Buying a luxury car (how dumb would it be to do this?)

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michaeljc70
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Re: Buying a luxury car (how dumb would it be to do this?)

Post by michaeljc70 »

Of course you can afford it.

When I bought a new car (after having same car for 13 years), I just could not bring myself to spend 50% more for a luxury version of (mostly) the same thing. But people have different priorities.
rocketrex
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Re: Buying a luxury car (how dumb would it be to do this?)

Post by rocketrex »

corn18 wrote:How about a 2 year old Highlander and then buy a fun car to go with it. We were trying to decide between an X5, Cayan, Q7, Range Rover Sport to replace my wife's MDX. They were nice and all and kindof fun to drive, but still a 2.5 ton behemoth. We ended up keeping the MDX for hauler duty and added a lightly used but amply depreciated Z4 to the stable. Unless my wife is hauling kids or a lot of stuff, the Z4 is her goto car now. And I get to have some fun, too!

Image
This is about exactly what we did. We bought a higher mileage 2015 Highlander for my wife to use to haul kids and I bought a fun 2015 Audi SQ5. We are very happy with our decisions. If anything, I would suggest splurging for the X5M if you are going to do it! I'm a driving enthusiast so it is well worth it to me to pay the extra to get the power/fun.

So my only suggestion if going luxury, buy one that is 1-2 years old to remove the big depreciation hit.
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tomservo14
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Re: Buying a luxury car (how dumb would it be to do this?)

Post by tomservo14 »

Wow, I didn't expect all these responses! Thanks, folks.

A lot of people are pointing out that we need to save more for college. As someone who teaches kids at an expensive, private university, I'm acutely aware of this issue. We've run the numbers extensively. Our oldest is 10 years away from college (and our employer pays half of the tuition). We've calculated our savings rate based on sending our kids to our state flagship public school. If they choose a mid tier private school or liberal arts college, we can pay out of savings and out of our income at the time. If they all go to Harvard, we're screwed.

Lots of folks are pointing out that the X5 won't fit my entire family. Our other vehicle is a minivan, so that's less of an issue. I'd prefer a sports car (3 series) over the SUV, but it's kind of a compromise choice because even if one of us is taking 2-3 kids somewhere, they tend to have lots of sports stuff/gear and a sports car might not work. Lots to think about. What we may do is hold off on the fancy car fantasy for a few more years until we have more savings under our belt AND get the vehicle we really want. Hopefully, I won't be the old dude driving the uncomfortable sports car.
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tomservo14
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Re: Buying a luxury car (how dumb would it be to do this?)

Post by tomservo14 »

TareNeko wrote:
tomservo14 wrote: I’d prefer a 3 series, but I have kids with lots of stuff.
You have options:
3 series wagon, or if that's small, 5 series wagon. If you still need space, roof box.

Edit: You have 4-kids... never mind my wagon suggestion. You should get a van probably.
I've already got a minivan, so this'll be a second vehicle. My dealership has a brown, diesel 3 series wagon that I've been drooling over, but I can't get my wife to go for it :(
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Watty
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Re: Buying a luxury car (how dumb would it be to do this?)

Post by Watty »

tomservo14 wrote:I enjoy cars, and used to spend my high school days working on my friends' camaro, and trying to keep my old hoopty running.
I am not a "car guy" but my impression is that there are two extremes in types of "car guys". Ones that like driving them and one that like tinkering on them.

I would suspect that you may be more of a tinkerer and if you buy a new car you may not be scratching that itch.

One alternative would be to get the Highlander for driving but also get a project car that you could tinker with and also get your kids involved with tinkering on the car. When they get to the age when they are driving then you could gets cars for you to fix up with them for them to drive.

As kids get to be teenagers it gets harder to find things to do together with them and projects like that can be a good way to spend time with older kids. If you have girls then working on cars with them would be an especially good thing for them to help build their confidence that they can do anything they want.
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Crimsontide
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Re: Buying a luxury car (how dumb would it be to do this?)

Post by Crimsontide »

tomservo14 wrote:
TareNeko wrote:
tomservo14 wrote: I’d prefer a 3 series, but I have kids with lots of stuff.
You have options:
3 series wagon, or if that's small, 5 series wagon. If you still need space, roof box.

Edit: You have 4-kids... never mind my wagon suggestion. You should get a van probably.
I've already got a minivan, so this'll be a second vehicle. My dealership has a brown, diesel 3 series wagon that I've been drooling over, but I can't get my wife to go for it :(
Wives, nature's counterweights :happy I can't count the number of times my wife has kept me from doing something dumb like this :oops:
NewbieBogle007
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Re: Buying a luxury car (how dumb would it be to do this?)

Post by NewbieBogle007 »

One thing I've realized over the years is that the nicer your car is, the more stress and discontent you leave yourself open to (the first door ding, rock chip, vandalism, etc). This, and of course you have the higher cost of repairs, insurance, and maintenance. For me, it's not really worth it to go beyond a loaded Accord or Civic.
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Alexa9
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Re: Buying a luxury car (how dumb would it be to do this?)

