Can I afford a 50k car? If so, whats the best way to do it?

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Captain kangaroo
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Can I afford a 50k car? If so, whats the best way to do it?

Post by Captain kangaroo »

Turning 30 this year (30 is the new 50) and want to buy myself a fun car to enjoy on my time off.

Barebones of my financial situation:
60,000 - 75,000 a year ( depending how much OT I feel like working, law enforcement position)
1.3 million in an irrevocable trust I have no access to until 40's
600,000 in my taxable brokerage
175,000 IRA
No debt, currently rent an apartment in a pretty middle of the road cost of living area.

At first glance, it looks like I would have no problem affording it, but 50,000 is still a big hit. My initial thought it just put around 15,000 down from my taxable brokerage and just take a pretty big monthly payment. Another thought would be I could put a lot less down and lease something? Or just don't do it all together lol.

edit: In case anyone is wondering, it is a 67 Chevy Chevelle SS I am looking at.
Last edited by Captain kangaroo on Tue Jan 15, 2019 6:02 pm, edited 2 times in total.
barnaclebob
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Re: Can I afford a 50k car? If so, whats the best way to do it?

Post by barnaclebob »

Looks to me like you can afford it. Whether its a good idea depends on how you value $50,000 and how it affects your retirement date.
livesoft
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Re: Can I afford a 50k car? If so, whats the best way to do it?

Post by livesoft »

You can afford a $50K car as long as you pay $30K or less for it. That's what I do.
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jebmke
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Re: Can I afford a 50k car? If so, whats the best way to do it?

Post by jebmke »

I thought 60 was the new 50. What happened?

edit: if you have to ask anonymous people on the internet if you can afford a car, good chance the answer is no.

edit #2: or yes.
When you discover that you are riding a dead horse, the best strategy is to dismount.
Topic Author
Captain kangaroo
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Re: Can I afford a 50k car? If so, whats the best way to do it?

Post by Captain kangaroo »

jebmke wrote: Tue Jan 15, 2019 6:02 pm I thought 60 was the new 50. What happened?

edit: if you have to ask anonymous people on the internet if you can afford a car, good chance the answer is no.

edit #2: or yes.
I ask anonymous people on the internet how to invest my money, might as well ask how to spend it as well.
brad.clarkston
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Re: Can I afford a 50k car? If so, whats the best way to do it?

Post by brad.clarkston »

I wouldn't fleece/lease unless your very sure you can meet the return policies (lease-end, excess mileage, excessive wear charges). I've found generally leasing is only a good option if you want a very premium ($80k+) car but do not drive it all that much usually you'll also have some type of dealer package that gets it washed and detailed weekly/bi-weekly.

I haven't bought a "new" car in about 30 years but then I'm not a car guy I'm more than happy with my 2007 Camry that never has problems but then I also work from home 90% of the year. If it was me I'd put at least half of it down and then do payments.
mhalley
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Re: Can I afford a 50k car? If so, whats the best way to do it?

Post by mhalley »

Dave Ramsey's rule is that anything with a motor can't exceed 50 percent of income.
He also says no new cars till net worth a million, but I don't agree with that one
SeaToTheBay
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Re: Can I afford a 50k car? If so, whats the best way to do it?

Post by SeaToTheBay »

How did you get to $600K taxable and more in IRA at your age and income? Just curious - that's some serious saving and/or investment income!

To me, "affording it" and "smart/worthwhile decision" are two different things. Seems like you can afford it. As a car guy myself, I know the temptation but I don't know if I would want to unload $50k like that.

Another thing that puzzles me is you mention buying a '67 Chevelle, but then you mention leasing something, which will obviously not be a '67 Chevelle, but rather something new. I'd have a much easier time buying that classic Chevelle that's going to retain value or even appreciate, vs. leasing a new $50k and making sizeable payments each month with nothing to show for it in the end (and it will be hard to let go of that nice car at the end of the lease without replacing it with another nice car).
MotoTrojan
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Re: Can I afford a 50k car? If so, whats the best way to do it?

Post by MotoTrojan »

How is the $1.3M invested (is it)? You have $2M at age 30 so you can do whatever you want, assuming you live comfortably on your $60K minimum salary. You are in a position to retire early should you desire, which this won't help. I assume given the age of this car that maintenance will be significant. Do you have a garage and plan to work on it yourself?
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Captain kangaroo
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Re: Can I afford a 50k car? If so, whats the best way to do it?

