If you like cars, what is a reasonable car price based on income

[Anonymous]

Anonymous wrote:

Anonymous wrote:My new neighbor just paid 600K for a house. They have two BMW. I would think 2 BMWs would mean they can buy more expensive house, but maybe they just like cars and bought less of a house? Or had money saved? Or they can't afford more of a house because their car payments are a lot? Who knows, people who like cars find excuses to get the cars they like, I suppose.

Agree. IMHO, that's a priority problem and probably an outward sign that you are dealing with a poor trying to put on airs. I'd rather have a Honda and a Toyota and not live in a shit shack. Is this in Ashburn? Sounds typical for Ashburn. Almost a requirement to move there.

Or maybe they just like the house that cost $600K. Why pay $2M for a house if you like the $600K one just fine??

And presumably if PP lives next door, he/she must not thing the neighborhood is horrible.

[Anonymous]

One of the weird things about uber fancy/expensive cars is they are most valuable when parked so someone can tell it is yours. It is not much different from any other luxury brand like a handbag -- the value is in the status not the performance or quality overall. But as others have said, it is mostly a priority issue, and yes, people with fancy cars will find a way to justify it financially. They generally do not last longer, which would be one way to justify them.

[Anonymous]

Anonymous wrote:One of the weird things about uber fancy/expensive cars is they are most valuable when parked so someone can tell it is yours. It is not much different from any other luxury brand like a handbag -- the value is in the status not the performance or quality overall. But as others have said, it is mostly a priority issue, and yes, people with fancy cars will find a way to justify it financially. They generally do not last longer, which would be one way to justify them.

Not really, we have german luxury cars and they are vastly superior to any regular commuter car. Especially in performance and quality.

[Anonymous]

I’m not a car person, but DH is and he convinced me to get a used E350. I used to think, like many on this thread, that it didn’t matter what I drove and there was no descernable difference between a Honda and a Mercedes. And the truth is, when I commuted in rush hour traffic with average speed of <20 mph, it pretty much didn’t make a difference. But when I switched jobs and got a 70 mile round trip highway commute that was against traffic so I could go full speed... I definitely felt the difference.

[Anonymous]

Anonymous wrote:I’m not a car person, but DH is and he convinced me to get a used E350. I used to think, like many on this thread, that it didn’t matter what I drove and there was no descernable difference between a Honda and a Mercedes. And the truth is, when I commuted in rush hour traffic with average speed of <20 mph, it pretty much didn’t make a difference. But when I switched jobs and got a 70 mile round trip highway commute that was against traffic so I could go full speed... I definitely felt the difference.

70 mile round trip means you either live in or commute to the hinterlands. Which is it?

[Anonymous]

Anonymous wrote:

Anonymous wrote:I’m not a car person, but DH is and he convinced me to get a used E350. I used to think, like many on this thread, that it didn’t matter what I drove and there was no descernable difference between a Honda and a Mercedes. And the truth is, when I commuted in rush hour traffic with average speed of <20 mph, it pretty much didn’t make a difference. But when I switched jobs and got a 70 mile round trip highway commute that was against traffic so I could go full speed... I definitely felt the difference.

70 mile round trip means you either live in or commute to the hinterlands. Which is it?

Presumably the latter if it's a reverse commute. Lucky to live in an area where reverse commutes still exist--they're all but gone where we live.

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:OP here. We cars for transportation but we like to drive nice cars not clunkers.
Our current cars are 8 years old and it is time for a replacement.
Our HHI is $300k and we have no debt.
We are looking to replace both cars. We would pay up to $50k for each.
DH thinks that this is reasonable for people in our income range.
Based on most answers here, that doesn’t sound crazy. That’s only 33% of our annual income.

Please point to the answer that told you 33% of your annual income on cars wasn't crazy. I'll wait.

The correct answer is to stagger your replacements so you don't buy 2 new cars in one year and get cheaper cars -- or at least one fun car/ one reliable unexciting transport car as a compromise.

See Dave Ramsey link. He’s pretty clear about the value if your cars bot exceeding 50% of your income.
This is a good default rule of thumb for starters.

The same link states the car should be purchased in CASH and should never be brand new until assets exceed $1M. Does that describe you OP? You want to spend $100k IN CASH on these two new cars and have at least $1M in assets?

We could pay cash for one car. But we will put $25k down on each.
Cars won’t be brand new. DH likes to buy 1 yo used cars that have already taken the depreciation hit.
Maybe it will make sense to stagger the purchase as others have suggested.

This is a terrible strategy for some brands. Which ones are you looking at?

Why is it a bad strategy? Please explain. A 1 year old used car is almost new.
We are looking at a Porsche and Mercedes.

