Should I buy a new car?

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Maverick3320
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Joined: Tue May 12, 2015 2:59 pm

Should I buy a new car?

Post by Maverick3320 » Tue May 22, 2018 8:06 am

Morning everyone. I like to think that I'm generally a frugal person, but I do have some financial weaknesses, one of them being cars. Awhile back I saw a Jaguar XE in person and since then I've been lusting away. I've been doing a ton of research (6+ months) on the vehicle and it turns out it isn't very highly rated, at least versus it's competitors (Audi A4, BMW 330, Lexus IS, etc). Obviously I realize buying a Jaguar isn't a relatively sound financial decision.

To muddy the waters, I currently drive a 2016 Subaru Legacy that I actually enjoy. I've had no issues with the vehicle. However, my better half is thinking about upgrading from her 2010 Toyota Corolla, and she does like my car. Further, I've been playing around with the retirement section of Personal Capital and even in the most conservative scenario I meet my goals 100% of the time, with a ton of asset accumulation by age 90 even without taking a second job after retiring at 49 and a projected 7k/month in retirement spending. Job security where I work is generally pretty good.

Long story short: how un-Boglehead would it be of me to purchase a used Jaguar XE (or another entry-level luxury car) ? If I did go forward, I would likely purchase a 2017 XE 35t CPO - probably in the ballpark of $35,000.

My stats:

Age: 37 (single, no kids, but could change in the near future)
Salary: 115,000
Fed taxes: ~10% effective rate (about 25% of my salary is untaxed allowances)
State taxes: ~6% (Wisconsin)

TSP: 100,000 (currently maxing 18,500 each year)
Vanguard: 10,000 (maxing IRA as well)
Pension: approximately 60k/year starting at age 49, indexed to inflation
No healthcare costs
Emergency fund: $35,000

Mortgage: ~1100/month @ 3.0% (8 years into a 153,000 mortgage)
Other expenses: ~2000/month

I don't really spend a lot of money, so at this point in my life it's kind of just piling up in taxable investments.


Roast away!

Jack FFR1846
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Re: Should I buy a new car?

Post by Jack FFR1846 » Tue May 22, 2018 8:11 am

Have you actually driven the Jag yet? I'd reserve any decision until that's been done.

I could refer you to a few places for background....the advertising slogan in "Crazy People" with Dudley Moore and this year's Grand Tour. I can't really tell you any more for fear of being banned.
Bogle: Smart Beta is stupid

letsgobobby
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Re: Should I buy a new car?

Post by letsgobobby » Tue May 22, 2018 8:12 am

You say money is just piling up. Where's the pile?

cocoon
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Re: Should I buy a new car?

Post by cocoon » Tue May 22, 2018 8:22 am

I wouldn't suggest buying an Audi, you will pay too much for repair if you need it. So, if you are trying to save some money I wouldn't suggest Audi.

itsgot8
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Re: Should I buy a new car?

Post by itsgot8 » Tue May 22, 2018 8:26 am

I think we need a little more info.

Since you're in WI, is this going to be a summer only car? Why do you want a Jag? Have you drove one yet? You said they got poor reviews? Is reliability a problem? If so, have you considered how much would you have to set aside for repairs/maintenance?

Are there other cars you've wanted for a long time? How much would you finance? Or would you pay in cash?

mortfree
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Re: Should I buy a new car?

Post by mortfree » Tue May 22, 2018 8:27 am

do you realize that you are behind on retirement savings?

3x your salary by age 40 is just "one" of the many suggestions out there.

unless you haven't disclosed some bucket(s) of money.

have a kid and you won't feel so rich.

bloom2708
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Location: Fargo, ND

Re: Should I buy a new car?

Post by bloom2708 » Tue May 22, 2018 8:29 am

A Jaguar in the Wisconsin snow, rain, salt, sand, wind. Nah.

It is too hard to keep things nice up her in the middle north. Weather is too bad.

Your AWD Subaru is a better choice. I would think about the Jag, maybe test drive one and then walk away. (This works good with most major purchases).

You are on track for good results, but just starting. You are at mile 5 of a marathon. The $35k isn't all that bad, just not a good choice of cars in my opinion.
Last edited by bloom2708 on Tue May 22, 2018 8:32 am, edited 2 times in total.
"We are not here to please, but to provoke thoughtfulness." --Unknown Boglehead

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lthenderson
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Location: Iowa

Re: Should I buy a new car?

Post by lthenderson » Tue May 22, 2018 8:30 am

Maverick3320 wrote:
Tue May 22, 2018 8:06 am
I do have some financial weaknesses, one of them being cars.
Just reading the title and the above statement my answer would be no.

ssquared87
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Re: Should I buy a new car?

Post by ssquared87 » Tue May 22, 2018 9:19 am

If you’re n track to retire when you say you will, then you can afford it, but it’s a pretty dumb idea.

The main benefit of a Jag over its competitors is how fun it is to drive. You don’t sound like someone who appreciates cars all that much and are just interested because this one caught your eye. If you like how it drives then get it, but there are far better choices.

Audi A4 is more reliable, better built and has a far higher quality interior. The engine and transmission are better than the Jag but it’s bland to drive because of the FWD based chassis

BMW 3 drives nearly as well as the Jag if not better and is more reliable. Maintenance and repairs are cheaper than Audi and easier to DIY but the interior of the current generation is incredibly cheap. The new model should be out early next year and if the current 5 series and X3 are any indication, the new 3 will have a much better interior and will gain back some of that BMW feel that is missing from the current model. That said, the engines in the 3 are better than any of the others I mentioned

Alfa Giulia is by far the most fun car to drive in this class and also happens to have one of the nicest styled interiors. Some of the parts are cheap materials, but the interior has a great design. Engine and transmission are not as refined as Audi and BMW but probably at least as good as the Jag. Reliability is a huge question mark, but if you’re buying with your heart rather than your head, this is the one to get.