Post by Captain kangaroo »

SeaToTheBay wrote: Tue Jan 15, 2019 6:09 pm How did you get to $600K taxable and more in IRA at your age and income? Just curious - that's some serious saving and/or investment income!

To me, "affording it" and "smart/worthwhile decision" are two different things. Seems like you can afford it. As a car guy myself, I know the temptation but I don't know if I would want to unload $50k like that.

Another thing that puzzles me is you mention buying a '67 Chevelle, but then you mention leasing something, which will obviously not be a '67 Chevelle, but rather something new. I'd have a much easier time buying that classic Chevelle that's going to retain value or even appreciate, vs. leasing a new $50k and making sizeable payments each month with nothing to show for it in the end (and it will be hard to let go of that nice car at the end of the lease without replacing it with another nice car).
Yeah, my big idea is to buy the 67 Chevy, I feel like I could keep that and enjoy it for years. My other thought was to lease something new for around the same price, but I am a lot more against that idea..regret even putting it in the post now.

In terms of the money, it is all inherited, both parents have been passed away for some time now.
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Captain kangaroo
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Re: Can I afford a 50k car? If so, whats the best way to do it?

Post by Captain kangaroo »

MotoTrojan wrote: Tue Jan 15, 2019 6:12 pm How is the $1.3M invested (is it)? You have $2M at age 30 so you can do whatever you want, assuming you live comfortably on your $60K minimum salary. You are in a position to retire early should you desire, which this won't help. I assume given the age of this car that maintenance will be significant. Do you have a garage and plan to work on it yourself?

The 1.3 is held, and invested, by a Trust company. It is around 80/30 stock and muni bonds split. I don't have a garage, but a friend does who is a mechanic and could help with most things.
stoptothink
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Re: Can I afford a 50k car? If so, whats the best way to do it?

Post by stoptothink »

SeaToTheBay wrote: Tue Jan 15, 2019 6:09 pm How did you get to $600K taxable and more in IRA at your age and income? Just curious - that's some serious saving and/or investment income!
My guess is the same way that OP has a $1.3M trust.
MotoTrojan
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Re: Can I afford a 50k car? If so, whats the best way to do it?

Post by MotoTrojan »

Captain kangaroo wrote: Tue Jan 15, 2019 6:16 pm
MotoTrojan wrote: Tue Jan 15, 2019 6:12 pm How is the $1.3M invested (is it)? You have $2M at age 30 so you can do whatever you want, assuming you live comfortably on your $60K minimum salary. You are in a position to retire early should you desire, which this won't help. I assume given the age of this car that maintenance will be significant. Do you have a garage and plan to work on it yourself?

The 1.3 is held, and invested, by a Trust company. It is around 80/30 stock and muni bonds split. I don't have a garage, but a friend does who is a mechanic and could help with most things.
Leveraged bonds or typo (I am guessing the latter)?
MotoTrojan
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Re: Can I afford a 50k car? If so, whats the best way to do it?

Post by MotoTrojan »

stoptothink wrote: Tue Jan 15, 2019 6:17 pm
SeaToTheBay wrote: Tue Jan 15, 2019 6:09 pm How did you get to $600K taxable and more in IRA at your age and income? Just curious - that's some serious saving and/or investment income!
My guess is the same way that OP has a $1.3M trust.
If that is the case, I'd be curious what the OPs savings rate is. If it is quite low, I would suggest they save up cash to buy the car (or at a minimum to pay the down payment). Little concerned by their willingness to sell taxable assets (I presume equities with capital gains) in order to pay the down payment.

$2M is enough to fund retirement if it growths without being messed with for 1-2 decades, but getting in the habit of eating away at the taxable brokerage is dangerous.
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Captain kangaroo
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Re: Can I afford a 50k car? If so, whats the best way to do it?

Post by Captain kangaroo »

MotoTrojan wrote: Tue Jan 15, 2019 6:18 pm
Captain kangaroo wrote: Tue Jan 15, 2019 6:16 pm
MotoTrojan wrote: Tue Jan 15, 2019 6:12 pm How is the $1.3M invested (is it)? You have $2M at age 30 so you can do whatever you want, assuming you live comfortably on your $60K minimum salary. You are in a position to retire early should you desire, which this won't help. I assume given the age of this car that maintenance will be significant. Do you have a garage and plan to work on it yourself?

The 1.3 is held, and invested, by a Trust company. It is around 80/30 stock and muni bonds split. I don't have a garage, but a friend does who is a mechanic and could help with most things.
Leveraged bonds or typo (I am guessing the latter)?
No leveraged bonds. The fixed income portion is all Municipal Bonds.
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Captain kangaroo
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Re: Can I afford a 50k car? If so, whats the best way to do it?

