How are there so many $60, $70, $80+ thousand dollar cars on the road??

[Anonymous]

Anonymous wrote:When I saw a fancy, expensive new car on the road I used to think that person must be really good with money. Now I know that they are pretty stupid with money.

Precisely. Cars are depreciating assets and false shields that weak people hide behind.

[Anonymous]

Anonymous wrote:Just shut up. $600k HHI with public school and you are wondering? Either you are not too bright or…?

DP
You sound jealous and mean.

OP - I wonder the same. Honestly, I think many people lease, which I refuse to do.

[Anonymous]

Anonymous wrote:We are likely considered ultra high net worth but I’m not a car guy. I drive a six year old Porsche Macan demo I bought with 5k miles and about a 30% discount. But I fly first class so I’m not terribly frugal. My wife drives a Subaru SUV.

Because people prioritize their "luxuries". I'm with you---I'd much rather drive a Honda/Toyota/subaru and fly first/business. Easy choice. But there will be someone who can do both and just "gives up something else". Because at UHNW, you could prioritize both of those easily

[Anonymous]

Anonymous wrote:When I saw a fancy, expensive new car on the road I used to think that person must be really good with money. Now I know that they are pretty stupid with money.

At least half are. Others are financially smart. I've paid cash for 8 cars since 2000. 4 were 30-45K, the other 4 were 45-65K. All driven 8+ years and sold for at least 20-25% of what we paid for them.

[Anonymous]

Anonymous wrote:

Anonymous wrote:When I saw a fancy, expensive new car on the road I used to think that person must be really good with money. Now I know that they are pretty stupid with money.

Precisely. Cars are depreciating assets and false shields that weak people hide behind.

No plenty of us are aware they are a luxury. But if you are HNW or UHNW, it's a luxury you can choose to spend on. That being said, we still keep them for 8-10+ years. Sure a Honda would last just as long, but we like driving luxury/fun cars. We pay cash for them, so it's affordable for us

[Anonymous]

Anonymous wrote:We make a very good living - HHI over $600k. We have three kids in public school and a modest, but nice house. It's expensive of course given the area. Life in general is expensive in this area, as we all know! Apart from the house, we are pretty frugal.

I've been looking into a buying new car and initially aspired to something in the luxury area - a BMW, Audi, or something like that. But I was blown away by the prices. Cars are crazy expensive! There's just no way I can justify spending 60k or 70k on a vehicle. But when I drive around, it seems like every other car is BMW, Tesla, MB, Range Rover, etc - all of which cost $$$$.

So how is it possible that SO many people are buying super expensive cars? At my current income level - which I'm quite happy with - I would never feel comfortable spending that much on a vehicle. Who are all these people???

It’s all about your priorities, OP. I drove a $100k+ can in my early 30s, making about $200k/year. I loved every moment of it. My income quadrupled since, but with kids, house, etc, we drive a minivan and another modest car.

[Anonymous]

Car loans…

[Anonymous]

Anonymous wrote:

Anonymous wrote:When I saw a fancy, expensive new car on the road I used to think that person must be really good with money. Now I know that they are pretty stupid with money.

Precisely. Cars are depreciating assets and false shields that weak people hide behind.

There is a lot of money around DC. I do mean *a lot of money*. You'd be foolish to think people with fancy cars are struggling with loans and debts. The reality is simply that there are a lot of high earning households around the DMV and in Maryland and Virginia. People have a lot of money. How many times do I need to drive home this point.

[Anonymous]

Another angle no one has mentioned is that luxury cars have actually gotten cheaper when adjusting for inflation compared to 20-30 years ago. In 2000, 30k was the entry point for a BMW or Audi. Today it's in the low 40s. But in 2000, 30k was the annual tuition at an expensive private college, which is now pushing 90k! Housing has more than doubled in value in the last 20 years for most major areas.

[Anonymous]

Anonymous wrote:I have one kid in college and one in high school. I’m 44, we make a variable income, but usually around 500-650k/yr. After my mega roth, both our 401ks, his ESPP and our HSA straight out of our checks go 96k towards employer based retirement/investments. we then have another 48k that goes into taxable brokerage.

our mortgage is low (we’ve been homeowners since 2001 so have traded up and up[b]), we have a couple of cash flow positive rentals, and did 529 so we don’t have college expenses.

this leaves so so much money left over. Maybe you save more than us, but we should retire with 6M in equities, and a few more million in real estate. It’s not a stretch for my Genesis., which I just spend 80k on. we had kids early and had to get serious early so we are smooth sailing at this point in our lives.

How did you buy a house at age 20?

[Anonymous]

Your numbers don't make any sense, OP.

We make $600K and pay enough private school tuition (close to $100K) that's as if we bought a luxury car every year and then threw it out and bought another car yearly.

And we still live a great lifestyle because even with $100k off the top we start with more income than the vast majority (90%+) households in the DMV.

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:When I saw a fancy, expensive new car on the road I used to think that person must be really good with money. Now I know that they are pretty stupid with money.

Precisely. Cars are depreciating assets and false shields that weak people hide behind.

No plenty of us are aware they are a luxury. But if you are HNW or UHNW, it's a luxury you can choose to spend on. That being said, we still keep them for 8-10+ years. Sure a Honda would last just as long, but we like driving luxury/fun cars. We pay cash for them, so it's affordable for us

Exactly! DH and I are HNW as well and we and all our friends share the same vantage point and philosophy. There are many luxuries we choose to spend our money on, many outside the reach of the poors. Doesn’t mean we’re weak or hiding behind shields. In addition to driving luxury roadsters and SUVs, our other favorite way to spend money is like this:

https://m.imdb.com/title/tt0111323/

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:When I saw a fancy, expensive new car on the road I used to think that person must be really good with money. Now I know that they are pretty stupid with money.

Precisely. Cars are depreciating assets and false shields that weak people hide behind.

There is a lot of money around DC. I do mean *a lot of money*. You'd be foolish to think people with fancy cars are struggling with loans and debts. The reality is simply that there are a lot of high earning households around the DMV and in Maryland and Virginia. People have a lot of money. How many times do I need to drive home this point.

Disappointing that all this money translates into the driving of luxury cars for personal satisfaction as opposed to the opening of charitable foundations for the betterment of society. DH and I have an HHI of $3.6M, yet $2.8M of that goes right out the door and into our own foundation to fund scholarships for kids (girls and minorities, especially) pursuing STEM fields in college. We drive a 2021 Hyundai Elantra and a 2017 Toyota Corolla. Guess we’re just cut from a different cloth.

[Anonymous]

The mean income of the top 5% in this area is roughly $500k according to https://statisticalatlas.com/metro-area/District-of-Columbia/Washington/Household-Income

At that income, you can easily afford a luxury car. Let's say half of the households in that income bracket choose to do so.

half of 5% of the total number of area households = ~54,000 luxury cars for the top 5% of households

Add on top of that all the people who overspend or have generational wealth or "need" a luxury car for work and you have a lot of nice cars floating around. And you, OP, see them through your Observer Bias.

Not a big deal and not shocking.

[Anonymous]

How many threads need to occur for people to conclude that different people prioritize spending in different ways? You may think an 80k car is a waste of money, someone else may think a 10k trip to Europe is a waste of money, another person may think a 15k refrigerator is a waste of money, and still others may think that jewelry, or central air conditioning, or cable tv are.

I don’t really think it’s reasonable to decide not to spend any money on things that technically you could live without or have the less expensive option. We get one life, dying with millions and yet being austere the entire time is just sad.