Wed May 03, 2017 3:23 pm

delamer wrote: They are saving $100,000 per year now and have 4 kids. Unless they intend to really ramp up their lifestyle in retirement, they won't need $300,000 then.
Sure, I was just noting a discrepancy between the stated savings rate and the current portfolio size, lack of IRA's, etc. Combined with a relatively expensive house and the luxury car, that raised some red flags.
tomservo14 wrote: FWIW, our savings rate has been pretty constant over the years. We just started these jobs a little under 2 years ago. Before that, we made about 40% less.

...but ultimately, Aristotlean, I get what you're saying. I came from relatively modest means, and a voice in the back of my head keeps telling me that bad things can happen, and the only thing you can do is have a financial cushion. We're not anywhere close to FI. Lucky for us, Delamar is right: almost all of our expenses are savings, mortgage, and daycare/kid activities. I don't think we'll have anywhere close to a $300K lifestyle in retirement.
That is good background to know. If you feel that you can afford it, do not let me or anyone on this board hold you back. As I said, I just saw some red flags just seeing the numbers in the original post.

Do you view the $300K as stable or could it fluctuate up and down from year to year? Are you confident it won't go back down to $200K next year?

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Re: Buying a luxury car (how dumb would it be to do this?)

Post by Exodus » Wed May 03, 2017 3:40 pm

With your current income you can definitely afford it. Especially if you went the used car route. Although with luxury vehicles comes very high maintenance cost and even extra concerns, but if you are willing to pay that price then I would say this is a lifestyle choice.

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Re: Buying a luxury car (how dumb would it be to do this?)

Post by KyleAAA » Wed May 03, 2017 3:44 pm

You can so easily afford this car it's a bit ridiculous you have to ask. Go buy it.

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Re: Buying a luxury car (how dumb would it be to do this?)

Post by bottlecap » Wed May 03, 2017 3:52 pm

You can afford it.

But it IS a little ridiculous to spend that much on a vehicle, especially considering it will wipe out 2/3 of your cash savings. Assuming I had the choice, I would feel foolish having a car worth more than my savings account.

But it is not going to put you in the poorhouse given the plum gigs you have and, hey, you only live once.

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Re: Buying a luxury car (how dumb would it be to do this?)

Post by afan » Wed May 03, 2017 3:53 pm

stoptothink wrote:Can you afford it? I doubt anybody is going to say no. Should you? I wouldn't, but I am one who views cars as appliances. This is a decision which isn't really about money (there is plenty).

OK, I will say "NO, you cannot afford it"

4 kids and $12,000 per year total into college savings?????
Have you priced a year in college?
$12,000/year PER KID would be more like it.

Having been earning a good income for only a short while, the OP is behind on savings. Which does not mean "it is OK to spend a lot on a car". It means "Need to save even more aggressively to make up for the low income years".

So my advice: get a much less expensive car. A used- whatever is the normal (Toyota, Honda) functional equivalent.

Use that extra money to increase college and other savings.

To me a car is a tool for moving about. If it works safely and reliably, it makes no more sense to get a fancy one than to buy a hammer with a gold plated handle. Does it drive nails any better? No? Then don't waste money on it.

If you had the same income, were 10 years younger, had the same assets and had no kids- and no plans to have them- then it would still be a waste of money, but you could afford it. As reported in the first post- this is not even close- NO
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Re: Buying a luxury car (how dumb would it be to do this?)

Post by deltaneutral83 » Wed May 03, 2017 4:25 pm

I think the compromise is to get the car you want (BMW x5) and aim for 20-30k miles on it so a year or two used. You will get 90% of the utility at 60-65% of the cost. Those first two years of depreciation on a car like this are mind boggling.

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Re: Buying a luxury car (how dumb would it be to do this?)

Post by Mitchell777 » Wed May 03, 2017 5:00 pm

If you really want it, and you can afford it, which I believe you can, buy it. It does not matter how others view a car. Only how you view a car, this car. Others will have their own "frivolities" for lack of a better word.

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Re: Buying a luxury car (how dumb would it be to do this?)

Post by Atilla » Wed May 03, 2017 5:16 pm

I would totally go the late model used route. You'll get the vehicle you want for a LOT less money. My opinion is at your age you don't have enough $$ saved up to go buying something like that new.