Frankly I’m a big fan of BMW because I like the balance of fun and luxury that they offer along with the ease to repair it on my own if I want. That said, if I didn’t care about reliability (which it doesn’t seem you do since you’re looking at the Jag) I’d go with the Alfa. It is one of the most interesting modern cars out there

JD2775
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Re: Should I buy a new car?

Post by JD2775 » Tue May 22, 2018 9:45 am

Maverick3320 wrote:
Tue May 22, 2018 8:06 am
Further, I've been playing around with the retirement section of Personal Capital and even in the most conservative scenario I meet my goals 100% of the time, with a ton of asset accumulation by age 90 even without taking a second job after retiring at 49 and a projected 7k/month in retirement spending. Job security where I work is generally pretty good.

TSP: 100,000 (currently maxing 18,500 each year)
Vanguard: 10,000 (maxing IRA as well)

Roast away!
Are you sure you are doing the math correctly? Or are you not sharing some of your portfolio with us? I don't see how you can retire at 49 (12 years away) and live off 7k a month for the rest of your life when you are currently have 110k in retirement savings

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Sandtrap
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Re: Should I buy a new car?

Post by Sandtrap » Tue May 22, 2018 9:52 am

letsgobobby wrote:
Tue May 22, 2018 8:12 am
You say money is just piling up. Where's the pile?
+1111111
With children and other expenses on the horizon, and the ever potential for personal and financial "black swans", and a small "pile", how can $35,000 be justified in a highly depreciable asset?

Perhaps pursue an inexpensive hobby in lieu of a perhaps transitory . . . . ?

j

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tyrion
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Re: Should I buy a new car?

Post by tyrion » Tue May 22, 2018 10:08 am

Maverick3320 wrote:
Tue May 22, 2018 8:06 am
Morning everyone. I like to think that I'm generally a frugal person, but I do have some financial weaknesses, one of them being cars. Awhile back I saw a Jaguar XE in person and since then I've been lusting away. I've been doing a ton of research (6+ months) on the vehicle and it turns out it isn't very highly rated, at least versus it's competitors (Audi A4, BMW 330, Lexus IS, etc). Obviously I realize buying a Jaguar isn't a relatively sound financial decision.

To muddy the waters, I currently drive a 2016 Subaru Legacy that I actually enjoy. I've had no issues with the vehicle. However, my better half is thinking about upgrading from her 2010 Toyota Corolla, and she does like my car. Further, I've been playing around with the retirement section of Personal Capital and even in the most conservative scenario I meet my goals 100% of the time, with a ton of asset accumulation by age 90 even without taking a second job after retiring at 49 and a projected 7k/month in retirement spending. Job security where I work is generally pretty good.

Long story short: how un-Boglehead would it be of me to purchase a used Jaguar XE (or another entry-level luxury car) ? If I did go forward, I would likely purchase a 2017 XE 35t CPO - probably in the ballpark of $35,000.

My stats:

Age: 37 (single, no kids, but could change in the near future)
Salary: 115,000
Fed taxes: ~10% effective rate (about 25% of my salary is untaxed allowances)
State taxes: ~6% (Wisconsin)

TSP: 100,000 (currently maxing 18,500 each year)
Vanguard: 10,000 (maxing IRA as well)
Pension: approximately 60k/year starting at age 49, indexed to inflation
No healthcare costs
Emergency fund: $35,000

Mortgage: ~1100/month @ 3.0% (8 years into a 153,000 mortgage)
Other expenses: ~2000/month

I don't really spend a lot of money, so at this point in my life it's kind of just piling up in taxable investments.


Roast away!

So you plan to give your current car to your girlfriend/fiance?

Seems to me like a 2 year old Subaru is a pretty nice already. I wouldn't be itching to upgrade already.

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Watty
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Re: Should I buy a new car?

Post by Watty » Tue May 22, 2018 10:17 am

Maverick3320 wrote:
Tue May 22, 2018 8:06 am
Mortgage: ~1100/month @ 3.0% (8 years into a 153,000 mortgage)
Pay your house off before buying expensive toys.

Money is fungible so if you so if you buy the Jaguar then you are in effect using a mortgage to buy it.
Maverick3320 wrote:
Tue May 22, 2018 8:06 am
I've been playing around with the retirement section of Personal Capital and even in the most conservative scenario I meet my goals 100% of the time...
Not even close in the "most conservative" calculation.

"life happens". In addition to career or health problems I know someone that had much loved and wanted quadruplets. That is very extreme but twins and kids with mild special needs are not uncommon. Most people in your situation would also want to have some college savings for their kids.

H-Town
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Re: Should I buy a new car?

Post by H-Town » Tue May 22, 2018 10:27 am

Maverick3320 wrote:
Tue May 22, 2018 8:06 am
Morning everyone. I like to think that I'm generally a frugal person, but I do have some financial weaknesses, one of them being cars. Awhile back I saw a Jaguar XE in person and since then I've been lusting away. I've been doing a ton of research (6+ months) on the vehicle and it turns out it isn't very highly rated, at least versus it's competitors (Audi A4, BMW 330, Lexus IS, etc). Obviously I realize buying a Jaguar isn't a relatively sound financial decision.