Post by Alexa9 »

I would lease it. Think of it as a 3 year test drive. Buy it at the end if you love it. If you crash it or it's a lemon, it's not your problem. If you are wealthy and like cars, leasing is not a bad route.
Leemiller
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Re: Buying a luxury car (how dumb would it be to do this?)

Post by Leemiller »

With four kids and where you are in savings, my vote is no. 3k a year per child is low unless you're only planning to cover community college and state schools. I think the four kids might be your luxury item given childcare and college costs.

Dave Ramsey has a rule that you should have a million dollar net worth before you take the depreciation hit on a new car. I don't disagree with him.
tigermilk
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Re: Buying a luxury car (how dumb would it be to do this?)

Post by tigermilk »

Have a '98 M3 that's a blast to drive, but I will never buy another BMW. You have the money, but skip the brand. I was not impressed with the quality of workmanship.
KevinIA
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Re: Buying a luxury car (how dumb would it be to do this?)

Post by KevinIA »

A BMW X5 is a wonderful car, but since you are used to driving a Toyota make sure you factor in the $300 oil changes, $1500 sets of tires that last 20k miles, and any out of warranty work even with an independent shop will be expensive. I have owned BMW's for the last 20 years and they are a blast to drive, but incredibly high maintenance vehicles. When a bushing starts to wear out on you Toyota it still drives fine, that won't be the case with the x5 (You'll get 50-60k before you need a suspension rebuild). I drove a m3 daily (15k miles per year) for about 10 years and spent a small fortune keeping it running and on the road even with doing all the work myself. I do have a "weekend" m3 still that we drive about 2k miles per year that doesn't cost a lot to keep it going, so as a second low mileage car the x5 might be practical. IMHO a Lexus would be a little more luxurious and sporty than your Toyota, but avoid a lot of the maintenance costs of the BMW. The wife and I both drive Lexus's now and for a driver we won't drive anything else going forward.
mhalley
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Re: Buying a luxury car (how dumb would it be to do this?)

Post by mhalley »

Thought about this post when I came accross this article today. Just remember, those beemers are addicting.
http://jalopnik.com/the-bmw-addiction-t ... 1794882542
cantos
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Re: Buying a luxury car (how dumb would it be to do this?)

Post by cantos »

tomservo14 wrote: A lot of people are pointing out that we need to save more for college. As someone who teaches kids at an expensive, private university, I'm acutely aware of this issue. We've run the numbers extensively. Our oldest is 10 years away from college (and our employer pays half of the tuition). We've calculated our savings rate based on sending our kids to our state flagship public school. If they choose a mid tier private school or liberal arts college, we can pay out of savings and out of our income at the time. If they all go to Harvard, we're screwed.

I'd prefer a sports car (3 series) over the SUV, but it's kind of a compromise choice ... Hopefully, I won't be the old dude driving the uncomfortable sports car.
Hate to break it to you, you already are the old dude, and when you get the sports car, you'll be the old dude driving the uncomfortable sports car. But that's ok.

Given that you and your wife are professors at obviously a great university, genetics & environment would indicate your kids will have the smarts to go to amazing universities. So I'd plan for the Harvards instead of the state schools.

Put me in the camp that says a new BMW of any kind is out of your range. Get a 3+ year old BMW. Keep in mind maintenance costs will be about $1k a year (I owned a BMW 3-series for many years, and was extremely happy to finally get rid of the fragile, costly, import sports car in favour of my very nice Ford. The control arms are soooo weak.) So even the older BMW is on the edge of your range. I echo the above sentiments about scratches etc. I definitely had scratches on my car from other people who didn't like it for whatever reason and keyed it.

Finally - and, to me, this is even more important - don't get a compromise X5, which is ugly to boot. "drives like a car" is nowhere near "driving like a BMW sedan/coupe". You already have the Odyssey for the kids. Get a BMW 330, 2-series coupe, or 1-series w a big engine. Any of the coupes/sedans can fit 2 kids in the back and equipment in the trunk. YOLOOOOOO. lol.
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sunny_socal
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Re: Buying a luxury car (how dumb would it be to do this?)

Post by sunny_socal »

I've learned to take opinions with grain of salt when it comes to things like this. Some people will say "Go get that car and enjoy it", others will say "You're too poor, don't do it." What's the right answer? Maybe get a CPO BMW just so you can scratch the itch but not lose so much $$ on depreciation.

I owned a BMW once upon a time and it was the best driving care I've had but also the least reliable. :?
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BL
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Re: Buying a luxury car (how dumb would it be to do this?)

Post by BL »

What does your spouse say?

Also, are you setting aside equivalent amounts for a spousal luxury?
bantam222
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Re: Buying a luxury car (how dumb would it be to do this?)

Post by bantam222 »

I feel you have the disposable income to justify this. The question only you will be able to answer is, will this car give you more enjoyment than other options of spending the money? Trip to Hawaii with the family a few times? Is that better than the car?
daveydoo
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Re: Buying a luxury car (how dumb would it be to do this?)

