No Lambo for Get-Rich-Slow Folks?

[Rawr]

My fiancee owns a BMW Z4 convertible, and neither of us want to drive "that little car"...

I'll drive it for you. Let me put it this way - because of some a**hole last week, I have snow INSIDE my car right now.

 

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[Andrew]

Check out the true cost of ownership calculator at Edmunds -- http://www.edmunds.com/apps/cto/CTOintroController (I might have posted this before, not sure.)

There is a curve here, in some cases one year newer can be cheaper. Also factor in the things that don't come with a fixed dollar amount such as reliability & safety. I liked MJ's suggestion of 1/20th of your liquid capital.

My general view has been 1 month of income (or savings) tops, but figure it out for yourself. If you enjoy cars and want to splurge then tie it into an aggressive financial goal.

 

[Antonio.]

At what point are you so rich that you should (not can) buy a six-figure car?

We all know that slow-lane millionaires don't drive Lambos, but should fast-laners? Not just cars, but any extravagance or luxury. It seems like a measure of frugality will protect our wealth when all our wells have dried up. Aren't there better places to use that capital?

I'm not insulting the people who own Lamborghinis. I'd practically slit throats to have one or two, but I'm genuinely interested in discovering the threshold at which I should say, "There's no better way to use this money."
:fastlane:

I would have to disagree with you in this instance. I would say slow-lane millions do drive Lamborghini it just depends what model you are talking about. 2004 Lamborghini Gallardo's can be had at a dirt cheap price in the between-115-130 with X amount of miles on them. Actually they have financing in place with a particular company that can allow slow-lane million to drive Lamborghini even the Murcielago's all they have to do is come with 2 years worth of payments up front and boom they are in one with the lowest possible payment. The bottom line is that people with pay and X amount of dollars to drive a car to look like they are someone to the rest of the population. It's a car just like any other and should be treated accordingly :Welcome:

PS-There are 2-3 Lamborghini models they appreciate.

 

[Starsky]

Im kinda torn on the subject, I do believe that if you want a new ride & you work hard for it, then reward yourself.. Who here that posts on this forum or anywhere else knows how long they have to live on this earth? Tomorrow's are not promised & thats a fact-look at all the world events.. So if thats fact, then one should try to enjoy his/her time they have left.. One caveat, however that i will add is is to make sure you have the means to pay it off within a year or two max.. IMHO..

 

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[PEERless]

This topic provided a recent turning point in my own decision-making.

Good for you, John.

I would say slow-lane millions do drive Lamborghini it just depends what model you are talking about...There are 2-3 Lamborghini models they appreciate.

I'm referring to the get-rich-slow mentality of people like David Bach. These people drive older cars than I do and have never tasted a latte.

And which models are appreciating? Me want!

 

[rcardin]

1999 f-150 108k miles. (owned since 2001) Have driven it To Florida twice, Disney world for the daughter when she was five and Pepsi 400 race in daytona last summer. Dallas to Puerto Vallarta for a month 4 years ago. Paid for over 5 years
Wife drives a 1997 Buick Le Saber. Paid for with cash.

we average about 18 miles a day commute. If we can't pay cash for a vehicle we will no longer buy it. She wants a Lincoln Mark VIII. They can be bought withlow mileage for less than 10k with low mileage. For a middle class income a car payment is a waste of money. Find the nicest car with low mileage and pay cash.

I went through my Corvette stage where I thought I wanted one. ( Just turned 40 ) I even thought I might deserve one. When I can pay cash for it and not feel it I will own one or two. Until then my truck has at least another 3 years in it.

 

[PEERless]

My wife overheard in the Volvo dealership a mechanic at the servicedesk tell an unhappy customer "Ma'am, if you can't afford the pay for the service on a Volvo, maybe you shouldn't own one".
She said that she thought to herself "How true".

Eesh! Ballsy mechanic!