Post by Captain kangaroo »

MotoTrojan wrote: Tue Jan 15, 2019 6:19 pm
stoptothink wrote: Tue Jan 15, 2019 6:17 pm
SeaToTheBay wrote: Tue Jan 15, 2019 6:09 pm How did you get to $600K taxable and more in IRA at your age and income? Just curious - that's some serious saving and/or investment income!
My guess is the same way that OP has a $1.3M trust.
If that is the case, I'd be curious what the OPs savings rate is. If it is quite low, I would suggest they save up cash to buy the car (or at a minimum to pay the down payment). Little concerned by their willingness to sell taxable assets (I presume equities with capital gains) in order to pay the down payment.

$2M is enough to fund retirement if it growths without being messed with for 1-2 decades, but getting in the habit of eating away at the taxable brokerage is dangerous.
I agree. I really don't want to have to sell anything in my taxable account. It is just one of the options I have to fund this endeavor I guess.

In terms of my saving rate, I have automatic transfers setup and invest 33% of each paycheck into my taxable brokerage. I have a separate savings account with 1 year of expenses in it that I don't touch. The remaining 66% of my paycheck just goes into my checking for bills, dining out, misc. things.

The more I talk about it, the more I realize it might not be such a good idea.
Last edited by Captain kangaroo on Tue Jan 15, 2019 6:28 pm, edited 1 time in total.
penumbra
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Re: Can I afford a 50k car? If so, whats the best way to do it?

Post by penumbra »

My father-in-law always said that when you get an idea like that, just lie down til it goes away. You’ll be happier in the long run.

My own experience has borne that out. I thought I wanted a ‘39 Chevy. Thank the lord I didn’t buy it. What was I thinking? Not sure your parents scrimped and saved so you could buy a Chevelle. But you probably have an idea. Maybe they did?

Good luck!!
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Toons
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Re: Can I afford a 50k car? If so, whats the best way to do it?

Post by Toons »

Pay Cash








:idea: :idea:
"One does not accumulate but eliminate. It is not daily increase but daily decrease. The height of cultivation always runs to simplicity" –Bruce Lee
SeaToTheBay
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Re: Can I afford a 50k car? If so, whats the best way to do it?

Post by SeaToTheBay »

It sounds like you have a decent savings plan despite having a pile of money on the side - that's great. Have you thought about a Roth IRA?

Maybe there is a less expensive car that will deliver 80 or 90% or what you're looking for? The flip-flop between a classic muscle car and leasing a new car say to me you don't necessarily want something specific, just something that you will enjoy and appreciate.

As a car nut, I have upgraded to an '11 BMW M3 and '07 Lotus Elise (largely because I have not bought or leased newer cars that depreciate a lot) but, truth be told, my past $13k Honda S2000 and my first car, a modified Acura Integra I used to race and sold for $3k, were nearly as much fun. If our finances truly hit the skids, I could sell the cars and get something much cheaper that I'd still be happy with. There is a whole heap of fun cars I'd love to own at every price point from $5k to $5M - are you sure it would take $50k?
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Re: Can I afford a 50k car? If so, whats the best way to do it?

Post by whodidntante »

livesoft wrote: Tue Jan 15, 2019 6:00 pm You can afford a $50K car as long as you pay $30K or less for it. That's what I do.
Pffft. Why not 20k?
MotoTrojan
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Re: Can I afford a 50k car? If so, whats the best way to do it?

Post by MotoTrojan »

penumbra wrote: Tue Jan 15, 2019 6:27 pm My father-in-law always said that when you get an idea like that, just lie down til it goes away. You’ll be happier in the long run.

My own experience has borne that out. I thought I wanted a ‘39 Chevy. Thank the lord I didn’t buy it. What was I thinking? Not sure your parents scrimped and saved so you could buy a Chevelle. But you probably have an idea. Maybe they did?

Good luck!!
I really like that quote. OP, perhaps rent one!
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Re: Can I afford a 50k car? If so, whats the best way to do it?

Post by MotoTrojan »

Captain kangaroo wrote: Tue Jan 15, 2019 6:20 pm
MotoTrojan wrote: Tue Jan 15, 2019 6:18 pm
Captain kangaroo wrote: Tue Jan 15, 2019 6:16 pm
MotoTrojan wrote: Tue Jan 15, 2019 6:12 pm How is the $1.3M invested (is it)? You have $2M at age 30 so you can do whatever you want, assuming you live comfortably on your $60K minimum salary. You are in a position to retire early should you desire, which this won't help. I assume given the age of this car that maintenance will be significant. Do you have a garage and plan to work on it yourself?