Post by daveydoo »

tomservo14 wrote:I’ve always dreamed of having a fun car, and in particular, a BMW.
I don't think this is it. You can spend a lot and you will have a nice and luxurious car with high cost of upkeep as others have pointed out. You will not have a "fun" car. Unless fun = pride of ownership. I have not driven the X5 but did some homework on it not too long ago. The reviews have pretty uniformly described it as not being very "driver-oriented," especially for the price. Test drives -- especially if you don't do a lot of them -- are hard; you can't "push" an unfamiliar car -- let alone a $60K one owned by someone else. For perspective, I drive a 3-series (335d -- it's a blast) and it pre-dates the crappy electric steering that started in 2012. That's a "fun" car. You can swallow your pride and get a Mazda CX-5 like we just did -- that's a fun car, reasonably-priced, and reliable, too. The RAV4 and Highlanders are not fun cars. If you didn't specifically mention "fun," I would not have responded. :happy
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rfowler
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Re: Buying a luxury car (how dumb would it be to do this?)

Post by rfowler »

I recommend you buy two Certified pre-owned vehicles.

We are on our second HIghlander and second Mercedes E-series---both purchased as 2-yr old Certified Pre-Owned cars (lease returns), as were the previous ones.
Our family has always enjoyed owning the practical family hauler AND the fun/luxury vehicle.
And it's more satisfying to have someone else take the big depreciation hit (typically the first two years) especially for the luxury car.
It's pretty shocking when you see that a $65K new Mercedes can be had for $36K (what we paid) as a lease-return with only 24K miles. We priced BMWs at the time and it was similar dip though not as sharp.
The Highlander has held it's value a bit better.

I lust after new cars, but know the romance is short-lived.....However, the love of a lease-return luxury car is enduring.
:happy :moneybag
msk
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Re: Buying a luxury car (how dumb would it be to do this?)

Post by msk »

You can afford any car that you are ready and willing to pay cash for. The kids these days have a new term, YOLO, you only live once. Very apt. Apart from my very first car in my 20s I have paid cash for all my Jaguar, Mercedes, BMW, Porsche, Lexus (ranked in my experience with cost of ownership of the high-end models that I owned, high cost to low). Apart from the Jaguar, all the rest can be kept for 10+ years with very little hassle. By this time next year you would have forgotten how much financial sacrifice you made for the BMW. After 5 years do expect to pay a couple of thousand+ $ a year for maintenance, tires, brakes, etc. It's normal.
HopeToGolf
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Re: Buying a luxury car (how dumb would it be to do this?)

Post by HopeToGolf »

Tomservo14

Are you and your wife contributing to pensions?

Given your financial situation, savings rate and, more importantly, your desire to work to a normal retirement age, buy the car.

You can easily afford it. That said, an X5 does not seem like the vehicle that will scratch your itch. Only you know how much utility you need when the minivan is unavailable. A sport sedan (M3?) can handle 2 maybe 3 kids and their stuff (unless they all play hockey).

Your college savings seems a little light (even knowing the kids can get 50% tuition). Plan to use part of your non-taxable on that.

Enjoy the car. You can afford it but do not doubt that you are scaling up your lifestyle. Underfunded college tuition, 600K house, BMW in the driveway....yes...you are that guy now. You are banking on job security and longevity.
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gilgamesh
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Re: Buying a luxury car (how dumb would it be to do this?)

Post by gilgamesh »

tomservo14 wrote:
TareNeko wrote:
tomservo14 wrote: I’d prefer a 3 series, but I have kids with lots of stuff.
You have options:
3 series wagon, or if that's small, 5 series wagon. If you still need space, roof box.

Edit: You have 4-kids... never mind my wagon suggestion. You should get a van probably.
I've already got a minivan, so this'll be a second vehicle. My dealership has a brown, diesel 3 series wagon that I've been drooling over, but I can't get my wife to go for it :(
I recommended you getting the 3 series, with this new information provided I change my vote. Listen to your wife, this has to be a mutual decision.

Edit: I'm the husband, so no bias there lol....My wife and I both agreed 14 years ago that I should get my Porsche 911, and we are both very happy about it to the day. She doesn't drive it, actually doesn't even like to be the passenger in it...it's not her cup of tea. If she didn't agree, I wouldn't have gotten it. BTW, owning it and driving it is much more pleasurable than dreaming about buying it...I've dreamt of it since teenager. Day 1 was slightly more pleasurable than the rest, day 2 is similar to today....so the fun never stopped.
junior
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Re: Buying a luxury car (how dumb would it be to do this?)

Post by junior »

BL wrote:What does your spouse say?

Also, are you setting aside equivalent amounts for a spousal luxury?
+1. Spouse's opinion is much more important than that of strangers online. In a sense the opinions of people here is not relevant.
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CyclingDuo
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Re: Buying a luxury car (how dumb would it be to do this?)