 

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[WheelsRCool]

Spending money on your passions are fine as long as you can comfortably afford them IMO. Warren Buffet, he was always content to have a relatively ordinary home, to him a car is just a machien to get from point A to point B, clothes are for warmth, etc...Sam Walton was the same, he lived in an old house and drove an old beat-up pickup truck. The guy who founded K-Mart was so super cheap he would stuff newspaper into his shoes to cover the holes, even though he was a multi-millionaire (though if you get that extreme, IMO there's something a bit wrong with you, just buy a new pair of shoes!).

I love cars, clothes, and architecture, so I will spend $$$ on those things when I can, however as of now I am incredibly frugal.

Some people it varies, they might be passionate about cars but not give a crap about how they look, so they buy the best cars but buy cheap clothes.

Or the academic type who loves books, so they drive a normal car and wear normal cheap clothes, but buy expensive, leather-bound books.

Different strokes for different folks.

 

[hakrjak]

Another reason I won't buy a new car for as long as possible --

I've bought 2 brand new from the dealer, and both times I've walked away from the lot feeling absolutely dirty, taken advantage of, like a rape victim must feel after the deed is done. I wanted to go home and shower again and again, but no amount of soap could cleanse my soul after that disgusting experience.

Who wants to sit there for 8 hours, sweating and haggling and arguing, and making false threats just to get your way? I expext many others have had the same experience

Cheers,

- Hakrjak

 

[SteveO]

I always purchase new cars. To me the process is fun. All the financial information for determining a price is out there for us to obtain.

 

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[MJ DeMarco]

The last 2 new cars I bought were painless -- walked in, told the salesman "I will pay XX,XXX + tax and license for that car over there ... I need a YES or a NO ... if YES, Ill go get a cashiers check, if NO, I won't waste your time and Ill leave".

The only two answers are YES or NO. If any other verbal diarrhea emanates from the salesman's mouth, I say "So the answer is NO? Ok, thank you" and I proceed to walk out.

I've done this two times:

1 time I got a "YES" and I drove away with a new car 15 minutes later.

The other time I did this, I got the typical car salesman BS - "my sales manager says, come into this room ... blah blah" - at some point I had to say "Listen, YES or NO -- there is no middle, no ifs, no whens -- THAT CAR -- YES OR NO?! Its pretty simply ... I'm not going to sit here longer than 5 minutes haggling over a YES OR NO!"

I walked out 3 times before I finally got those motherF'ers to say "YES".

You can't let these guys play their game.

(PS: The car makes in question: Lexus gave me a YES, Toyota tried to game)

 

[Russ H]

Good for you, MJ.

Mercedes dealer and one of the Ford dealers we went to were both like that. Ten minutes, tops, and we had bottom line numbers with no BS.

Sadly, the place we bought from were a bunch of lying con men. I kept asking myself, "Why am I buying a car from these a**holes?"

(Answer: b/c the car had a factory warranty, so we'd service it elsewhere, and we were getting it for about 20% less than the lowest blue book (trade in) price. With less than 15K miles).

Simply put, we bought a great car. But we hated the dealer.

It was my first experience like this-- every other time had been pleasant.

Problem is, I have a very specific list of things I need/want in a car. So when I find one w/what I want, at a great price, it's hard for me to just walk away. I try to make it work.

(noting again that I'm not a typical buyer--I really shop for deals. We bought a car for $19K out the door that everyone else was selling for $23-28K).

-Russ H.

 

[PEERless]

I always purchase new cars. To me the process is fun. All the financial information for determining a price is out there for us to obtain.

Anyone else confused by this?

 

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[SteveO]

Anyone else confused by this?

Why not ask me instead of everyone else?

Pricing information is readily available for most vehicles. It should not be difficult to negotiate a price on a vehicle if you know how much you are willing to pay.

 

[EasyMoney_in_NC]

I'm seeing a trend here!!

How many of you who are free or have broken $1M drove used cars, paid cash, etc. instead of having a car payment?

Lance

I am. I bought my 1997 Porsche 911 C4S for cash a few years back. I bought it for a steal, did a little maintenance work to it (hence the purchase price), spent some more money making it my own and have no payments for a passion that is one of the most sought after models in the (common) P-car world. I have no payment, and although its an expensive car to maintain, I can afford it because I do most work on it myself. I LOVE MY CAR! there I said it, and I'm not ashamed Do I feel rich? sure. Does it boost me up? sure. Do I care if other don't care for that?? Nope. I've put myself on the line in the past which allowed me the opportunity and great fortune of being able to do it and I make no apologies for having it.