I just bought a low mileage (under 25,000 miles) used Infiniti M37X for under half the original sticker of $50K plus. Ain't no way I'd consider paying for new and we're not much older than you with 2 times the assets, no kids in the house and NO MORTGAGE.
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Re: Buying a luxury car (how dumb would it be to do this?)

Post by Jack FFR1846 » Wed May 03, 2017 5:21 pm

I'm only going to point out some things. The X5 which now has a 3rd row seat appears to be how Land Rover/Ford made a 3rd row seat in the LR4. That is to say, they squished in seats just to be able to say that they have 3 rows. Both the LR4 and X5 did a great job in developing the way to fold the 3rd row out of the way so you have acceptable cargo room. But then you only fit 5 of your family of 6.

Look at the X5 with your entire family. With 4 kids, (don't know their ages), if you're bringing them to a soccer game, I don't believe there's enough room behind the 3rd seat to fit a soccer ball. Groceries? Looks to me like there's about as much room as I had in my Lotus Elise. Maybe a roof rack with one of those giant tupperware containers is the way to get around this.

Alternatives: Sorry, but I'm going to point to the Suburban/Yukon XL/Escalade family and tell you that your whole family will be much more comfortable. Add a set of grandparents to you, your wife and your 4 kids and everyone will have plenty of room. I'm not a mini van guy so am clueless on that end and if you're looking at a BMW, I doubt you want to drive one of them. A Suburban, filled with all these people still has enough room behind the 3rd seat to fit a mountain bike with the front tire removed or enough luggage for you all to drive cross country. There's serious room back there.
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gilgamesh
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Re: Buying a luxury car (how dumb would it be to do this?)

Post by gilgamesh » Wed May 03, 2017 5:54 pm

You should get the 3 series.

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Re: Buying a luxury car (how dumb would it be to do this?)

Post by jlcnuke » Wed May 03, 2017 6:29 pm

afan wrote:
stoptothink wrote:Can you afford it? I doubt anybody is going to say no. Should you? I wouldn't, but I am one who views cars as appliances. This is a decision which isn't really about money (there is plenty).

OK, I will say "NO, you cannot afford it"

4 kids and $12,000 per year total into college savings?????
Have you priced a year in college?
$12,000/year PER KID would be more like it.

Having been earning a good income for only a short while, the OP is behind on savings. Which does not mean "it is OK to spend a lot on a car". It means "Need to save even more aggressively to make up for the low income years".

So my advice: get a much less expensive car. A used- whatever is the normal (Toyota, Honda) functional equivalent.

Use that extra money to increase college and other savings.

To me a car is a tool for moving about. If it works safely and reliably, it makes no more sense to get a fancy one than to buy a hammer with a gold plated handle. Does it drive nails any better? No? Then don't waste money on it.

If you had the same income, were 10 years younger, had the same assets and had no kids- and no plans to have them- then it would still be a waste of money, but you could afford it. As reported in the first post- this is not even close- NO
I'm not going to bother responding about the question of affordability, but if you can't tell the difference between something purely utilitarian and something that can bring enjoyment I'd suggest sleeping on dirt instead of a mattress and cooking everything with a campfire for a month to see if you can remember why people are willing to spend money on things which can be replaced by something less expensive just so they can have the added comfort, convenience, etc that the additional spending can provide.

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Re: Buying a luxury car (how dumb would it be to do this?)

Post by Grt2bOutdoors » Wed May 03, 2017 6:49 pm

tomservo14 wrote:Thanks, folks. It's useful to get objective opinions on this. If I go for the X5, I'm definitely going to consider used given the massive amount of depreciation.
Your first repair bill that requires German engineered parts, come back tell us how much it cost vs. Price paid for car. Its not the upfront cost that gets you, its the back-end or deferred load! That's why you will see tons of used German luxury on the road. $$$$ - have fun driving it. Might be cheaper to lease it.
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Re: Buying a luxury car (how dumb would it be to do this?)