Post by CyclingDuo »

tomservo14 wrote:I’m a long time lurker on this forum, and I finally signed up to post a question about buying a car. Apologies, I know there are a lot of these threads, and I’ve probably read every single one. Basically, I’m considering buying a new BMW X5 ($55-65K). This would be to replace a 13 year old toyota rav4. I enjoy cars, and used to spend my high school days working on my friends' camaro, and trying to keep my old hoopty running. I’ve always dreamed of having a fun car, and in particular, a BMW. I’d prefer a 3 series, but I have kids with lots of stuff. The problem is it feels a little ridiculous spending this much money on a car, so I go back and forth on how dumb this is (i.e. you only live once vs save as much as possible). Up until now, we’ve gone the honda/toyota route and keep them for 10-15 years (our other vehicle is an Odyssey). I’m 44, the wife is 42 and we have 4 kids. I’m coming here for advice. Can I afford it? My financials:

household income: ~$300K
mortgage: $620K (we have ~$210K in equity)
Debt: none

Savings
401k: ~$500K
liquid: ~$97K when we’d buy the car this summer
529s: ~$100K (our employer will pay half of the tuition for each of our kids’ college, independent of where they go)

Other relevant info:
Each year we put about $48K in retirement, $50K in non-retirement savings, and $12K in college savings each year. We’d buy the car cash, so the savings rate would be unaffected. We’re both tenured college professors, so we’ve got good job security. We started these jobs 2 year ago, and our pay increased substantially (in case you’re wondering why we don’t have more in savings). I love my job and hope to do it until I keel over, so no early retirement plans. I’m not particularly worried about lifestyle creep: we have the same furniture we had in grad school and we’re not really into luxury stuff (other than this!). Most of our costs go to daycare and kid stuff. If we don’t get the X5, we’d likely get a toyota highlander.
Personally, we'd say avoid the expensive car. Rent one for a few weekends/trips to get it out of your system. At your ages, you need to continue accumulating as much wealth as you can. A lot will happen in the future - and you'll need the cash/investments.

What do the rich really drive?

https://www.daveramsey.com/blog/cars-we ... ople-drive
"Save like a pessimist, invest like an optimist." - Morgan Housel
Mr.BB
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Re: Buying a luxury car (how dumb would it be to do this?)

Post by Mr.BB »

Don't think of the spending cost as 55,000 to $65,000 for the car.
The real cost difference is what you would have spent for the other car versus the one you really want. So it may be a $30,000 difference that you're really conteplating (not counting insurance and maintenance costs).
"We are what we repeatedly do. Excellence, then, is not an act, but a habit."
spitty
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Re: Buying a luxury car (how dumb would it be to do this?)

Post by spitty »

Here's the best site with everything BMW: http://www.bimmerfest.com/forums/ If buying new, I'd pickup at the factory in SC and drive home; you can use any salesman (client advisor) and do the entire transaction online. Look for a popular "board sponsor" on Bimmerfest to do the deal; I remember "Adrian" from Atlanta was popular, but there are many. If going with a 3-series consider pickup in Munich--cost is actually cheaper than stateside and includes 1 month insurance. I did this in 2012 and it was a fantastic experience. I've never leased but there is tons of info on the forums about it. Might be a consideration since ownership after the 4 year warranty can get expensive.
chuckieboy
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Re: Buying a luxury car (how dumb would it be to do this?)

Post by chuckieboy »

I was in the same situation some time ago and decided to pull the trigger. We are on our 5th German car (2 BMW's, 1 Mercedes, 1 Porsche, 1 Audi).

They depreciate like crazy, cost a fortune to maintain, and have terrible resale once past 100K miles. BUT, I would do it all over again. A nice car is something you use every day, and I still get a smile on my face every time I get into my car. Nothing beats a German car for pure driving bliss and life is way too short.
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sunny_socal
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Re: Buying a luxury car (how dumb would it be to do this?)

Post by sunny_socal »

Mr.BB wrote:Don't think of the spending cost as 55,000 to $65,000 for the car.
The real cost difference is what you would have spent for the other car versus the one you really want. So it may be a $30,000 difference that you're really conteplating (not counting insurance and maintenance costs).
This. A fully loaded Honda Pilot, Toyota 4Runner or Toyota Highlander lists for close to 50k these days.

Divide that difference (plus expected maintenance) over the time you hope to own it. Could be only 1-2k per year extra.
jodydavis
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Re: Buying a luxury car (how dumb would it be to do this?)

Post by jodydavis »

tomservo14 wrote:A lot of people are pointing out that we need to save more for college. As someone who teaches kids at an expensive, private university, I'm acutely aware of this issue. We've run the numbers extensively. Our oldest is 10 years away from college (and our employer pays half of the tuition). We've calculated our savings rate based on sending our kids to our state flagship public school. If they choose a mid tier private school or liberal arts college, we can pay out of savings and out of our income at the time. If they all go to Harvard, we're screwed.


The lack of college savings did raise a potential red flag, as others have pointed out, given that you have four kids. That's a huge future expense, even with your university generously covering 50%. Just make sure that you are truly comfortable with the four children going to the state flagship. State schools can be a terrific fit. But also consider the possibility that one or more of your kids may, when the time comes, want to go to a far more expensive private college. Are you comfortable saying "no"? As someone with a kid about to start the whole college application process, I can say that things often look far simpler when they are young.

I also highlighted the text above to point out that, as you know, mid-tier private or liberal arts colleges can be every bit as expensive as Harvard. Given that, it's hard to see how you can foot the bill for one or more to go to a mid-tier private or liberal arts college, without significantly impacting your retirement savings, given your existing college savings rate.
Fox
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Re: Buying a luxury car (how dumb would it be to do this?)

Post by Fox »

I would not enjoy the new luxury ride getting scuffed, scraped and stained by kids, their friends and sports equipment.

