Reply to how much income or how much savings would you need before buying a $40K car?

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[quote=Anonymous][quote=Anonymous][quote=Anonymous][quote=Anonymous]
Re: only buying a car if you have the cash for it - aside from that not being really smart financial advice, it's just not possible for some of us. We could probably live without a car, but our quality of life would go way way down. Life is full of tradeoffs, in other words.[/quote]
I would narrow this guidance to "only buy an expensive new car if you can pay cash for it."  People do need cars to move around, and must sometimes borrow to buy it, but no one needs a new expensive vehicle to get around. Nothing is more pathetic, in my opinion, than taking a loan to buy or, worse yet, leasing a luxury car. That just screams inferiority complex. [/quote]

Which is why BMW allows you to lease a 5-series for less than it costs to buy a 335.[/quote]

No, BMW "allows" you to do this because the lease price of a car is essentially the expected depreciation of the car over the lease term divided by the number of months in the term. For a five series to cost more to lease than a 335 costs to own, the depreciation of the 5 series during the lease term would have to be larger than the residual value of the 335 after you complete your monthly payments, and the difference in MSRP between the two cars isn't nearly high enough for that to be the case.

Leasing isn't some weird marketing gimmick. The way leases are priced, the cost of leasing for a three year term should be identical to the net cost of owning the same car for three years and then selling it at market value. Owning becomes cheaper than leasing only if you keep the car for an extended period after you've paid it off. [/quote]

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