At what HHI would you feel comfortable buying an $80-90k car?

[Anonymous]

Most people are leasing these cars. Not buying. Leasing has allowed people to drive more expensive cars than they can afford or would want to spend buying. The problem is that you have a car payment for life that only increases over time. Most luxury cars are leased.

[Anonymous]

Anonymous wrote:Most people are leasing these cars. Not buying. Leasing has allowed people to drive more expensive cars than they can afford or would want to spend buying. The problem is that you have a car payment for life that only increases over time. Most luxury cars are leased.

That may be true but when shopping for a car this year I found the 80-100k cars I looked at didn’t have any particularly good leasing specials. Still a lower monthly payment than buying but not a significant difference. In the end I decided to buy with a 5 year loan.

[Anonymous]

My last car cost 20% of my income and was easily absorbed into my budget. So, $400k.

[Anonymous]

It’s all dependent on your priorities and what your other expenses are. Empty nesters could definitely afford it at $400k maybe even a bit less. Nice house in the city with 3 kids in private might need $1.5M to $2M to comfortably afford it. Personally I wouldn’t spend that much on a car with a $5M income, but I’m not a car guy. That said I’d spend more than most on a house or a vacation. It’s just personal preference.

[Anonymous]

Anonymous wrote:

Anonymous wrote:Most people are leasing these cars. Not buying. Leasing has allowed people to drive more expensive cars than they can afford or would want to spend buying. The problem is that you have a car payment for life that only increases over time. Most luxury cars are leased.

That may be true but when shopping for a car this year I found the 80-100k cars I looked at didn’t have any particularly good leasing specials. Still a lower monthly payment than buying but not a significant difference. In the end I decided to buy with a 5 year loan.

It hasn’t been good to lease cars since COVID started. Pre-COVID you can lease a $80k car for ~$800/month with $0 down. Now you’ll be lucky if it’s double that. A lot of people with a lease ending are buying out the lease now.

[Anonymous]

I think a luxury car at 2 months gross income is fine. 3 months is a stretch, and 1 month is very comfortable.

[Anonymous]

Anonymous wrote:It’s all dependent on your priorities and what your other expenses are. Empty nesters could definitely afford it at $400k maybe even a bit less. Nice house in the city with 3 kids in private might need $1.5M to $2M to comfortably afford it. Personally I wouldn’t spend that much on a car with a $5M income, but I’m not a car guy. That said I’d spend more than most on a house or a vacation. It’s just personal preference.

Definately personal preference and how you choose to budget.
Would never lease a car, luxury or not, simply not a good financial plan.

I drive a luxury car ($55K) and partner drives a $65K luxury car. But mine is 12 yo and partners is 8. So we buy and pay cash for luxury cars and then keep them for a long time. I could sell mine for almost $20K right now due to the car shortage, but it's worth much more to me. It will be another 2 years before I replace, unless there are some major issues that appear. So basically we buy luxury cars with cash and keep for a long time, and will pay cash for next cars when we buy. Perks of keeping them so long---auto insurance is much lower with the older vehicles.

[Anonymous]

We are currently at 400k hhi, and need a new car. We are thinking about 42k (pretax). So where would we be comfortable with 80k? I dunno, maybe 600k hhi? But we will never get there. We are pretty close to maxed out in our jobs for pay, so I guess functionally never.

[Anonymous]

Anonymous wrote:

Anonymous wrote:It’s all dependent on your priorities and what your other expenses are. Empty nesters could definitely afford it at $400k maybe even a bit less. Nice house in the city with 3 kids in private might need $1.5M to $2M to comfortably afford it. Personally I wouldn’t spend that much on a car with a $5M income, but I’m not a car guy. That said I’d spend more than most on a house or a vacation. It’s just personal preference.

Definately personal preference and how you choose to budget.
Would never lease a car, luxury or not, simply not a good financial plan.

I drive a luxury car ($55K) and partner drives a $65K luxury car. But mine is 12 yo and partners is 8. So we buy and pay cash for luxury cars and then keep them for a long time. I could sell mine for almost $20K right now due to the car shortage, but it's worth much more to me. It will be another 2 years before I replace, unless there are some major issues that appear. So basically we buy luxury cars with cash and keep for a long time, and will pay cash for next cars when we buy. Perks of keeping them so long---auto insurance is much lower with the older vehicles.

We have under $200K and pay cash for our last $50K vehicle. We save, keep them till they die, etc. Our insurance was the same with the new vehicle as it was the old one. I was kinda surprised when it was the same. I didn't want to ask how much of a differene it would be worried it would go way up.

[Anonymous]

Anonymous wrote:I’d do it now at 500k, just not a car person.

What would the payment be in something like that? 1.3k/mo with some money down? That’s just noise.

After all my deductions, including 2 401k, health, HSA I’m bringing in nearly 25k/mo. I’m not gonna miss 1300.

This and my car was in the $80-$90k range. Payment is just over $1000. It’s only a few hundred more than a Toyota would be. It’s a rounding error.

[Anonymous]

Anonymous wrote:Never


Cars are a waste of money..

Even the billionaire founder of Ikea recognizes as such.

You don't get wealthy pissing away money down the drain on assets that lose.huge amounts of money.. tell me what your Porsche and Ferrari can do that a Toyota 4 runner or a Honda civic can't do. Big whoop, you can go 200 mph faster......that doesn't help me during 99.99999999)% of my daily life.

And that is why many of us won't spend that much until we have retirement set, college set and 6-9 month emergency fund set, oh and that we could pay cash for the vehicle as well. At that point, you can choose to spend on that luxury IMO. Or not. Because you are right, it's a luxury that you don't "need" But I also don't need to eat out 5 times per week, take a trip to Hawaii or Europe, but I choose to save for those and do it as well

[Anonymous]

Anonymous wrote:Most people are leasing these cars. Not buying. Leasing has allowed people to drive more expensive cars than they can afford or would want to spend buying. The problem is that you have a car payment for life that only increases over time. Most luxury cars are leased.

Not a smart financial move really. If you cannot afford to pay cash for a luxury car, IMO you shouldn't be driving one.

[Anonymous]

Anonymous wrote:Never


Cars are a waste of money..

Even the billionaire founder of Ikea recognizes as such.

You don't get wealthy pissing away money down the drain on assets that lose.huge amounts of money.. tell me what your Porsche and Ferrari can do that a Toyota 4 runner or a Honda civic can't do. Big whoop, you can go 200 mph faster......that doesn't help me during 99.99999999)% of my daily life.

+ 1, but: start walking or biking and stop complaining about getting fatter and fatter.

[Anonymous]

Anonymous wrote:

Anonymous wrote:Never


Cars are a waste of money..

Even the billionaire founder of Ikea recognizes as such.

You don't get wealthy pissing away money down the drain on assets that lose.huge amounts of money.. tell me what your Porsche and Ferrari can do that a Toyota 4 runner or a Honda civic can't do. Big whoop, you can go 200 mph faster......that doesn't help me during 99.99999999)% of my daily life.

And that is why many of us won't spend that much until we have retirement set, college set and 6-9 month emergency fund set, oh and that we could pay cash for the vehicle as well. At that point, you can choose to spend on that luxury IMO. Or not. Because you are right, it's a luxury that you don't "need" But I also don't need to eat out 5 times per week, take a trip to Hawaii or Europe, but I choose to save for those and do it as well

+1. How do people not understand this? The people who say luxury cars are a waste..do you never go on vacation? People get joy out of different things.

[Anonymous]

It’s not my priority - and I feel like I can get an equivalent car cheaper, so never. Except with inflation this May actually be the cost of a normal nice car soon.