[Anonymous]

Anonymous wrote:

Anonymous wrote:One of the weird things about uber fancy/expensive cars is they are most valuable when parked so someone can tell it is yours. It is not much different from any other luxury brand like a handbag -- the value is in the status not the performance or quality overall. But as others have said, it is mostly a priority issue, and yes, people with fancy cars will find a way to justify it financially. They generally do not last longer, which would be one way to justify them.

Not really, we have german luxury cars and they are vastly superior to any regular commuter car. Especially in performance and quality.

Define quality. Does quality mean that it has a nice interior and you feel fancy driving it or being seen in it or does quality mean that it is built well, is reliable and doesn't require anything outside of regularly scheduled maintenance. I've owned German cars and Japanese "commuter" cars and I can tell you that my German cars were a LOT more problematic than their Japanese counterparts.

[Anonymous]

Anonymous wrote:One of the weird things about uber fancy/expensive cars is they are most valuable when parked so someone can tell it is yours. It is not much different from any other luxury brand like a handbag -- the value is in the status not the performance or quality overall. But as others have said, it is mostly a priority issue, and yes, people with fancy cars will find a way to justify it financially. They generally do not last longer, which would be one way to justify them.

Are you serious? If you don’t feel the difference between a standard and a luxury car, you must be very ignorant or you have never driven one.
Can you see and feel the difference between a $200 couch made of fake leather and a $1000 couch made of premium leather?
Can you see the difference between a table made of cheap particleboard and one made of premium solid wood?
Which ones would you buy to furnish your home?
Luxury brands use top premium materials in their interior cabins and offer a lot of premium features. We pay for these bells and whistles.

[Anonymous]

Anonymous wrote:One of the weird things about uber fancy/expensive cars is they are most valuable when parked so someone can tell it is yours. It is not much different from any other luxury brand like a handbag -- the value is in the status not the performance or quality overall. But as others have said, it is mostly a priority issue, and yes, people with fancy cars will find a way to justify it financially. They generally do not last longer, which would be one way to justify them.

Your opinion. For me, if DH and I were the only people on earth, I’d drive a ridiculous luxury car crush I’ve had for 10 yrs (instead I drive a very nice Audi) and DH probably would add the fancy Porsche he’ll never buy.

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:OP here. We cars for transportation but we like to drive nice cars not clunkers.
Our current cars are 8 years old and it is time for a replacement.
Our HHI is $300k and we have no debt.
We are looking to replace both cars. We would pay up to $50k for each.
DH thinks that this is reasonable for people in our income range.
Based on most answers here, that doesn’t sound crazy. That’s only 33% of our annual income.

Please point to the answer that told you 33% of your annual income on cars wasn't crazy. I'll wait.

The correct answer is to stagger your replacements so you don't buy 2 new cars in one year and get cheaper cars -- or at least one fun car/ one reliable unexciting transport car as a compromise.

See Dave Ramsey link. He’s pretty clear about the value if your cars bot exceeding 50% of your income.
This is a good default rule of thumb for starters.

The same link states the car should be purchased in CASH and should never be brand new until assets exceed $1M. Does that describe you OP? You want to spend $100k IN CASH on these two new cars and have at least $1M in assets?

We could pay cash for one car. But we will put $25k down on each.
Cars won’t be brand new. DH likes to buy 1 yo used cars that have already taken the depreciation hit.
Maybe it will make sense to stagger the purchase as others have suggested.

This is a terrible strategy for some brands. Which ones are you looking at?

Why is it a bad strategy? Please explain. A 1 year old used car is almost new.
We are looking at a Porsche and Mercedes.

NP. We planned on getting a used car but when we looked at models that were 1-3 years old they were only $2-3,000 less and we wouldn’t qualify for the super low interest rate.

[Anonymous]

Anonymous wrote:

Anonymous wrote:One of the weird things about uber fancy/expensive cars is they are most valuable when parked so someone can tell it is yours. It is not much different from any other luxury brand like a handbag -- the value is in the status not the performance or quality overall. But as others have said, it is mostly a priority issue, and yes, people with fancy cars will find a way to justify it financially. They generally do not last longer, which would be one way to justify them.

Are you serious? If you don’t feel the difference between a standard and a luxury car, you must be very ignorant or you have never driven one.
Can you see and feel the difference between a $200 couch made of fake leather and a $1000 couch made of premium leather?
Can you see the difference between a table made of cheap particleboard and one made of premium solid wood?
Which ones would you buy to furnish your home?
Luxury brands use top premium materials in their interior cabins and offer a lot of premium features. We pay for these bells and whistles.