The 1.3 is held, and invested, by a Trust company. It is around 80/30 stock and muni bonds split. I don't have a garage, but a friend does who is a mechanic and could help with most things.
Leveraged bonds or typo (I am guessing the latter)?
No leveraged bonds. The fixed income portion is all Municipal Bonds.
80 + 30 is > 100 (hence my leveraged comment).
MotoTrojan
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Re: Can I afford a 50k car? If so, whats the best way to do it?

Post by MotoTrojan »

Captain kangaroo wrote: Tue Jan 15, 2019 6:26 pm
MotoTrojan wrote: Tue Jan 15, 2019 6:19 pm
stoptothink wrote: Tue Jan 15, 2019 6:17 pm
SeaToTheBay wrote: Tue Jan 15, 2019 6:09 pm How did you get to $600K taxable and more in IRA at your age and income? Just curious - that's some serious saving and/or investment income!
My guess is the same way that OP has a $1.3M trust.
If that is the case, I'd be curious what the OPs savings rate is. If it is quite low, I would suggest they save up cash to buy the car (or at a minimum to pay the down payment). Little concerned by their willingness to sell taxable assets (I presume equities with capital gains) in order to pay the down payment.

$2M is enough to fund retirement if it growths without being messed with for 1-2 decades, but getting in the habit of eating away at the taxable brokerage is dangerous.
I agree. I really don't want to have to sell anything in my taxable account. It is just one of the options I have to fund this endeavor I guess.

In terms of my saving rate, I have automatic transfers setup and invest 33% of each paycheck into my taxable brokerage. I have a separate savings account with 1 year of expenses in it that I don't touch. The remaining 66% of my paycheck just goes into my checking for bills, dining out, misc. things.

The more I talk about it, the more I realize it might not be such a good idea.
No 401k? Roth?
bgf
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Re: Can I afford a 50k car? If so, whats the best way to do it?

Post by bgf »

2mm net worth all invested plus 60-75k wages. yes, you can buy a 50k car that may even appreciate in value.

dont run up lots of consumer debt and dont do anything stupid with the investments and youre on autopilot.
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Re: Can I afford a 50k car? If so, whats the best way to do it?

Post by Ron »

penumbra wrote: Tue Jan 15, 2019 6:27 pm My father-in-law always said that when you get an idea like that, just lie down til it goes away. You’ll be happier in the long run.
Don't pray for what you desire; pray to lose the desire...

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Kenkat
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Re: Can I afford a 50k car? If so, whats the best way to do it?

Post by Kenkat »

I wouldn’t buy a classic car like a 67 Chevelle if I couldn’t garage it.

On the plus side, there’s a decent chance that car holds its value and you could sell it for a good price in the future if you change your mind.

You might also think about buying a few years old Camaro SS or Mustang GT - a 2014-16 maybe. You could get something with all the modern conveniences and plenty of performance for about half the price. It’s a different thing though, I get that.
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Re: Can I afford a 50k car? If so, whats the best way to do it?

Post by Olemiss540 »

MotoTrojan wrote: Tue Jan 15, 2019 6:12 pm How is the $1.3M invested (is it)? You have $2M at age 30 so you can do whatever you want, assuming you live comfortably on your $60K minimum salary. You are in a position to retire early should you desire, which this won't help. I assume given the age of this car that maintenance will be significant. Do you have a garage and plan to work on it yourself?
Yes. The 30 year old multimillionaire living on less than 40k per year needs to make sure they know how to change out wheel bearings. If I was 30 and a multimillionaire, probably wouldn't even risk getting the car up on a jack as I would have it made regardless of which mechanic came to my house to repair my vehicles....
I hold index funds because I do not overestimate my ability to pick stocks OR stock pickers.
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Re: Can I afford a 50k car? If so, whats the best way to do it?

Post by MotoTrojan »

Olemiss540 wrote: Tue Jan 15, 2019 7:02 pm
MotoTrojan wrote: Tue Jan 15, 2019 6:12 pm How is the $1.3M invested (is it)? You have $2M at age 30 so you can do whatever you want, assuming you live comfortably on your $60K minimum salary. You are in a position to retire early should you desire, which this won't help. I assume given the age of this car that maintenance will be significant. Do you have a garage and plan to work on it yourself?
Yes. The 30 year old multimillionaire living on less than 40k per year needs to make sure they know how to change out wheel bearings. If I was 30 and a multimillionaire, probably wouldn't even risk getting the car up on a jack as I would have it made regardless of which mechanic came to my house to repair my vehicles....
If they have to ask whether they can afford it, I think it’s reasonable to ask if they have projected the total cost of ownership.
auggiedoggies
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Re: Can I afford a 50k car? If so, whats the best way to do it?