I'm waiting until my kids are in middle/high school (10 years from now) to get a nicer car!
TBillT
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Re: Buying a luxury car (how dumb would it be to do this?)

Post by TBillT »

I'd ask what state you live in, because in Va. we tax the heck out of cars annually.
But most states not so bad.
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BolderBoy
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Re: Buying a luxury car (how dumb would it be to do this?)

Post by BolderBoy »

AZAttorney11 wrote:The X5 wouldn't be my choice, but you didn't ask that, did you? :)

Yes, you can afford the SUV. Buy it and enjoy life. The time to drive a POS is when you are young and broke. You're neither of those things.
My sentiments, exactly. (and drive it for a LONG time)
"Never underestimate one's capacity to overestimate one's abilities" - The Dunning-Kruger Effect
ncbill
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Re: Buying a luxury car (how dumb would it be to do this?)

Post by ncbill »

tomservo14 wrote:Wow, I didn't expect all these responses! Thanks, folks.

A lot of people are pointing out that we need to save more for college. As someone who teaches kids at an expensive, private university, I'm acutely aware of this issue. We've run the numbers extensively. Our oldest is 10 years away from college (and our employer pays half of the tuition). We've calculated our savings rate based on sending our kids to our state flagship public school. If they choose a mid tier private school or liberal arts college, we can pay out of savings and out of our income at the time. If they all go to Harvard, we're screwed.

Lots of folks are pointing out that the X5 won't fit my entire family. Our other vehicle is a minivan, so that's less of an issue. I'd prefer a sports car (3 series) over the SUV, but it's kind of a compromise choice because even if one of us is taking 2-3 kids somewhere, they tend to have lots of sports stuff/gear and a sports car might not work. Lots to think about. What we may do is hold off on the fancy car fantasy for a few more years until we have more savings under our belt AND get the vehicle we really want. Hopefully, I won't be the old dude driving the uncomfortable sports car.
Lease it. LEASE LEASE LEASE LEASE LEASE.

As others have said you get a 3 year test drive, which allows you to learn its quirks/problems while it's still under warranty.

You preserve your liquid savings.

Your cash flow is more than adequate to pay the monthly cost (lease payment + taxes + increase in insurance)

Start here: http://forum.leasehackr.com & read/ask about the specific model(s) you're considering.
dpusa
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Re: Buying a luxury car (how dumb would it be to do this?)

Post by dpusa »

Ok; so for it is worth I have driven used cars and nearly new cars for all of my life. My first car was a 1.0l Nissan in baby blue :D and my previous car was a Nissan SUV which I drove for ten years with NO additional options (also it was the base model). We keep our cars for at least ten years.

However; as we got our lives in order; my focus was always pay off the mortgage (done); have 9-12 months emergency fund (done); save for retirement (on track); save for college (on track). In the last two years we have bought a brand new Porsche (now paid off) and just bought a brand new BMW X5 (paid cash). Agree with many here; they depreciate like crazy; cost an arm to maintain BUT i love getting into it every day and just driving. My DW and I dont have many vices outside of travel to enrich ourselves and kids; so this is one of them; albeit every ten years. I would do it...
Admiral
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Re: Buying a luxury car (how dumb would it be to do this?)

Post by Admiral »

tomservo14,

Take it from someone who has owned BMWs for 20 years: they are expensive to maintain out of warranty. X5s have traditionally not had good reliability but may be better now. Also, they eat gas, if you care.

That said, here's the advice I always give when people post about new car purchases and "whether or not I can afford it."

Unless there is a rush, calculate your car payment. Then, take that $600-$800/mo (this being an X5, and by the way fully optioned you're looking at near 70 large with tax) and start funneling it to a savings account on the first or last of the month. Do that for six-nine months and see how you feel, and see what it does to your cash flow. If you are ok with it, then buy the car. You can always sell it.

I would, however, highly recommend a CPO X5 and not a brand new one. The warranty is still in place and you'll save plenty getting one that's coming off lease.
Mr.BB
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Re: Buying a luxury car (how dumb would it be to do this?)

Post by Mr.BB »

sunny_socal wrote:
Mr.BB wrote:Don't think of the spending cost as 55,000 to $65,000 for the car.
The real cost difference is what you would have spent for the other car versus the one you really want. So it may be a $30,000 difference that you're really conteplating (not counting insurance and maintenance costs).
This. A fully loaded Honda Pilot, Toyota 4Runner or Toyota Highlander lists for close to 50k these days.

Divide that difference (plus expected maintenance) over the time you hope to own it. Could be only 1-2k per year extra.


That much for a 4 Runner or a Pilot? Then why are we having this discussion....get the BMW!
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sunny_socal
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Re: Buying a luxury car (how dumb would it be to do this?)

Post by sunny_socal »

Mr.BB wrote:
That much for a 4 Runner or a Pilot? Then why are we having this discussion....get the BMW!
And the Jeep Grand Cherokee SRT starts @ 66k:
https://www.jeep.com/grand-cherokee-srt.html

We looked at one JGC that was 80k! :shock: (did not buy but wifey liked it)
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Re: Buying a luxury car (how dumb would it be to do this?)