Post by inbox788 » Wed May 03, 2017 6:49 pm

William104 wrote:Some good deals to be had on a few year old X5's that wouldn't be spending quite as much and still get you a nice vehicle. My friend just got a used one, loaded, diesel, for around 30k.
I couldn't deal with the anxiety over $$$ maintenance and repairs. Some people have no problems, but others have many minor problems that cost $500, like window regulators. Others have problems with cooling system costing thousands. On some models, some people recommend doing a preventive overhaul which is still quite costly.

You'd have a used X5 whether you bought it used, or kept it past the warranty period.

There is an option for a 3rd row, but it's quite expensive, takes up most of the back leaving little storage space, yet doesn't provide much seating room or comfort. If you need to seat 6, it's not a good choice IMO.

Why the X5? Power and performance? Like the design? What are the competitors considered and tradeoffs? Last checked a few years ago, but other models provided better overall value.

https://cars.usnews.com/cars-trucks/ran ... ith-3-rows
aristotelian wrote:If he wants to sustain a 300k income in retirement, I am not sure he is on track.
OP, the decision is easy if you can't afford it. You can, but should you? Which makes it a dilemma.

With a 36% savings/investment rate, it's like a 200k income/expense lifestyle, and once you include mortgage payments and truly account for all savings and investments, it may be higher. And in retirement, OP my be quite comfortable living on 100k/year (much reduced taxes) and likely a paid off home, so no rent or mortgage. An X5 at this stage is unlike to derail that modest plan. On the other hand, savings could pay for a nice vacation each year or early retirement or a year around the world in retirement or something else. All great choices and sometimes hard to make.
Last edited by inbox788 on Wed May 03, 2017 7:03 pm, edited 1 time in total.

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Re: Buying a luxury car (how dumb would it be to do this?)

Post by DTSC » Wed May 03, 2017 7:02 pm

Can you afford it? - Yes

But if you have to ask "how dumb would it be to do this?" then you probably *shouldn't*

Unless your university lets your children go there for free, $100,000 for college for 4 kids just isn't enough. Barely enough for 1 kid. And as you may well know already, you chances of getting non-merit based aid is almost nil.

Just my 2 cents...

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wander
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Re: Buying a luxury car (how dumb would it be to do this?)

Post by wander » Wed May 03, 2017 7:05 pm

I say "go for it". With your income/saving level, you can afford it.

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Re: Buying a luxury car (how dumb would it be to do this?)

Post by Teague » Wed May 03, 2017 7:06 pm

Financially speaking it is idiotic of course. With that out of the way, I suggest you buy it and enjoy. 8-)
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Re: Buying a luxury car (how dumb would it be to do this?)

Post by denovo » Wed May 03, 2017 7:08 pm

corn18 wrote:How about a 2 year old Highlander and then buy a fun car to go with it. We were trying to decide between an X5, Cayan, Q7, Range Rover Sport to replace my wife's MDX. They were nice and all and kindof fun to drive, but still a 2.5 ton behemoth. We ended up keeping the MDX for hauler duty and added a lightly used but amply depreciated Z4 to the stable. Unless my wife is hauling kids or a lot of stuff, the Z4 is her goto car now. And I get to have some fun, too!

I think OP can afford it too. Like you, my only objection is the lame car. Buy a sports car!!!
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Re: Buying a luxury car (how dumb would it be to do this?)

Post by Rattlesnake » Wed May 03, 2017 7:12 pm

Life is 2 short... I say, buy the B'mer...
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Re: Buying a luxury car (how dumb would it be to do this?)

Post by TareNeko » Wed May 03, 2017 7:20 pm

tomservo14 wrote: I’d prefer a 3 series, but I have kids with lots of stuff.
You have options:
3 series wagon, or if that's small, 5 series wagon. If you still need space, roof box.

Edit: You have 4-kids... never mind my wagon suggestion. You should get a van probably.

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Re: Buying a luxury car (how dumb would it be to do this?)

Post by LarryAllen » Wed May 03, 2017 7:31 pm

I am a car guy, have much higher income, could easily pay cash, and almost bought a new M4 last year. Almost. Got the deal down to $2k under invoice (which is pretty good on a BMW) on a brand new 2017 and then didn't pull the trigger. You know what? I don't feel bad and my 10 year old car is still getting me around just fine. I also had no buyers remorse. My point is wait 3 or 4 months and see if you still want it. If so then buy it. However, you might still be really happy with your Rav4.

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