To muddy the waters, I currently drive a 2016 Subaru Legacy that I actually enjoy. I've had no issues with the vehicle. However, my better half is thinking about upgrading from her 2010 Toyota Corolla, and she does like my car. Further, I've been playing around with the retirement section of Personal Capital and even in the most conservative scenario I meet my goals 100% of the time, with a ton of asset accumulation by age 90 even without taking a second job after retiring at 49 and a projected 7k/month in retirement spending. Job security where I work is generally pretty good.

Long story short: how un-Boglehead would it be of me to purchase a used Jaguar XE (or another entry-level luxury car) ? If I did go forward, I would likely purchase a 2017 XE 35t CPO - probably in the ballpark of $35,000.

My stats:

Age: 37 (single, no kids, but could change in the near future)
Salary: 115,000
Fed taxes: ~10% effective rate (about 25% of my salary is untaxed allowances)
State taxes: ~6% (Wisconsin)

TSP: 100,000 (currently maxing 18,500 each year)
Vanguard: 10,000 (maxing IRA as well)
Pension: approximately 60k/year starting at age 49, indexed to inflation
No healthcare costs
Emergency fund: $35,000

Mortgage: ~1100/month @ 3.0% (8 years into a 153,000 mortgage)
Other expenses: ~2000/month

I don't really spend a lot of money, so at this point in my life it's kind of just piling up in taxable investments.


Roast away!
No you should not buy a new car. Maintain your current car and drive it as long as you can.

Come back in 10 years and we will reevaluate.

:beer

tampaite
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Re: Should I buy a new car?

Post by tampaite » Tue May 22, 2018 11:53 am

Maverick3320 wrote:
Tue May 22, 2018 8:06 am
I like to think that I'm generally a frugal person, but I do have some financial weaknesses, one of them being cars. Awhile back I saw a Jaguar XE in person and since then I've been lusting away.

I don't really spend a lot of money, so at this point in my life it's kind of just piling up in taxable investments.
Just do it. Once you have kids and a wife, you may not have the luxury of making decisions!

kaeltor
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Re: Should I buy a new car?

Post by kaeltor » Tue May 22, 2018 12:28 pm

I wouldn't do it to be honest.

Your networth isn't that big to be considering that purchase... no offense.

grokzilla
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Re: Should I buy a new car?

Post by grokzilla » Tue May 22, 2018 1:00 pm

Definitely not a needed purchase, but a $35,000 vehicle is not too terribly expensive. That said, you've already got an essentially brand new 2016 vehicle -- which makes the idea of purchasing a 2018 seem particularly silly.

I probably wouldn't do it... Heck, I'm still driving a 2003 Nissan with well over 100k miles, so maybe I'm not your best comparison. But, we typically try to stagger our new car purchases so we never have two payments running at the same time -- I find it helps having a plan that mitigates passion purchases like these.

msk
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Re: Should I buy a new car?

Post by msk » Tue May 22, 2018 1:07 pm

I owned a Jaguar once. And never again. I had bought a 4-year old XJ12 way back in the late 1970s in the UK and it cost me one GBP in repairs for every mile I drove it. I gave up after driving it for 12k miles.

I feel fine spending 6 months income on a car, cash. Just make sure that you buy one that is low maintenance. That does not mean low fun (Lexus?) but even Porsches can be very low maintenance. YOLO!

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djpeteski
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Re: Should I buy a new car?

Post by djpeteski » Tue May 22, 2018 2:12 pm

letsgobobby wrote:
Tue May 22, 2018 8:12 am
You say money is just piling up. Where's the pile?
+1 The 35k for new will clean out your efund. Do you have the cash to pay for such a car? Are you looking to take your efund to 19k (6 months of expenses) and a used Jag for 16k?

Maverick3320
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Re: Should I buy a new car?

Post by Maverick3320 » Tue May 22, 2018 2:16 pm

letsgobobby wrote:
Tue May 22, 2018 8:12 am
You say money is just piling up. Where's the pile?
I completed my MBA in May of 2014, and finished paying off the $60,000 in loans in May of 2017. Since then, the money has been accumulating in my checking account/savings account/emergency fund.

Maverick3320
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Re: Should I buy a new car?

Post by Maverick3320 » Tue May 22, 2018 2:18 pm

Jack FFR1846 wrote:
Tue May 22, 2018 8:11 am
Have you actually driven the Jag yet? I'd reserve any decision until that's been done.

I could refer you to a few places for background....the advertising slogan in "Crazy People" with Dudley Moore and this year's Grand Tour. I can't really tell you any more for fear of being banned.
I test drove one a few months back, and liked it. Since then I've just been researching. I'm not really sure I understand the rest of the comment :)

Maverick3320
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Re: Should I buy a new car?

Post by Maverick3320 » Tue May 22, 2018 2:19 pm

itsgot8 wrote:
Tue May 22, 2018 8:26 am
I think we need a little more info.

Since you're in WI, is this going to be a summer only car? Why do you want a Jag? Have you drove one yet? You said they got poor reviews? Is reliability a problem? If so, have you considered how much would you have to set aside for repairs/maintenance?

Are there other cars you've wanted for a long time? How much would you finance? Or would you pay in cash?
It would be a full-time vehicle - I neglected to mention I would be looking at the AWD version. I don't know how much I would finance; I believe I have tier one credit, so it would likely depend on the financing available.

Texanbybirth
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Re: Should I buy a new car?