Post by lazydavid »

Mr.BB wrote:That much for a 4 Runner or a Pilot? Then why are we having this discussion....get the BMW!
Yep, a fully-optioned (there aren't many) 4Runner Limited is $47,780 with no dealer/port installed accessories. Highlander Limited Platinum is $47,220 for gas, $48,840 for Hybrid. Pilot Elite is $48,010 without the optional (and ugly) $2,000 wheels.

The BMW will cost more to purchase and in operating costs, but will also be a far more engaging drive. And if the OP does any of his/her own maintenance, the engine is mounted in the correct direction (longitudinally), so a lot of common maintenance items are far easier.

I'd also encourage the OP to look at the Audi Q7. Quite a bit roomier and more comfortable than the X5, and the best rated mid/large size luxury SUV by a host of sources. Plus Audi has held the top spot on CR's reliability rankings for the past two years. I'm very much a BMW guy myself (driven only 3 series for the past 17 years), but we're getting pretty close to pulling the trigger on either a Q7 or SQ5 to replace my wife's Lexus RX. She had her heart set on the X5 because of my great experience with the brand, but none of us fit comfortably in the 2nd row, and the 3rd row is a crime against humanity. The 3rd row in the Q7 is actually tolerable for average-sized adults (which does not describe us).
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tomservo14
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Re: Buying a luxury car (how dumb would it be to do this?)

Post by tomservo14 »

lazydavid wrote:
Mr.BB wrote:That much for a 4 Runner or a Pilot? Then why are we having this discussion....get the BMW!
Yep, a fully-optioned (there aren't many) 4Runner Limited is $47,780 with no dealer/port installed accessories. Highlander Limited Platinum is $47,220 for gas, $48,840 for Hybrid. Pilot Elite is $48,010 without the optional (and ugly) $2,000 wheels.

The BMW will cost more to purchase and in operating costs, but will also be a far more engaging drive. And if the OP does any of his/her own maintenance, the engine is mounted in the correct direction (longitudinally), so a lot of common maintenance items are far easier.

I'd also encourage the OP to look at the Audi Q7. Quite a bit roomier and more comfortable than the X5, and the best rated mid/large size luxury SUV by a host of sources. Plus Audi has held the top spot on CR's reliability rankings for the past two years. I'm very much a BMW guy myself (driven only 3 series for the past 17 years), but we're getting pretty close to pulling the trigger on either a Q7 or SQ5 to replace my wife's Lexus RX. She had her heart set on the X5 because of my great experience with the brand, but none of us fit comfortably in the 2nd row, and the 3rd row is a crime against humanity. The 3rd row in the Q7 is actually tolerable for average-sized adults (which does not describe us).
OP here. We are looking at the Q7 too for all the reasons you describe. I was kind of shocked when I saw CR's reliability rankings for them which is a big plus. The usable 3rd row is also nice. I haven't given it a test drive yet.
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Re: Buying a luxury car (how dumb would it be to do this?)

Post by LiterallyIronic »

afan wrote:
stoptothink wrote:Can you afford it? I doubt anybody is going to say no. Should you? I wouldn't, but I am one who views cars as appliances. This is a decision which isn't really about money (there is plenty).

OK, I will say "NO, you cannot afford it"

4 kids and $12,000 per year total into college savings?????
Have you priced a year in college?
$12,000/year PER KID would be more like it.

If you had the same income, were 10 years younger, had the same assets and had no kids- and no plans to have them- then it would still be a waste of money, but you could afford it. As reported in the first post- this is not even close- NO
Meh. Don't put kids' college expenses first. Put them last. If you can afford to throw a little money that way, great. If not, scholarships, loans, FAFSA, and part-time jobs will cover it. Don't sacrifice your own quality of life.

Also, $12,000 per year isn't enough? Over the 18 years a kid has to start college, that would be $216,000 (or $54,000 per kid). I just graduated university and it was ~$2,600 per semester. Over eight semesters is $20,800. Imagine if I had FAFSA or something to help!

OP, you're saving $100,000 a year and have half a million dollars saved for retirement. If you want a fancy car, buy one.
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Re: Buying a luxury car (how dumb would it be to do this?)

Post by tomservo14 »

jodydavis wrote:
tomservo14 wrote:A lot of people are pointing out that we need to save more for college. As someone who teaches kids at an expensive, private university, I'm acutely aware of this issue. We've run the numbers extensively. Our oldest is 10 years away from college (and our employer pays half of the tuition). We've calculated our savings rate based on sending our kids to our state flagship public school. If they choose a mid tier private school or liberal arts college, we can pay out of savings and out of our income at the time. If they all go to Harvard, we're screwed.


The lack of college savings did raise a potential red flag, as others have pointed out, given that you have four kids. That's a huge future expense, even with your university generously covering 50%. Just make sure that you are truly comfortable with the four children going to the state flagship. State schools can be a terrific fit. But also consider the possibility that one or more of your kids may, when the time comes, want to go to a far more expensive private college. Are you comfortable saying "no"? As someone with a kid about to start the whole college application process, I can say that things often look far simpler when they are young.