Post by auggiedoggies »

You can absolutely afford it. You've got $2 million as a 30 year old (doesn't matter how you've got it, you have it). You can afford a $50k car, especially one that will likely hold it's value, and potentially even appreciate in value.
scottgekko
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Re: Can I afford a 50k car? If so, whats the best way to do it?

Post by scottgekko »

If you're going to buy a 'fun' car buy the classic. A '67 Chevelle will at least retain value if not appreciate so you won't 'lose' money like you would buying or leasing a brand new toy. My main concern though is you mention living in an apartment. Will you be able to keep the car in covered or garage parking? If it's a covered parking with everyone else's cars, expect door dings. If you don't have covered parking or a garage, please don't let a classic car sit outside. Even under a cover, they will deteriorate quickly.

Also, can you work on the car? My dad has a '66 SS Chevelle and a '32 Ford coupe and there is always something that needs adjusting or fixing (carburetor, brake lines, clutch, etc) and his cars are in very good condition. If you're not mechanically inclined, it gets expensive quick to have someone do the work for you.
Last edited by scottgekko on Wed Jan 16, 2019 12:14 pm, edited 1 time in total.
Olemiss540
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Re: Can I afford a 50k car? If so, whats the best way to do it?

Post by Olemiss540 »

MotoTrojan wrote: Wed Jan 16, 2019 12:02 pm
Olemiss540 wrote: Tue Jan 15, 2019 7:02 pm
MotoTrojan wrote: Tue Jan 15, 2019 6:12 pm How is the $1.3M invested (is it)? You have $2M at age 30 so you can do whatever you want, assuming you live comfortably on your $60K minimum salary. You are in a position to retire early should you desire, which this won't help. I assume given the age of this car that maintenance will be significant. Do you have a garage and plan to work on it yourself?
Yes. The 30 year old multimillionaire living on less than 40k per year needs to make sure they know how to change out wheel bearings. If I was 30 and a multimillionaire, probably wouldn't even risk getting the car up on a jack as I would have it made regardless of which mechanic came to my house to repair my vehicles....
If they have to ask whether they can afford it, I think it’s reasonable to ask if they have projected the total cost of ownership.
Agreed. Had you asked that question, then it would seem we would be in agreement entirely.
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Re: Can I afford a 50k car? If so, whats the best way to do it?

Post by bloom2708 »

Buy something that was $70k and is now $25 to $30k.

If you rent, what are your garage/storage options? Does your other car now sit outside?

If this car has to sit outside, that would be a hard "no". The elements and stupid people are just too tough on cars.

Buy used. Insist on one with a door ding. That way, your first door ding will match and you won't feel bad.

If you are in law enforcement, will you enjoy the 0-30 as fast as the car in front of you? 0-20 in a school zone? :wink:
"We are here to provoke thoughtfulness, not agree with you." Unknown Boglehead
Admiral
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Re: Can I afford a 50k car? If so, whats the best way to do it?

Post by Admiral »

Here's a 1968 Chevrolet Chevelle SS 396 Convertible, asking price is $25k.

There, I just saved you $25k!

Plus: Convertible. Hello!

:D

Shop around!

https://bringatrailer.com/listing/1968- ... -ss-396-3/
zubinh
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Re: Can I afford a 50k car? If so, whats the best way to do it?

Post by zubinh »

Ask yourself this. If your parents were alive and you asked them if they considered spending $50k on a 67 Chevy squandering an inheritance, what would their response be?

If you think they would've said yes, then I would not buy the car. If you think they would've told you, "whatever makes you happy" then go for it.
Admiral
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Re: Can I afford a 50k car? If so, whats the best way to do it?

Post by Admiral »

zubinh wrote: Wed Jan 16, 2019 12:30 pm Ask yourself this. If your parents were alive and you asked them if they considered spending $50k on a 67 Chevy squandering an inheritance, what would their response be?

If you think they would've said yes, then I would not buy the car. If you think they would've told you, "whatever makes you happy" then go for it.
Spending $50k is squandering nearly $2m? How do you figure? It's a few percent.