+1. I can totally see and feel the difference between faux leather and premium leather. There is no comparison and I am willing to pay for that difference. And the suspension/ride in our Mercedes SUV noticeably smoother than our Honda Pilot was. If these types of things don't matter to you that's fine but for some (clearly many in the DC area) they are worth the premium price tag.

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:So cars these days are really about status symbols. Cars are so much better and more reliable that when you choose to spend more say over 40K for a new car you are choosing to make a statement rather than anything to do with longevity or performance. In this area, even a Ferrari will be stuck in traffic most of the time, so it becomes your call. Does 10K to 20K matter to you for a better brand? If so, and you can afford, it, why not, as you are basically just trading that brand for a vacation, your call. But if you think there is a strong correlation between how much you pay for a car and whaty ou will get out of it, well that seems totally wrong.

Totally true that all cars are great.

I don’t buy fancy brands anymore. Just not a priority for me at this time.

But, I can understand that someone wants a car they feel good in- particularly if they commute a decent amount.

If you spend two hours of your working day somewhere, it’s not the craziest idea to make it someplace you want to be

Not all cars are great. They feel differently, they drive differently. Little things like menus and controls matter to me. But I recognize that they may not matter to others.

Fixed that for you.

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:One of the weird things about uber fancy/expensive cars is they are most valuable when parked so someone can tell it is yours. It is not much different from any other luxury brand like a handbag -- the value is in the status not the performance or quality overall. But as others have said, it is mostly a priority issue, and yes, people with fancy cars will find a way to justify it financially. They generally do not last longer, which would be one way to justify them.

Are you serious? If you don’t feel the difference between a standard and a luxury car, you must be very ignorant or you have never driven one.
Can you see and feel the difference between a $200 couch made of fake leather and a $1000 couch made of premium leather?
Can you see the difference between a table made of cheap particleboard and one made of premium solid wood?
Which ones would you buy to furnish your home?
Luxury brands use top premium materials in their interior cabins and offer a lot of premium features. We pay for these bells and whistles.

+1. I can totally see and feel the difference between faux leather and premium leather. There is no comparison and I am willing to pay for that difference. And the suspension/ride in our Mercedes SUV noticeably smoother than our Honda Pilot was. If these types of things don't matter to you that's fine but for some (clearly many in the DC area) they are worth the premium price tag.

There's a third category, I think.

There's the people to whom they matter a great deal, who appreciate the performance and ride aspects (like you). There's the people to whom they don't matter at all, for any number of reasons (like me - my round trip commute is 11 miles and 34 minutes on not well maintained roads, and if I get above 35 mph I get a speed camera ticket). And then there are the people for whom the label and status *are* the most important things. I understand that isn't you, or your more aggressive fellow traveler above, but there are a lot of those people out there. And the DC area has more than its fair share.

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:One of the weird things about uber fancy/expensive cars is they are most valuable when parked so someone can tell it is yours. It is not much different from any other luxury brand like a handbag -- the value is in the status not the performance or quality overall. But as others have said, it is mostly a priority issue, and yes, people with fancy cars will find a way to justify it financially. They generally do not last longer, which would be one way to justify them.

Are you serious? If you don’t feel the difference between a standard and a luxury car, you must be very ignorant or you have never driven one.
Can you see and feel the difference between a $200 couch made of fake leather and a $1000 couch made of premium leather?
Can you see the difference between a table made of cheap particleboard and one made of premium solid wood?
Which ones would you buy to furnish your home?
Luxury brands use top premium materials in their interior cabins and offer a lot of premium features. We pay for these bells and whistles.

+1. I can totally see and feel the difference between faux leather and premium leather. There is no comparison and I am willing to pay for that difference. And the suspension/ride in our Mercedes SUV noticeably smoother than our Honda Pilot was. If these types of things don't matter to you that's fine but for some (clearly many in the DC area) they are worth the premium price tag.

There's a third category, I think.

There's the people to whom they matter a great deal, who appreciate the performance and ride aspects (like you). There's the people to whom they don't matter at all, for any number of reasons (like me - my round trip commute is 11 miles and 34 minutes on not well maintained roads, and if I get above 35 mph I get a speed camera ticket). And then there are the people for whom the label and status *are* the most important things. I understand that isn't you, or your more aggressive fellow traveler above, but there are a lot of those people out there. And the DC area has more than its fair share.

Group 1: mid level cars

Group 2: luxury cars that actually have luxury in them - heated seats, leather, etc. Big difference between group 1 and group 2.

Group 3: crap cars that pretend to be luxury and it’s all about status. Maserati is one of these. Case in point - the Ghibli uses parts from a Dodge DART. Literally identical.

https://m.youtube.com/watch?v=nOZnqnB6xDo