I also highlighted the text above to point out that, as you know, mid-tier private or liberal arts colleges can be every bit as expensive as Harvard. Given that, it's hard to see how you can foot the bill for one or more to go to a mid-tier private or liberal arts college, without significantly impacting your retirement savings, given your existing college savings rate.
I was kind of kidding about the Harvard thing. If they got in, we'd figure something out. In general, I'm curious how people figure out future college costs. I did some back of the envelope calculations. This year, 4 years at Harvard is an eye watering $300K (I'm sure that'll go up in the future though). With our tuition benefit, it'd be more like $200K.

Now, If I contribute $3K a year to my youngest kid's college fund and earned 3% interest, that'd be about $74,000 after 16 years, so I'd still have to come up with $126K total, or $31K a year. $31K a year is a lot of money, but that's not too far off from what we've been paying in daycare costs over the past few years. We would have a few years of kids overlapping in college, but we could theoretically cut back on some savings in those years. Of course all of this leaves out the ridiculous increase in the costs of college over the years.

In general, how do folks balance out saving for the future vs figuring out how much you can pay while the kid is actually in college? Maybe this is the subject for a different thread....
Last edited by tomservo14 on Thu May 04, 2017 3:44 pm, edited 1 time in total.
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Re: Buying a luxury car (how dumb would it be to do this?)

Post by livesoft »

tomservo14 wrote:In general, I'm curious how people figure out future college costs. I did some back of the envelope calculations.
[...]
In general, how do folks balance out saving for the future vs figuring out how much you can pay while the kid is actually in college? Maybe this is the subject for a different thread....
This is an easy calculation. Basically, universities cannot charge more than people can pay, but they try to charge right up to the limit of having families shift food money to university money. So the annual cost of college is equal to the limits of a dual-income family shifting all their 401(k)/403(b)/Roth IRA contributions to zero and sending them to the university instead. So for a pair of 50 year-olds in 2017, that's $24K + $24K + $6.5K + $6.5K = $61K a year. These numbers will go up. Any difference between this number and something published is either meaningless or covered by having the student work in high school, in college, and/or beyond.

Of course, most students pay much less than this. In Houston, for instance, one can live at home and go to the University of Houston for less than $10,000 a year.
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Re: Buying a luxury car (how dumb would it be to do this?)

Post by czr »

You deserve and can afford an upgrade. Buy a used 2-series or 3-series and keep the Rav4 and Odyssey. Show your wife what you'll be saving and she will be in. You're the one driving it anyway. If you're generous you could take the RAV4 and have her drive the bimmer once in a while but be careful spoiling her.
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Re: Buying a luxury car (how dumb would it be to do this?)

Post by anil686 »

I would go ahead and get would I would like in your position. Just from experience, I would look for a really good local mechanic that works on a BMW to help with maintenance and repairs. One thing I dislike about BMW is the maintenance "free" thing - they include routine maintenance but of course have rolled it into the price of the vehicle and let their dealerships have free reign to push non needed services at a high price on you. A really good independent and local mechanic may be able to help keep maintenance costs lower. JMO though...
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Re: Buying a luxury car (how dumb would it be to do this?)

Post by an_asker »

stoptothink wrote:Can you afford it? I doubt anybody is going to say no. Should you? I wouldn't, but I am one who views cars as appliances. This is a decision which isn't really about money (there is plenty).
+1!

It is a personal decision. Try this trick that I learned somewhere (I've suggested this on a different thread as well): take a "fair" coin, label one side "Buy luxury car" and the other "Don't buy luxury car" and flip it. See what the coin tells you to do.

Now wait!!

If you like the feeling you got, go ahead with what the coin tells you to do. If it causes you any queasiness, pick the option opposite of the coin's! :-)
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Re: Buying a luxury car (how dumb would it be to do this?)

Post by tractorguy »

Have you sat down and thought about why you like the X5? Very few luxury cars are bought because of their features. According to a couple of people I know in the business (Cadillac regional sales manager & Jaguar regional sales manager) they're promoted and bought as jewelry.

I've driven an X5 and it struck me as just another largish SUV. I like the style, there are lots of bells and whistles, but it isn't a particularly fun car to drive. I'm also a car guy and have to admit that I own two German luxury cars. However, each one has a particular mission and reason for being in our garage.

My car is a 2007 BMW 328. This was the entry level car in BMW's line up when I bought it. I bought a year old dealer demo CPO and only put 8000 miles on it a year. Because i'ts low mileage, its maintenance costs, although high per mile, are low per year. I get a smile on my face most times I drive it but my spouse hates it. She says its too rough on the roads & the steering is too heavy. I say I'm feeling the road. To each their own.

My spouse's car is now a Mercedes ML350. It replaced a 2008 Camry V6 XLE. This was also a dealer demo CPO. This is our highway car and the one we pull the camper with. We wanted a car that my spouse would be comfortable driving, that could pull a 5000 lb trailer, seat a minimum of 4, and be comfortable on the highway and on the potholed roads in Northern Illinois. All the trailer blogs said pick up truck for the trailer requirement. However, if we bought a pickup then we would be a 3 car family because my spouse wasn't going to use it as a daily driver & I wasn't going to give up the 328. We haven't tried the Mercedes pulling the trailer up any serious mountains yet, but pulling the trailer in the flats in the mid west, its been comfortable. Without the trailer, its the most comfortable highway car we've owned. We're putting 20-24000 miles a year on it. Maintenance is expensive but I'm expecting it to go 150K miles before I trade it. We'll see what it costs when it gets long in the tooth. I've already found oil changes to be ridiculous.