I think its an inner personal thing (getting back to the original post's question) to know what point you can or should use your money on toys like these. Paying cash is a must, but the when is up in the air. Do it when it feels right. And if you're young (like me) and you're wrong, hopefully you'll have time to recover. If old and still not there............maybe to late Nah, never to late

 

[biophase]

Anyone else confused by this?

A new car is a new car. It's like buying any other product. A TV is the same whether you go to Best Buy or Circuit City, so your only factor is price (if you're paying cash). So it's easier to shop for new cars. You just determine a price you'll pay and you walk in announcing it.

Same year, model and mileage used cars are very different. If you want a 2002 Red Honda Accord with 50k miles you cannot expect that they are the same. Therefore, you cannot walk in with a set price to pay. You have to test drive and evaluate each car individually, thus causing you alot of work. You have 5 test drives, 5 carfaxes, 5 mechanic checkups and 5 people to bargain with. One car you may offer $5,000 while the other cars only $4,000.

 

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[hakrjak]

Yeh I definitely agree with paying cash. If you don't have cash -- Even if you have to take it out off a line of credit or plastic, just so you can offer cash with no trade in -- you'll get the best deal. Then head to your bank that afternoon and finance it if you must.

My worst experiences have always involved trade-ins... I'll get them to where I want on the price of the car, and then they lowball my trade and try to make money on the back end like I'm some kind of idiot. A majorly insulting learning experience for me.

- Hakrjak

 

[PEERless]

Why not ask me instead of everyone else?

Pricing information is readily available for most vehicles. It should not be difficult to negotiate a price on a vehicle if you know how much you are willing to pay.

Just keeping a dialog running. I see what you're saying: if new is what you want, you can make an educated offer.

This is a really interesting thread, and whomever started it should get mega rep.speed. :smxB:

 

[PEERless]

I can say that when that day comes, I long for the Reventón.

 

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[SteveO]

I see what you're saying: if new is what you want, you can make an educated offer.

Yep.

I have almost always purchased new cars. The exception is my classic '66 Bronco. The idea that a car depreciates after you drive it off the lot is accurate. But, I tend to keep my cars for more than 5 years.

There was a question about paying cash for the car if you have it. The answer is yes and no. While we do have the cash, sometimes the financing can't be beat. After we negotiated our purchase for an Infinity FX, the dealer asked if we wanted to take advantage of the 2.99% financing. Seemed like an easy decision to me.

We paid cash for my wife's Mini though.

 

[rcardin]

when we were looking formy wifes truck we wanted to drive a few of them to see which one she liked best. We were at one dealer and told them we wanted to test drive another manufacturers truck before we decide. The guy was really tough to get rid of. Typical car salesman. He asked why we wouldn't want to just get the truck we were looking at. My wife asked hime if he married the first girl he slept with. Completely threw him off his game.

We did end up buying from him later in the day. Put 2500 miles on the truck before it got stolen and stripped for the front end parts. Fortunately the only extra coverage I got was GAP insurance. They paid it off including the 3k we were upside down on her trade in. Lojack also sent us a check for 3k. So we actually made money buying a new vehicle.

 

[SteveO]

My wife asked hime if he married the first girl he slept with.

:smilielol:

 

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[tbsells]

My wife asked hime if he married the first girl he slept with. Completely threw him off his game.

:eusa_clap: Maybe you should get your wife on here. She sounds like a buttkicker.

 

[hakrjak]

Maybe we should start a new thread to talk about how to get the best deal on a new car? I know there are lots of secrets of the auto trade regarding price. Even the "Dealer Invoice" price is not the dealer's ultimate cost, since they usually collect a 2-5% "Dealer Markback" from the manufacturer, which amounts to a rebate.

How much should you pay? $500 over invoice? Invoice price? $500 under invoice?

I'd like to hear some opinions from the auto-buying pros that are proclaiming their prowess above.