It's the OP's money, not the parents money now. It's up to the living, not the dead, on how the money is used.
Potential
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Re: Can I afford a 50k car? If so, whats the best way to do it?

Post by Potential »

Admiral wrote: Wed Jan 16, 2019 12:29 pm Here's a 1968 Chevrolet Chevelle SS 396 Convertible, asking price is $25k.

There, I just saved you $25k!

Plus: Convertible. Hello!

:D

Shop around!

https://bringatrailer.com/listing/1968- ... -ss-396-3/
That car did not hit the reserve price and thus did not sell.

Bring A Trailer is a high quality website with even higher quality commentators and their knowledge. They will snuff out any funny business within a day. The website also has some of the cheapest auction fees around for both buyer and seller.

I hope OP gets something fun, Bring A Trailer has so many great cars going up for sale every day. A car for every budget. I do agree with others that OP should get a garage before purchasing.

And No I was not sponsored by BaT to post this, I've been viewing before the auction side came about.
Last edited by Potential on Wed Jan 16, 2019 12:37 pm, edited 1 time in total.
Bacchus01
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Re: Can I afford a 50k car? If so, whats the best way to do it?

Post by Bacchus01 »

zubinh wrote: Wed Jan 16, 2019 12:30 pm Ask yourself this. If your parents were alive and you asked them if they considered spending $50k on a 67 Chevy squandering an inheritance, what would their response be?

If you think they would've said yes, then I would not buy the car. If you think they would've told you, "whatever makes you happy" then go for it.
"Squandering an inheritance" is such a judgmental statement. It implies that one is entitled to their parents money. You aren't. I hope my parents spend every possible penny enjoying themselves.
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Re: Can I afford a 50k car? If so, whats the best way to do it?

Post by Bacchus01 »

Captain kangaroo wrote: Tue Jan 15, 2019 5:58 pm Turning 30 this year (30 is the new 50) and want to buy myself a fun car to enjoy on my time off.

Barebones of my financial situation:
60,000 - 75,000 a year ( depending how much OT I feel like working, law enforcement position)
1.3 million in an irrevocable trust I have no access to until 40's
600,000 in my taxable brokerage
175,000 IRA
No debt, currently rent an apartment in a pretty middle of the road cost of living area.

At first glance, it looks like I would have no problem affording it, but 50,000 is still a big hit. My initial thought it just put around 15,000 down from my taxable brokerage and just take a pretty big monthly payment. Another thought would be I could put a lot less down and lease something? Or just don't do it all together lol.

edit: In case anyone is wondering, it is a 67 Chevy Chevelle SS I am looking at.
My first response was going to be "Can you? Yes. Of course you can. Should you? Probably not."

Then I read it was a '67 Chevelle. If you buy it right, you will likely lose a little money at worst, and make a little money at best. Go for it.

That said, I wouldn't spend $50K. There are a LOT of quality 60-70s cars for $25-$35K that will bring you a lot of enjoyment with less risk.
Bacchus01
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Re: Can I afford a 50k car? If so, whats the best way to do it?

Post by Bacchus01 »

Admiral wrote: Wed Jan 16, 2019 12:29 pm Here's a 1968 Chevrolet Chevelle SS 396 Convertible, asking price is $25k.

There, I just saved you $25k!

Plus: Convertible. Hello!

:D

Shop around!

https://bringatrailer.com/listing/1968- ... -ss-396-3/
If the in-person looks as good as the pics, that's a steal for that car. However, '68 is one of the least desirable years for the Chevelle and it's a restomod, not a restored original car.
Admiral
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Re: Can I afford a 50k car? If so, whats the best way to do it?

Post by Admiral »

Potential wrote: Wed Jan 16, 2019 12:36 pm
Admiral wrote: Wed Jan 16, 2019 12:29 pm Here's a 1968 Chevrolet Chevelle SS 396 Convertible, asking price is $25k.

There, I just saved you $25k!

Plus: Convertible. Hello!

:D

Shop around!

https://bringatrailer.com/listing/1968- ... -ss-396-3/
That car did not hit the reserve price and thus did not sell.

Bring A Trailer is a high quality website with even higher quality commentators and their knowledge. They will snuff out any funny business within a day. The website also has some of the cheapest auction fees around for both buyer and seller.

I hope OP gets something fun, Bring A Trailer has so many great cars going up for sale every day. A car for every budget. I do agree with others that OP should get a garage before purchasing.

And No I was not sponsored by BaT to post this, I've been viewing before the auction side came about.
That was just an example. There are a number of late '70s Chevelles that have sold for far, far less than $50k.
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Re: Can I afford a 50k car? If so, whats the best way to do it?