Post by Texanbybirth » Tue May 22, 2018 2:22 pm

thangngo wrote:
Tue May 22, 2018 10:27 am

No you should not buy a new car. Maintain your current car and drive it as long as you can.

Come back in 10 years and we will reevaluate.

:beer
+1

Maverick3320
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Re: Should I buy a new car?

Post by Maverick3320 » Tue May 22, 2018 2:25 pm

ssquared87 wrote:
Tue May 22, 2018 9:19 am
If you’re n track to retire when you say you will, then you can afford it, but it’s a pretty dumb idea.

The main benefit of a Jag over its competitors is how fun it is to drive. You don’t sound like someone who appreciates cars all that much and are just interested because this one caught your eye. If you like how it drives then get it, but there are far better choices.

Audi A4 is more reliable, better built and has a far higher quality interior. The engine and transmission are better than the Jag but it’s bland to drive because of the FWD based chassis

BMW 3 drives nearly as well as the Jag if not better and is more reliable. Maintenance and repairs are cheaper than Audi and easier to DIY but the interior of the current generation is incredibly cheap. The new model should be out early next year and if the current 5 series and X3 are any indication, the new 3 will have a much better interior and will gain back some of that BMW feel that is missing from the current model. That said, the engines in the 3 are better than any of the others I mentioned

Alfa Giulia is by far the most fun car to drive in this class and also happens to have one of the nicest styled interiors. Some of the parts are cheap materials, but the interior has a great design. Engine and transmission are not as refined as Audi and BMW but probably at least as good as the Jag. Reliability is a huge question mark, but if you’re buying with your heart rather than your head, this is the one to get.

Frankly I’m a big fan of BMW because I like the balance of fun and luxury that they offer along with the ease to repair it on my own if I want. That said, if I didn’t care about reliability (which it doesn’t seem you do since you’re looking at the Jag) I’d go with the Alfa. It is one of the most interesting modern cars out there
Thanks for the input.

Audi A4 - gets the highest reviews; seems to have the nicest interior/tech.
BMW 3 series - seem decent, but they are quite ubiquitous around here. I keep reading that the newer models don't have the famed BMW handling?
Alfa Guilia Ti - definitely caught my eye, I'll admit. I would be a bit wary of the reliability, but then again, I'm looking at a Jag...

Maverick3320
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Re: Should I buy a new car?

Post by Maverick3320 » Tue May 22, 2018 2:27 pm

mortfree wrote:
Tue May 22, 2018 8:27 am
do you realize that you are behind on retirement savings?

3x your salary by age 40 is just "one" of the many suggestions out there.

unless you haven't disclosed some bucket(s) of money.

have a kid and you won't feel so rich.
Yeah, agreed. I do realize that my pension isn't guaranteed, but I'd say on the scale of pensions it is pretty close to the top. The pension alone is more than I spend on a monthly basis, but I do realize that having kids could potentially change that. Then again, I don't think I would double my spending when kids come along, and if kids do come along, I would presumably have a significant other to share some of the costs with.

Maverick3320
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Re: Should I buy a new car?

Post by Maverick3320 » Tue May 22, 2018 2:30 pm

JD2775 wrote:
Tue May 22, 2018 9:45 am
Maverick3320 wrote:
Tue May 22, 2018 8:06 am
Further, I've been playing around with the retirement section of Personal Capital and even in the most conservative scenario I meet my goals 100% of the time, with a ton of asset accumulation by age 90 even without taking a second job after retiring at 49 and a projected 7k/month in retirement spending. Job security where I work is generally pretty good.

TSP: 100,000 (currently maxing 18,500 each year)
Vanguard: 10,000 (maxing IRA as well)

Roast away!
Are you sure you are doing the math correctly? Or are you not sharing some of your portfolio with us? I don't see how you can retire at 49 (12 years away) and live off 7k a month for the rest of your life when you are currently have 110k in retirement savings
At 20 years of service (age 49) I qualify for a defined-benefit pension. The conservative estimate is a bit over 6k/month. The monthly amount goes up if I retire at a higher rank, or if I stay in longer. I do realize the pension isn't a given, but I'm fairly close to halfway there. Some people don't make it, but it's typically due to gross negligence (DUI, criminal acts, etc).

Maverick3320
Posts: 503
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Re: Should I buy a new car?

Post by Maverick3320 » Tue May 22, 2018 2:32 pm

tyrion wrote:
Tue May 22, 2018 10:08 am
Maverick3320 wrote:
Tue May 22, 2018 8:06 am
Morning everyone. I like to think that I'm generally a frugal person, but I do have some financial weaknesses, one of them being cars. Awhile back I saw a Jaguar XE in person and since then I've been lusting away. I've been doing a ton of research (6+ months) on the vehicle and it turns out it isn't very highly rated, at least versus it's competitors (Audi A4, BMW 330, Lexus IS, etc). Obviously I realize buying a Jaguar isn't a relatively sound financial decision.

To muddy the waters, I currently drive a 2016 Subaru Legacy that I actually enjoy. I've had no issues with the vehicle. However, my better half is thinking about upgrading from her 2010 Toyota Corolla, and she does like my car. Further, I've been playing around with the retirement section of Personal Capital and even in the most conservative scenario I meet my goals 100% of the time, with a ton of asset accumulation by age 90 even without taking a second job after retiring at 49 and a projected 7k/month in retirement spending. Job security where I work is generally pretty good.

Long story short: how un-Boglehead would it be of me to purchase a used Jaguar XE (or another entry-level luxury car) ? If I did go forward, I would likely purchase a 2017 XE 35t CPO - probably in the ballpark of $35,000.

