I bought a 40k car this year. Our income varies but I would say is about $250k in an avg year. I have NEVER owned any kind of luxury car before so it was a big splurge.

I bought it for a few reasons: I have always leased cars in the past because I like getting a new car every three years. We realized that if we put a bunch of money down (like $15k), our payments would be about what the lease payments were and that after 3-4 years I could sell it and get my initial down payment back. So my monthly costs were not going up but I could drive a much nicer car.

Part of this also has to do with the fact that resale on a luxury car is MUCH better than on your run of the mill Toyota or Honda. A 5 year old Mercedes is still a Mercedes. A car is going to be a depreciating asset no matter how you swing it, but a luxury car will depreciate slower.

I am completely obsessed with my car now. I love driving it and everything about it!! The only thing I would say I don't like is that I know people see it and make assumptions about my family and our lifestyle. So the show off part was actually a detraction, not an attraction.

Anonymous wrote:

Anonymous wrote:If you supposedly can't afford 40k on your income, I am wondering who drives all those expensive cars?

This thread, like so many others (making 500k while living paycheck to paycheck and wearing hand me downs) is just so much BS. People are like counting every penny while getting ready to spend 5 million dollars in tuition for some worthless degree 15 years down the road.

We make 150k and will be buying BMW X5 when our old car dies. We can buy it for cash several times over but we would never do it, certainly not with these interest rates. Our old car is 10 yo audi A4, which cost maybe 35k when we bought it. At the time we made like 90k or something, though we lived in a much cheaper area. We have no debt. I find this whole forum crazy.

you are the one pissing tens of thousands away on a depreciating asset for no reason, and we are crazy? hey, if I was single I'd have a nice car. Might help get me girls, who knows? but I'm not trying to impress my 8 year old ...

no reason? the reason is i want to live a good life. driving nice cars is a part of that. what, i am supposed to save every penny? why? because he who saves most money wins or something? no, thanks.

Anonymous wrote:If you supposedly can't afford 40k on your income, I am wondering who drives all those expensive cars?

This thread, like so many others (making 500k while living paycheck to paycheck and wearing hand me downs) is just so much BS. People are like counting every penny while getting ready to spend 5 million dollars in tuition for some worthless degree 15 years down the road.

We make 150k and will be buying BMW X5 when our old car dies. We can buy it for cash several times over but we would never do it, certainly not with these interest rates. Our old car is 10 yo audi A4, which cost maybe 35k when we bought it. At the time we made like 90k or something, though we lived in a much cheaper area. We have no debt. I find this whole forum crazy.

you are the one pissing tens of thousands away on a depreciating asset for no reason, and we are crazy? hey, if I was single I'd have a nice car. Might help get me girls, who knows? but I'm not trying to impress my 8 year old ...

If you supposedly can't afford 40k on your income, I am wondering who drives all those expensive cars?

This thread, like so many others (making 500k while living paycheck to paycheck and wearing hand me downs) is just so much BS. People are like counting every penny while getting ready to spend 5 million dollars in tuition for some worthless degree 15 years down the road.

We make 150k and will be buying BMW X5 when our old car dies. We can buy it for cash several times over but we would never do it, certainly not with these interest rates. Our old car is 10 yo audi A4, which cost maybe 35k when we bought it. At the time we made like 90k or something, though we lived in a much cheaper area. We have no debt. I find this whole forum crazy.

Funny, I have a similar dilemma. I have an 11-year old Mazda Protege5 and $35K in cash (after emergency fund, college savings, 401K etc) to spend on a car. I thought I'd buy Lexus CT - efficient and reliable hatchback with a little bit of a status. And then I saw Mazda3 hatchback and totally fell in love. The design, the sporty handling, the stick! And it's half the price of Lexus. Or... is the price really a positive? That's my dilemma. Should I buy the more expensive car for status (I'm pushing forty and we do have a 200+ HHI) or stick with the car I love and have some money left over? I never even thought I would be in this position, but here it goes - status is an important factor in buying a car, even for people like myself who have long managed to disregard it.

depends, obviously. some used cars are going to be expensive. transmission, brakes, belts. Could be thousands of dollars a year in repairs.

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:I would never buy a $40K car. You can get a great car for half that.

I wouldn't either but then I only want to impress myself. My last vehicle I bought for cash. Paid off beats any brand or status.

+1!

+1. People should ONLY buy cars in cash. If you can't afford it, you can't afford a new car.

Even when the dealerships are offering 0% financing? Couldn't you earn a higher return on your lump sum cash by investing it over 5 years and paying off the 0% interest loan slowly over those years instead?

Well, that and the fact that some people need to drive to work and the cost of a monthly car payment is the cheapest way to get to work. Cheaper than taking a cab or hiring a zipcar every time you need wheels. But let's just ignore the realities of most people and pretend every person worth the space they take up has at least 20k in cash lying around.

How about NOT buying a new car if you can't afford it. I love how people don't even consider that anymore. You can't get to work with a used $5k car?

I would need the kids through college and $5 million net worth.

this is OP. If I did want the status, and I might, I'd still get a 2-3 year old car coming off a lease. Something like a 2012 BMW 5 series. No chance I'd ever buy new.

Anonymous wrote:Our HHI is probably in the $400Ks, but until I catch up on college savings, put a bit more away in other savings and as long as my old cars still run, just cannot see it. It would save me a good deal in gas if I bought a car with 30+mpg though ...

You sound very prudent. Cautious. Like ...a Subaru driver.

32 mpg, sub $25K, leather, nice interior, great drive, safe, all wheel drive... Subaru legacy
They have other models too above 30 mpg including new hybrids.

I've had two Subarus totaled and never had a scratch....totally loyal, as are most Subaru owners. Great cars.
Also loved the Hyundai we test drove. New Fords are great too....there's so much more out there that's excellent around $28K or $30K ...you really don't need to drop $40K unless you want the status.

We make $160k and just bought our first new car in 9 years -- a $28k Honda CRV. I don't think I'd buy a $40k car until I'm my kids are all out of college (so that's another 8 years from now). At that point, I might splurge on a small BMW or something. We'll see.

I am driving a 13 year old 12,000 car. I will replace it when it becomes unreliable but that hasn't happened yet. For myself, I can't see needing a 40K car but if I had the cash and wanted it, I would buy it. I would not if I had to finance it...as then is becomes much more than a 40K car.

Fine on your income depending on your expenses. A lot of decent not fancy brand SUV's are that much. We keep our cars for as long as we can so I'd rather buy new and buy something a little better at this stage. I will pay extra for the safety features and back up camera/sensors but I would not put a DVD player in it as we have iPads.

I financed my car, but only because I got a great deal. I had the $27K available in savings, though. I would never buy a car if I didn't have that amount in savings. What if you have some sort of emergency?

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:I would never buy a $40K car. You can get a great car for half that.

I wouldn't either but then I only want to impress myself. My last vehicle I bought for cash. Paid off beats any brand or status.

+1!

+1. People should ONLY buy cars in cash. If you can't afford it, you can't afford a new car.

Even when the dealerships are offering 0% financing? Couldn't you earn a higher return on your lump sum cash by investing it over 5 years and paying off the 0% interest loan slowly over those years instead?

Well, that and the fact that some people need to drive to work and the cost of a monthly car payment is the cheapest way to get to work. Cheaper than taking a cab or hiring a zipcar every time you need wheels. But let's just ignore the realities of most people and pretend every person worth the space they take up has at least 20k in cash lying around.