Post by Jack FFR1846 »

$50k? :shock:

I guess I should let my Ex brother in law know that it's time to sell his 67 Chevelle SS 396 that has been sitting in his garage in a little plastic bubble since the late 70's with the engine out and a small block to drop in while the big block gets rebuilt. Maybe he'll get the 396 rebuilt and drop it in. We always thought it was stupid to keep the ginormous paper weight. (and I'm a car guy) And no, he'll never sell it. He's one of those guys who never sells. Lots of mid year corvettes that need restoration too.
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sergeant
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Re: Can I afford a 50k car? If so, whats the best way to do it?

Post by sergeant »

Yes. Do it. But. You can find your dream car cheaper than 50k. Please start contributing to your 457b account. Just suck up some OT to max out the deferred comp.
AA- 20+ Years of Expenses Fixed Income/The remainder in Equities.
bltn
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Re: Can I afford a 50k car? If so, whats the best way to do it?

Post by bltn »

Captain kangaroo wrote: Tue Jan 15, 2019 6:26 pm
MotoTrojan wrote: Tue Jan 15, 2019 6:19 pm
stoptothink wrote: Tue Jan 15, 2019 6:17 pm
SeaToTheBay wrote: Tue Jan 15, 2019 6:09 pm How did you get to $600K taxable and more in IRA at your age and income? Just curious - that's some serious saving and/or investment income!
My guess is the same way that OP has a $1.3M trust.
If that is the case, I'd be curious what the OPs savings rate is. If it is quite low, I would suggest they save up cash to buy the car (or at a minimum to pay the down payment). Little concerned by their willingness to sell taxable assets (I presume equities with capital gains) in order to pay the down payment.

$2M is enough to fund retirement if it growths without being messed with for 1-2 decades, but getting in the habit of eating away at the taxable brokerage is dangerous.
I agree. I really don't want to have to sell anything in my taxable account. It is just one of the options I have to fund this endeavor I guess.

In terms of my saving rate, I have automatic transfers setup and invest 33% of each paycheck into my taxable brokerage. I have a separate savings account with 1 year of expenses in it that I don't touch. The remaining 66% of my paycheck just goes into my checking for bills, dining out, misc. things.

The more I talk about it, the more I realize it might not be such a good idea.
Captain Kangaroo
Although it took several responses to get some useful advice, I m glad you got it and understood it. I also don t believe it is such a good idea. And I m a car person.
Even though you have the money to buy it, I agree that you should buy something that is no more than 35-40 percent of your income, and should pay mostly cash. I would try to save for it out of my income and not invade my inheritance. Using your inheritance for such things could become a destructive habit that over the years will result in a life style you can t afford. I ve seen that in my family.
That you re saving 1/3 of your pay and have an emergency fund in place tells me you have a good head on your shoulders. I know you understand the importance of the above advice. I m trying to instill these values in my kids.
Don't listen to the guys that make fun of coming to this forum for advice. As usual you ve gotten some mixed information, but I believe you're listening to the right stuff. This is a great site for all financial advice, as you ve discovered.
And you might have guessed, the thread has turned into a car discussion. Might as well put in my two cents. My wife is also a car person. When I met her, she was driving her third Corvette. The first two were stolen. She bought it new and it was 4 years old when we met ,with 28000 miles, in pristine condition. She has always had the best car in the family. Now driving a BMW 650i. Don t marry a car person. !!?!
Best of luck with your accumulation.
BoggledHead2
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Re: Can I afford a 50k car? If so, whats the best way to do it?

Post by BoggledHead2 »

Just lease a luxury car if you want and never worry about maintenance

I’d never sink 50K into such a depreciating asset. I also don’t think I’ll ever spend 50K on a car, but that’s a different story.

If leasing, 0 money down + research the invoice price of the car / money factor. Lease for 3 years, return and get the new toy.

* buy the SS + lease a honda/Toyota for low miles. I’d never want a 50 year old car as my daily
MotoTrojan
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Re: Can I afford a 50k car? If so, whats the best way to do it?

Post by MotoTrojan »

BoggledHead2 wrote: Wed Jan 16, 2019 2:12 pm Just lease a luxury car if you want and never worry about maintenance

I’d never sink 50K into such a depreciating asset. I also don’t think I’ll ever spend 50K on a car, but that’s a different story.

If leasing, 0 money down + research the invoice price of the car / money factor. Lease for 3 years, return and get the new toy.