My stats:

Age: 37 (single, no kids, but could change in the near future)
Salary: 115,000
Fed taxes: ~10% effective rate (about 25% of my salary is untaxed allowances)
State taxes: ~6% (Wisconsin)

TSP: 100,000 (currently maxing 18,500 each year)
Vanguard: 10,000 (maxing IRA as well)
Pension: approximately 60k/year starting at age 49, indexed to inflation
No healthcare costs
Emergency fund: $35,000

Mortgage: ~1100/month @ 3.0% (8 years into a 153,000 mortgage)
Other expenses: ~2000/month

I don't really spend a lot of money, so at this point in my life it's kind of just piling up in taxable investments.


Roast away!

So you plan to give your current car to your girlfriend/fiance?

Seems to me like a 2 year old Subaru is a pretty nice already. I wouldn't be itching to upgrade already.
Legally I'm single. We don't share finances, so I would sell her the car. If our finances combined before then due to marriage, I obviously wouldn't sell her the car, I would give it to her. She has a similar salary to me, though, so I don't know if that would be much of a loss.

Maverick3320
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Re: Should I buy a new car?

Post by Maverick3320 » Tue May 22, 2018 2:35 pm

Watty wrote:
Tue May 22, 2018 10:17 am
Maverick3320 wrote:
Tue May 22, 2018 8:06 am
Mortgage: ~1100/month @ 3.0% (8 years into a 153,000 mortgage)
Pay your house off before buying expensive toys.

Money is fungible so if you so if you buy the Jaguar then you are in effect using a mortgage to buy it.
Maverick3320 wrote:
Tue May 22, 2018 8:06 am
I've been playing around with the retirement section of Personal Capital and even in the most conservative scenario I meet my goals 100% of the time...
Not even close in the "most conservative" calculation.

"life happens". In addition to career or health problems I know someone that had much loved and wanted quadruplets. That is very extreme but twins and kids with mild special needs are not uncommon. Most people in your situation would also want to have some college savings for their kids.
My healthcare, and my family's healthcare, is free. The risk there is pretty low.

Career loss - could happen, sure. But the transgression that I would have to commit to lose my career would likely land me in jail anyway, so a bit of a moot point :)

College savings for kids - I put myself through college, as did my parents. I don't think it's unreasonable to ask children to do the same. Would I like to help? Sure, but it would be situation dependent.

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wabbajack
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Re: Should I buy a new car?

Post by wabbajack » Tue May 22, 2018 2:36 pm

Most bogleheads don't "get" cars. It's not an investment, it's a hobby. It's an expensive one, but if you feel you're comfortable enough to go for it then I wouldn't stop you.

I drive a 2017 Audi A3. The issues that I would caution you about have nothing to do with financial sense - but they all end up costing money.
i) You live in WI. I would venture to say that roads suck. Did you read the Jaguar XE long term road test from Car and Driver?
https://www.caranddriver.com/reviews/20 ... ate-review
The car will be fun and affordable - until you start popping tires and replacing rims next spring. Speaking from personal experience.

ii) Bugger reliability. If you're buying CPO, it has a warranty. Other commentors are quick to make assumptions about brands (Jags unreliable; Audi's expensive; etc.), but the reality is that you'll probably never have an issue while it's under CPO. HOWEVER, remember that tires and wheels are not covered under most CPO warranty (you'll want to buy road hazard - see above).

iii) Finance it. You're probably not going to get much below 3% APR, but even at 4% interest rate over 60 months is reasonable. I think $35k is a bit much for the XE, unless you're looking at the top trim. The whole point of buying used is that someone else has eaten the major Year 1 depreciation. I would advise against making a downpayment. Interest is still relatively cheap.

Bottom line: Your decision is not financial. It's practical. Trust me, I am one year into doing what you're thinking about.

Maverick3320
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Re: Should I buy a new car?

Post by Maverick3320 » Tue May 22, 2018 2:36 pm

kaeltor wrote:
Tue May 22, 2018 12:28 pm
I wouldn't do it to be honest.

Your networth isn't that big to be considering that purchase... no offense.
None taken! Friends and family are telling me to go for it; Bogleheads is where I come to stay grounded. Appreciate it.

Maverick3320
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Re: Should I buy a new car?

Post by Maverick3320 » Tue May 22, 2018 2:38 pm

msk wrote:
Tue May 22, 2018 1:07 pm
I owned a Jaguar once. And never again. I had bought a 4-year old XJ12 way back in the late 1970s in the UK and it cost me one GBP in repairs for every mile I drove it. I gave up after driving it for 12k miles.

I feel fine spending 6 months income on a car, cash. Just make sure that you buy one that is low maintenance. That does not mean low fun (Lexus?) but even Porsches can be very low maintenance. YOLO!
I would try to mitigate the reliability concerns by buying a slightly used, preferably CPO vehicle. But point taken - I've heard and read about Jaguar's poor reliability history. I don't think Porsche would be on my radar - that's more of a lottery car for me :)

kjvmartin
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Re: Should I buy a new car?

Post by kjvmartin » Tue May 22, 2018 2:40 pm

If you're frugal, this goes against your nature and you will regret it within a few months.

On a smaller scale, I took some college graduation money and put it down on my dream Mustang GT back in '07. It was a CPO '05 and I was enamored for a while. One of the worst decisions I've made.

Insurance is higher

Gas cost is higher (you'll drive it faster than you'd drive other cars). Does it take premium?