I bought my first luxury car (the BMW) when I was 62. At your stage of life, we were in minivans and mid size 4 door sedans. I scratched my car itch with an old Triumph sports car as a hobby car. It cost me next to nothing to buy and parts were cheap. It was my daily driver in the summer. In the winter, I stored it. The sedan was the backup car to drive when the weather was too bad for the Triumph, I needed to haul more stuff or people than would fit in the Triumph, or when the Triumph was broken.
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Re: Buying a luxury car (how dumb would it be to do this?)

Post by monkey_business »

afan wrote:To me a car is a tool for moving about. If it works safely and reliably, it makes no more sense to get a fancy one than to buy a hammer with a gold plated handle. Does it drive nails any better? No? Then don't waste money on it.
That's not really a fair analogy. The reason why some people like cars is not about where the cars get them, but how. If you think getting A to B in an old Kia is the same experience as getting A to B in a newer Lexus, then you obviously don't appreciate cars. Which is fine, but some people think differently. "Wasting" money is a very subjective term.
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Re: Buying a luxury car (how dumb would it be to do this?)

Post by bligh »

monkey_business wrote:
afan wrote:To me a car is a tool for moving about. If it works safely and reliably, it makes no more sense to get a fancy one than to buy a hammer with a gold plated handle. Does it drive nails any better? No? Then don't waste money on it.
That's not really a fair analogy. The reason why some people like cars is not about where the cars get them, but how. If you think getting A to B in an old Kia is the same experience as getting A to B in a newer Lexus, then you obviously don't appreciate cars. Which is fine, but someone people think differently. "Wasting" money is a very subjective term.
Some cars are downright FUN to drive.

Also, I used to drive a 12 year old Sentra back and forth on a 1 hour commute every day. Believe me the road noise and vibrations were literally physically tiring. I got rid of the car and it made a huge difference. I also got rid of the commute. :)
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Re: Buying a luxury car (how dumb would it be to do this?)

Post by lazydavid »

bligh wrote:Some cars are downright FUN to drive.
This is what has had me in the 3 series for almost two decades. They're a hoot to drive (or at least they used to be, I've heard bad things about the steering in the current F30 generation), and yet as practical as any small/mid-sized sedan. My practical side won't let me daily drive a Vette. :) However, my 335d, which cost me about $4k more than the sticker on a Camry XSE or Accord Touring (bought "new-ish", never titled with 9k miles), makes more torque than a Stingray, which makes me :mrgreen: every time I push the go-fast pedal, and still returns an average of 29mpg even with my heavy foot. Other than a voracious appetite for expensive rear tires :P maintenance costs have been minimal over 5 years and pushing 75k miles. Nearly perfect combination of practicality and fun--it's short one pedal from being truly perfect.

Not everyone is a car nut, and I don't begrudge anyone who wants a simple transportation appliance. But it's more than a little condescending when people describe other people's passions as "wasteful".
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Re: Buying a luxury car (how dumb would it be to do this?)

Post by gator15 »

I've owned a few luxury/sports cars including an Audi RS4 and a BMW M3. I bought both used with low mileage. I enjoyed both cars but sold them because of the maintenance expenses associated with them. Also there was a certain level of anxiety I had owning those cars. I was always afraid of dents, dings and scratches. It was a bit justified as someone literally rear ended my Audi while I was in the grocery store. I came back to find my bumper hanging off the vehicle. The person fled the scene and left me with the bill. Also, someone keyed another sports car I owned. I say all this with the thought that you should know what you are getting yourself into. Are you fine with potential dents, dings and scratches on a $65k car? Are you fine with scuffs and scratches to the interior of your expensive car? When I bought an SUV last year, I looked at the X5. I really wanted the vehicle but decided against it because I knew I would experience the same anxiety I had with my sports cars of the past. Instead I got a vehicle which was $30k cheaper and I now throw bikes and snowboards in the back without worrying about scratches and scuffs. I think you can afford the vehicle and should get it to scratch that itch. Just know what you are getting yourself into.
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Re: Buying a luxury car (how dumb would it be to do this?)

Post by bloom2708 »

My takeaways come down to, is buying the X5 "Family Truckster" going to meet the "cool, fun, car" criteria. I don't think so.

I look at my local Craigslist. How could these BMW cars sell for $9,500? ~60k miles.

https://fargo.craigslist.org/cto/6115854163.html

https://fargo.craigslist.org/cto/6074194552.html

I realize they are from 03, 04, but could the owners not even limp them to $100k miles? The 745 was north of $70k when new.

I know people in Fargo have to drive 3.5 hours to Minneapolis to service their cars. Very interesting thread.

https://fargo.craigslist.org/cto/6088867389.html

Here is another "fun" car. This price point might be worth a "flier" $6,750 for some summer fun.
Last edited by bloom2708 on Thu May 04, 2017 5:29 pm, edited 1 time in total.
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