* buy the SS + lease a honda/Toyota for low miles. I’d never want a 50 year old car as my daily
Depreciation shouldn't be terrible on a 50+ year old car so this could be a better decision (pending actual maintenance costs) financially than getting a new/leased $50K car, especially if mileage is limited (fun-car).
PeterParker
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Re: Can I afford a 50k car? If so, whats the best way to do it?

Post by PeterParker »

With your income, I would say no.

BUT given the 1.3 million trust, you could argue that you don't really need to save much for retirement. (You'd be way ahead of someone making $200k saving even 70% of their income a year after taxes).

So given that little next egg, yes, you can probably swing it. Not to mention the 600k taxable.

Like most things, it depends on what you want to prioritize buying.

Will you be in financial ruin because of it? No.

If I were in your shoes, would i do it. Hmm. 175k IRA. 600k taxable. 1.3 M trust. ~70k income.

Possibly. But I'm not much of a car guy, especially classic cars. I think I might if I knew I would be satisfied with the purchase for the next 8-10 years. And not be one of those things where the 'magic' wears off in a month. Maybe leasing is better in that case. Also I would buy something 2018 model that would last personally. Whether I went luxury or performance would depend on where I lived. I live in Chicago where the streets are clogged and full of pot holes, so a sporty vehicle would be worthless. Probably would just get a reliable luxury vehicle. And not something I'm emotionally invested in much, because with the terrible drivers here, parked cars get dinged all the time. Or I'd just get a cheap reliable Honda and end up taking Uber/ Lyft everywhere like many wealthy people here do, because it's far simpler than figuring out/ finding parking.
Last edited by PeterParker on Wed Jan 16, 2019 2:26 pm, edited 1 time in total.
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FlyAF
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Re: Can I afford a 50k car? If so, whats the best way to do it?

Post by FlyAF »

You're going to keep a 50k classic car outside? It will most likely end up stolen (ok for you, insurance will cover) or worse yet, just deteriorate in the weather and be worth half in a couple of years.

This is coming from someone who owns a classic valued significantly more than 50k. No garage = no toys.
jharkin
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Re: Can I afford a 50k car? If so, whats the best way to do it?

Post by jharkin »

Captain kangaroo wrote: Tue Jan 15, 2019 6:26 pm I agree. I really don't want to have to sell anything in my taxable account. It is just one of the options I have to fund this endeavor I guess.

In terms of my saving rate, I have automatic transfers setup and invest 33% of each paycheck into my taxable brokerage. I have a separate savings account with 1 year of expenses in it that I don't touch. The remaining 66% of my paycheck just goes into my checking for bills, dining out, misc. things.

The more I talk about it, the more I realize it might not be such a good idea.
Instead of putting 1/3 into taxable each check, max out whatever 457s or 403b's you have from the department. With a preference on 457 first because you are well on your way to early retirement and that will be more flexible. This will cut your taxes down significantly and whatever is left put into a Roth IRA and then taxable.

I assume you will be entitled to a state pension as well?

For the car, on an income basis it would be too much for most people, but on an asset/wealth basis its completely fine. And you recognize the fact that you will enjoy it more now than you will at 80....

If you can get really low interest financing and can cashflow it with no impact to lifestyle then go ahead... otherwise take the hit and liquidate some stock to cover it. Maxing out 403/457 deferrals this year might push you into a low enough bracket that the capital gains taxes are minimal or even zero.
alfaspider
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Re: Can I afford a 50k car? If so, whats the best way to do it?

Post by alfaspider »

A classic car is a different proposition from a daily driver. It's not going to depreciate (although that does not mean the value won't go down due to market forces). The real costs to owning one is not the purchase price, but the maintenance and storage.

If you don't have a garage, I would advise to stop: do not pass go, do not collect $200. You need to be able to work on the car yourself- old cars require a lot more TLC than modern ones. Even if you are not a mechanic, you really don't want to have to rely on one for every little thing. Also, when you get a car with significant classic value, things that would be no big deal in a daily driver (parking lot dings, faded paint from the sun), can result in huge financial hits when it comes time to sell.

If you are talking about just getting a "fun" car, there are a lot of very fun cars that don't cost anywhere near $50,000 and can be stored outside without any undue worry. I'd also be a bit worried about buying a classic from that era. Right now, there is still a lot of baby boomer money buying 60s American Muscle. The problem is in 10-15 years is most of those baby boomers are going to be dead or in a nursing home and those muscle cars are going to go up for auction. While there are certainly younger folks such as yourself interested in such cars, I think the number is a lot less than than the number of baby boomers.
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