Maintenance and tires are higher/more frequent. Car washes to keep it looking nice.

It's not out of the question for you, but you said you're frugal. This would be impulsive and I'd back off. Don't repeat my mistake.

Maverick3320
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Re: Should I buy a new car?

Post by Maverick3320 » Tue May 22, 2018 2:43 pm

wabbajack wrote:
Tue May 22, 2018 2:36 pm
Most bogleheads don't "get" cars. It's not an investment, it's a hobby. It's an expensive one, but if you feel you're comfortable enough to go for it then I wouldn't stop you.

I drive a 2017 Audi A3. The issues that I would caution you about have nothing to do with financial sense - but they all end up costing money.
i) You live in WI. I would venture to say that roads suck. Did you read the Jaguar XE long term road test from Car and Driver?
https://www.caranddriver.com/reviews/20 ... ate-review
The car will be fun and affordable - until you start popping tires and replacing rims next spring. Speaking from personal experience.

ii) Bugger reliability. If you're buying CPO, it has a warranty. Other commentors are quick to make assumptions about brands (Jags unreliable; Audi's expensive; etc.), but the reality is that you'll probably never have an issue while it's under CPO. HOWEVER, remember that tires and wheels are not covered under most CPO warranty (you'll want to buy road hazard - see above).

iii) Finance it. You're probably not going to get much below 3% APR, but even at 4% interest rate over 60 months is reasonable. I think $35k is a bit much for the XE, unless you're looking at the top trim. The whole point of buying used is that someone else has eaten the major Year 1 depreciation. I would advise against making a downpayment. Interest is still relatively cheap.

Bottom line: Your decision is not financial. It's practical. Trust me, I am one year into doing what you're thinking about.
Thanks for the great feedback. I actually did read that long-term test! I haven't had any bad experiences with wheels/tires on vehicles, so it's hard for me to visualize without mentally "discounting" the advice.

How does the Audi handle the weather in Indy?

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wabbajack
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Re: Should I buy a new car?

Post by wabbajack » Tue May 22, 2018 2:52 pm

Maverick3320 wrote:
Tue May 22, 2018 2:43 pm
Thanks for the great feedback. I actually did read that long-term test! I haven't had any bad experiences with wheels/tires on vehicles, so it's hard for me to visualize without mentally "discounting" the advice.

How does the Audi handle the weather in Indy?
It handled beautifully in the snow. I made a couple of fantastic drift videos - it was my first time. I'm mid-20s. In all seriousness, after the last pothole season I started shopping for CUVs and just ended up depressed.

I'm in the process of trading the Audi A3 in for a Cadillac ATS (same model year, little fewer miles). The Audi has developed "ride issues" that nobody has been able to fix. I've taken it to multiple shops to get the wheels balanced and aligned, but the issue is still there. The ATS has smaller rims and I'll be driving a lot more carefully next spring.

Like I said, none of this is related to financial sense. It's all just practical things that end up costing money.

ncbill
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Re: Should I buy a new car?

Post by ncbill » Tue May 22, 2018 3:22 pm

Rent one for a week to a month.

Then if it is still a must have...hire a broker to negotiate a lease.

Maverick3320
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Re: Should I buy a new car?

Post by Maverick3320 » Tue May 22, 2018 4:00 pm

ncbill wrote:
Tue May 22, 2018 3:22 pm
Rent one for a week to a month.

Then if it is still a must have...hire a broker to negotiate a lease.
Could you expand on this a bit? I've never considered renting a car as a test. I hadn't really considered a lease, nor using a lease broker. What's the upside?

ncbill
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Re: Should I buy a new car?

Post by ncbill » Wed May 23, 2018 8:06 am

Maverick3320 wrote:
Tue May 22, 2018 4:00 pm
ncbill wrote:
Tue May 22, 2018 3:22 pm
Rent one for a week to a month.

Then if it is still a must have...hire a broker to negotiate a lease.
Could you expand on this a bit? I've never considered renting a car as a test. I hadn't really considered a lease, nor using a lease broker. What's the upside?
Looks like Turo/Sixt/Avis/Enterprise have Jags for rent.

So start there.

If you then want to lease (avoid the hassles of owning out of warranty) then head on over to leasehackr [sic] dot com and read their forums.

There are brokers listed there you can PM as well.

Miguelito
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Re: Should I buy a new car?

Post by Miguelito » Wed May 23, 2018 9:53 am

As a car guy myself, I say that if you were a car person and this your one thing you spend money on and truly appreciate cars (dynamics, feel, performance, etc), then I would hesitantly say go for it.

But you don't seem to be a car guy, you simply appreciate nice (looking) cars. Your situation seems pretty good (frankly, primarily due to your pension otherwise it would not), but you are not that young and you seem to plan on a family. That gets expensive fast. As a result I say drive your Subaru for another year and see where things go.

Is your wife in a well-paying career? Does she plan to stay at home? All that stuff matters. You salary is not bad for that part of the country, but if in 3-4 years that salary has to support a family of 4 things won't seem so great.

If you were 30yo and a car guy with that financial picture I'd say go for it.

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Re: Should I buy a new car?

Post by ssquared87 » Thu May 24, 2018 12:08 am

Maverick3320 wrote:
Tue May 22, 2018 2:25 pm
ssquared87 wrote:
Tue May 22, 2018 9:19 am
If you’re n track to retire when you say you will, then you can afford it, but it’s a pretty dumb idea.