- Hakrjak

 

[SteveO]

I'd like to hear some opinions from the auto-buying pros that are proclaiming their prowess above.

- Hakrjak

This is good Hak. I don't actually spend a lot of time figuring this out as it might not seem like a good use of time.

I went $500 over invoice on my '07 Infinity FX. It was well under the sticker but I don't recall how much.

No real prowess here. Just the ability to get a fair price and an easy process. I think the first statement that I made was that I enjoy buying a car. The hard part is figuring out which car to get in the first place.

I told a saleman once that he didn't need to keep using all his tactics on me. He said that he couldn't help it... he's a salesman. Well, I guess you needed to be there because we laughed about it. He dropped the pressure and I got a good deal on a car.

 

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[australianinvestor]

At what point are you so rich that you should (not can) buy a six-figure car?

When the financial return on the total cost of the car, otherwise invested, is less than the lifestyle/emotional/fun return.

 

[Russ H]

At what point are you so rich that you should (not can) buy a six-figure car?

In my previous life, I worked with a lot of multi-millionaires.

Some were just average Joes (or Janes) who had worked hard and then cashed out, with 8 and 9 figure net worths (I had a few billionaire clients as well, but they were all workaholics-- go figure! )

Anyways, some of the folks that were worth between 50 and 500 million, who were retired, had a really interesting view on money.

They had gotten to the point where they had done the math, looked at the return on their (very conservative) investments, and figured out that they would likely *never* go through all the money.

Example:

You have 100 million dollars, invested in 30 year T-bills at 5% per year.

$100,000,000 x 5% = 5,000,000 per year in interest income ALONE (not touching any of your $100M)

That's over $400,000 a month, or over $13,000 A DAY.

Multiply by 5 for the guys worth $500M ($25M/year, $2M/mo, $70K/day).

As they explained to me, very matter of factly, at that level, spending a few hundred thousand here or there really didn't put much of a dent in things.

So they did things like:

-Put in $300,000+ home theaters to watch movies and sports (why not?)
(that's how they met me)

-Spend $150,000 on a Mercedes, just b/c they liked some little feature it had, and was comfortable.

-Drink nothing but their favorite wine any day they wanted ($300-500 a bottle).

-Have fresh organic veggies Fed Ex'd to them 3 times a week, since they didn't have any good organic groceries nearby.

Total cost of these luxuries over a year: A drop in the bucket (less than $1M), when you're getting interest checks for over a million dollars every month or so.

So yes, there are times when you can buy these seeming luxuries and not even make a dent in things.

But I wouldn't use the word "SHOULD" or "MUST". Because folks like Carnagie, Gates, and Buffet have intentionally *not* spent all of their money on themselves-- but rather, on others (through foundations and endowments).

So if you really don't care about cars (or, more likely, would feel weird driving an expensive exotic beastie b/c it just isn't who YOU are), then there really is no good reason to buy one--even if you *can* afford it.

That's the beauty of having all that money-- you can do whatever you want with it--whatever feels right to you-- and not worry so much about keeping up with the Joneses or what others might think.

-Russ H.

 

[Z5 FILMS]

Maybe we should start a new thread to talk about how to get the best deal on a new car?

- Hakrjak

The best way to get a deal, or to do as MJ said..."This is how much I will pay. Yes or NO?"

If you let them get to the "4 square" garbage, you're already losing.

 

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[PEERless]

$100,000,000 x 5% = 5,000,000 per year in interest income ALONE (not touching any of your $100M) That's over $400,000 a month, or over $13,000 A DAY. Multiply by 5 for the guys worth $500M ($25M/year, $2M/mo, $70K/day).

I WANT THAT! :hl:

If you let them get to the "4 square" garbage, you're already losing.

Heh. You mean this thing?

 

[Russ H]

$100,000,000 x 5% = 5,000,000 per year in interest income ALONE (not touching any of your $100M) That's over $400,000 a month, or over $13,000 A DAY. Multiply by 5 for the guys worth $500M ($25M/year, $2M/mo, $70K/day).

I WANT THAT!

Peerless-

Is this a goal for you?

What is your PLAN for getting there?

-Russ H.