The main benefit of a Jag over its competitors is how fun it is to drive. You don’t sound like someone who appreciates cars all that much and are just interested because this one caught your eye. If you like how it drives then get it, but there are far better choices.

Audi A4 is more reliable, better built and has a far higher quality interior. The engine and transmission are better than the Jag but it’s bland to drive because of the FWD based chassis

BMW 3 drives nearly as well as the Jag if not better and is more reliable. Maintenance and repairs are cheaper than Audi and easier to DIY but the interior of the current generation is incredibly cheap. The new model should be out early next year and if the current 5 series and X3 are any indication, the new 3 will have a much better interior and will gain back some of that BMW feel that is missing from the current model. That said, the engines in the 3 are better than any of the others I mentioned

Alfa Giulia is by far the most fun car to drive in this class and also happens to have one of the nicest styled interiors. Some of the parts are cheap materials, but the interior has a great design. Engine and transmission are not as refined as Audi and BMW but probably at least as good as the Jag. Reliability is a huge question mark, but if you’re buying with your heart rather than your head, this is the one to get.

Frankly I’m a big fan of BMW because I like the balance of fun and luxury that they offer along with the ease to repair it on my own if I want. That said, if I didn’t care about reliability (which it doesn’t seem you do since you’re looking at the Jag) I’d go with the Alfa. It is one of the most interesting modern cars out there
Thanks for the input.

Audi A4 - gets the highest reviews; seems to have the nicest interior/tech.
BMW 3 series - seem decent, but they are quite ubiquitous around here. I keep reading that the newer models don't have the famed BMW handling?
Alfa Guilia Ti - definitely caught my eye, I'll admit. I would be a bit wary of the reliability, but then again, I'm looking at a Jag...
The current generation of the 3 series is the F30. When it came out in 2012 it was criticized for having numb steering and a soft suspension. Over the years, BMW has improved those issues. The most major revisions were in 2014 and 2016, so if you get a current model year version, they drive pretty well. They're not as fun as older BMWs, but they are more fun to drive than the Audi, less fun than the Alfa.

BMW will be introducing a new 3 series for 2019...it should be revealed in Sept/October. Based on the reviews that the X3 is getting, the new 3 series will probably be a huge step up from the current generation, and will gain back that BMW feel that is lacking in the current model. If you don't need a car right now, hold off for the new 3 series.

Don't worry about it being a new model year and buying in the first year. The engines/transmissions will be carry overs from the old model, and they have proven themselves to be extremely reliable. The chassis will be based on their CLAR architecture, which the current 7, 5 and X3 are based on. What i'm trying to say is that there really shouldn't be any teething problems in the first model year. I got a 2017 5 series which is on that same platform, and it's been trouble free in the year I've had it. Out of all the cars my family has gotten new, this one has been the most rock solid, not a single rattle, no imperfections on delivery, excellent build quality.

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Re: Should I buy a new car?

Post by pennywise » Thu May 24, 2018 6:20 am

Maverick3320 wrote:
Tue May 22, 2018 2:30 pm
At 20 years of service (age 49) I qualify for a defined-benefit pension. The conservative estimate is a bit over 6k/month. The monthly amount goes up if I retire at a higher rank, or if I stay in longer. I do realize the pension isn't a given, but I'm fairly close to halfway there. Some people don't make it, but it's typically due to gross negligence (DUI, criminal acts, etc).
Whoa there--you are assuming you have a financial asset (DB pension for life at 60K) that you are a decade away from earning, and you're basing a decision to purchase a dubiously useful, depreciating item on that premise.

That's a hard no. If you were asking this question as a 49 YO with that pension locked in, different scenario. However you are not 49 and you do not have the pension benefit yet, so you shouldn't be buying a car that costs a third of your savings at this point.

itsgot8
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Re: Should I buy a new car?

Post by itsgot8 » Thu May 24, 2018 8:00 am

After reading his responses, I feel like the OP is looking to make an impulse purchase. There's nothing to indicate he has wanted a Jag all his life, so purchasing one certainly wouldn't be a life achievement. Therefore, I think this is a hard pass.

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Re: Should I buy a new car?

Post by TSR » Thu May 24, 2018 9:19 am

You and your partner have a two-year-old car and an eight-year-old car, both working fine, and it's time for both of you to upgrade? This to me suggests that you're at risk of having financial struggles related to cars all your life. The typical "boglehead" advice is to buy a car and run it into the ground. Even if we were to credit those who say that bogleheads don't "get" car culture, I think we can still say that you need a few more miles on at least the Subaru before you "need" an upgrade. As others have said, you're just starting out on your savings journey -- giving up a great, mid-priced vehicle after two years for a luxury car is not a great way to start. (My Honda Accord is now 13 years old. I would never tell someone that they have to wait that long, but I don't mind driving it.)

Are you military? (I'm not, but certain aspects of my fed job are military-adjacent.) Don't discount the possibility of getting one of those DUIs -- I've seen plenty of people wander unexpectedly in that direction. And don't discount that people get chaptered out for other more esoteric offenses. Things happen, as they say, and they're often not in your control.

Finally, I work in a fairly well-compensated world of federal employees. A guy I know who has a six-figure fed salary drives a Tesla, and even though he can likely afford it, it still draws a lot of occasionally negative commentary for its flashiness. Something to consider.

ncbill
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Re: Should I buy a new car?

Post by ncbill » Thu May 24, 2018 4:22 pm

TSR wrote:
Thu May 24, 2018 9:19 am
Finally, I work in a fairly well-compensated world of federal employees. A guy I know who has a six-figure fed salary drives a Tesla, and even though he can likely afford it, it still draws a lot of occasionally negative commentary for its flashiness. Something to consider.
Deflect- if the OP runs into the above issue he can just tell 'em he got a great lease deal "because it's a demo" on his Jag XE, e.g.:

https://forum.leasehackr.com/t/jaguar-x ... down/16351

Luxo-sedans seem to usually have demo leases available.

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Re: Should I buy a new car?

Post by lazydavid » Fri May 25, 2018 7:26 am

Maverick3320 wrote:
Tue May 22, 2018 2:43 pm
Thanks for the great feedback. I actually did read that long-term test! I haven't had any bad experiences with wheels/tires on vehicles, so it's hard for me to visualize without mentally "discounting" the advice.
Believe it. I put 19s on my 3-series shortly after I bought it. Several got bent or cracked and repaired at $125/pop. Then I hit some road construction that wasn't marked or properly covered and bent all 4, 3 beyond repair. The contractor responsible for the road (eventually) paid for the replacements. Those too wound up getting bent, but still driveable. When those tires wore out, it turned out to be cheaper to buy a new set of 18" wheels and tires, than to repair my 2 bent rims and just put new tires on (19" tires are DRAMATICALLY more expensive than 18"). I went with a brand (Apex) that is known for making wheels that are exceptionally strong for their weight, AND sells them singly at half price if you somehow manage to bend/break one. So far almost 3 years, have popped one tire due to a pothole, but the wheel was undamaged and Costco replaced the tire for free.

Life with large wheels and low profile tires is dramatically different than "traditional" fitments. The improvement in performance is awesome, but it definitely comes at a cost.

Maverick3320
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Re: Should I buy a new car?

Post by Maverick3320 » Tue May 29, 2018 11:40 am

ncbill wrote:
Wed May 23, 2018 8:06 am
Maverick3320 wrote:
Tue May 22, 2018 4:00 pm
ncbill wrote:
Tue May 22, 2018 3:22 pm
Rent one for a week to a month.

Then if it is still a must have...hire a broker to negotiate a lease.
Could you expand on this a bit? I've never considered renting a car as a test. I hadn't really considered a lease, nor using a lease broker. What's the upside?
Looks like Turo/Sixt/Avis/Enterprise have Jags for rent.

So start there.

If you then want to lease (avoid the hassles of owning out of warranty) then head on over to leasehackr [sic] dot com and read their forums.

There are brokers listed there you can PM as well.
Awesome - thank you.

Maverick3320
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Re: Should I buy a new car?

Post by Maverick3320 » Tue May 29, 2018 11:42 am

Miguelito wrote:
Wed May 23, 2018 9:53 am
As a car guy myself, I say that if you were a car person and this your one thing you spend money on and truly appreciate cars (dynamics, feel, performance, etc), then I would hesitantly say go for it.

But you don't seem to be a car guy, you simply appreciate nice (looking) cars. Your situation seems pretty good (frankly, primarily due to your pension otherwise it would not), but you are not that young and you seem to plan on a family. That gets expensive fast. As a result I say drive your Subaru for another year and see where things go.

Is your wife in a well-paying career? Does she plan to stay at home? All that stuff matters. You salary is not bad for that part of the country, but if in 3-4 years that salary has to support a family of 4 things won't seem so great.

If you were 30yo and a car guy with that financial picture I'd say go for it.
All good points. My significant other makes roughly the same as I do, and likely wouldn't stay at home with kids. Either way there would be additional childcare costs, though, for sure.

ClemsonBogle
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Re: Should I buy a new car?

Post by ClemsonBogle » Tue May 29, 2018 3:06 pm

I am going to add one thing and then a story.

I think it is more fun to look at, research, think about owning the car than owning it. Once you have it then what...right now your hobby is THINKING about this car, researching this car, etc etc. I can almost guarantee you that most of the time once the "newness" is off on a daily basis it will just be your transportation again.

A friend of mine had an Audi TTRS and a Toyota corolla (his wife's). She complained that all her friends had SUVs and that they should have more equal cars. So he sold them both did some research and bought a used s4 for himself and a used q5 for her. Before the sale he was researching thinking, reading boards, etc etc. His wife after about 3-4 months now complains that her SUV doesnt have a moonroof or a backup camera and is harder to see out of than the Corolla. His S4 wasnt as fast as the TTRS something he thought he could deal with, but what did he do...start researching... and came across an S5 now this is the perfect blend sportier looking than the S4 and still only a little more expensive (7-10k more than the s4). He bought it the S5 and took it to the mechanic...bad transmission. Cars break, used cars break badly, you might love it, but right now you have one of those cars you never worry about, it works, its easy to maintain, it will be reliable for a very long time. Do you want to change that?

So i told you that story to highlight, you get used to whatever you drive, so try and drive frugally, and keep researching and set a perfect if unrealistic "deal" aka if i can get this car for 25K and less than 20K miles i will or i will save 10K over the cost of my car. Also keep in mind that if your GF buys your car from you and just doesnt really "want it" you may be replacing that one soon enough again...

I too think it would be fun to own cool cars and have researched the exact car you mentioned but think you are going pretty high on the value XF 35t Premium Fred Haas Toyota World HOUSTON 19,581 Miles $28,991.00 Year: 2016Miles: 19,581 and that's before you negotiate....

You shouldn't buy it but can.

My Dad says you get education all sorts of ways, maybe in this case like your MBA you need to pay the 10K to learn a life lesson, one way or another the knowledge is worth something.

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