Growing financial wealth vs Buying vehicles

[chungstachung]

Hey guys,
I've been pretty focused on finances lately and making smart decisions. But how do some of you justify owning a relatively nice vehicle but also growing your finances? Is owning a decent car completely against growing wealth? (sorry for the vague post, ill elaborate as the questions come)
Ex: I want to buy a 2013 audi s4.

[dtrieu]

The most ideal way would be to buy a car that is 1-2 years old when it's taken the biggest hit depreciation wise and drive it for a year and sell it before it's value drops more and is out of warranty. If you did that effectively on certain cars - you'd probably be even money or only lose a little bit from your purchase price to your selling price if you got a good deal.

[revelations]

The idea is that once you're well off financially, you can then buy what you want outright with cash. Growing wealth takes time and driving around in a massive depreciating asset makes zero sense if you can minimize that depreciation.

Buying an older Audi/Merc/BMW is a surefire way to lose money on maintenance headaches BTW>>> there are far better used performance vehicle choices out there.

[dj_patm]

Not every single thing you do has to be the most prudent financial decision.

If you love driving and cars increase your enjoyment of life, like they do for most people on here, then it's not a bad investment even if on paper it's awful.

So long as you don't take on too much and are okay with paying the interest and realize you're going to lose a lot of value and you understand how that effects your finances, who cares? Again, you're allowed to spend money on fun, otherwise wtf is the point?

This is all within reason of course.

[ercchry]

Have enough growth that you beat inflation, and the rest covers the finance/lease payments of your car

But most of use are getting kinda old... have homes already, well into careers, etc

[RealJimmyJames]

Cars are a good place to spend your wealth. That is all.

[eblend]

Two things.
1. Don't buy that Audi....I have two co-workers with Audi cars at work, both swear by them, and both plan on getting rid of them before the warranty runs out. Guess it's very expensive to maintain, I wouldn't know.

2. I bought my first brand new car at 33, which is what I am now, up until this point it has always been a reliable used car. During those years, I saved a ton of money not having car payments etc. Buying this new car I knew that it would lose money the moment I step foot into it, but I wanted it, I had the cash to pay it off right there and then. It makes 0 financial sense, but you make money to spend it, so if you enjoy it, why the hell not. Nothing in life is free, so once you are financially in the position to do so, go for it. It gives you enjoyment, peace of mind. It's not an investment, it's an instrument to your enjoyment, so just go for it.

As someone mentioned, most people on this forum are well into their careers now, not teenagers driving riced out civics, so more people have the money to buy cars they want. There will always be those who spend above their means just to keep up with the Joneses and finance cars left and right, like my co-worker, who is bewildered by the idea of not having a car payment. Tried to explain to him why it's a bad idea to buy a brand new car when his existing financing is almost up. His argument is "it will be cheaper monthly then I pay now!".....completely ignoring the fact that he will have to pay 5 years more, vs not having a payment at all. To some people....it's just something they do, or in his words "you will always have a car payment"....a great quote we tease him with all the time now.

[revelations]

This quote is hidden because you are ignoring this member. Show Quote

Not every single thing you do has to be the most prudent financial decision.

If you love driving and cars increase your enjoyment of life, like they do for most people on here, then it's not a bad investment even if on paper it's awful.

So long as you don't take on too much and are okay with paying the interest and realize you're going to lose a lot of value and you understand how that effects your finances, who cares? Again, you're allowed to spend money on fun, otherwise wtf is the point?

This is all within reason of course.

Well, the original question had to do with reasonable financial choices for the average person.

If high end vehicles are a passion, and you arent a high earner, you wont get very far fiscally - but thats not the point then in those cases is it

[Sorath]

Do what makes you happy.

[max_boost]

This quote is hidden because you are ignoring this member. Show Quote

Do what makes you happy.

Basically this.

The moment you start comparing yourself to others is where things get blurry.

Having said that I don't know a thing about you, how old you are, where you are in life etc.

[Xtrema]

This quote is hidden because you are ignoring this member. Show Quote

Hey guys,
I've been pretty focused on finances lately and making smart decisions. But how do some of you justify owning a relatively nice vehicle but also growing your finances? Is owning a decent car completely against growing wealth? (sorry for the vague post, ill elaborate as the questions come)
Ex: I want to buy a 2013 audi s4.

Anything beyond a basic Civic is a want, not a need.

My take is my vehicle cost must be less than 10% of my net. So if my payment is $600/mth. I better be making at least $100K before tax. But that's my rule, other people are more lax. It's whatever you are comfortable with. Some people are ok with blowing crap load of $ gambling or booze. Everyone got a vice.

As for the car, I won't bother with high performance German cars that are out of warranty unless a) you know how to fix them and b) you have another car to drive while that car is down.

My experience is, the cheapest way to own Germans are from year 2 to year 4. Up to 6 years old is also ok if there is CPO warranty coverage. Once warranty is out, don't bother. Too many things can go wrong and when they do they cost way too much to fix. Or don't own, just lease. So if there's a problem, it's not really your problem.

Is owning a decent car completely against growing wealth?

Only if don't budget it correctly. But generally, cars are expenses and liability, not investment. The return is the joy it brings you because that's your vice.

[bigbadboss101]

When I buy a nice car, I often get buyer's remorse. I had my X3 for 1.5 years and decided I didn't want $1400 car payments. When Ryan was at BMW he arranged to buy the car back and pocketed a bit of cash. If one can afford it and it is feasible, then get the vehicle. With that said it is good to have $ in the bank for the rainy day fund. $ to help parents, siblings, and people you don't know. Yup, people you don't know. IMO to be able to afford giving someone $1400 a month beats a $1400 car payment.

[chungstachung]

fair enough, i've had my Tacoma for a few years now and the payments are just about done. Getting kind of bored with it and really don't need a truck anymore hence the itch to get back into a vehicle. Been working for a while and making decent money so I figured getting back into a fun "grown up performance" vehicle was a good idea but contradicts my financial plans.

[Buster]

This quote is hidden because you are ignoring this member. Show Quote

Hey guys,
I've been pretty focused on finances lately and making smart decisions. But how do some of you justify owning a relatively nice vehicle but also growing your finances? Is owning a decent car completely against growing wealth? (sorry for the vague post, ill elaborate as the questions come)
Ex: I want to buy a 2013 audi s4.

I solved this problem by buying a car that ended up appreciating over the time I owned it.

[Sugarphreak]

...

[TYMSMNY]

This quote is hidden because you are ignoring this member. Show Quote

I solved this problem by buying a car that ended up appreciating over the time I owned it.

which would be...

[chungstachung]

examples of said performance vehicles?!

[ercchry]

He is probably talking about the CTS-V wagon... it’s hard to find cars that will appreciate till it’s too late

Air cooled 911s are an example though... for modern stuff it’s usually a $$$ car to begin with though

Best bet is probably to find “the last of” something... I’ve picked the E9X M3 myself... worst case in the mid term is a value hold I suspect, helps that I only drove about 10k kms in the last year too

[Buster]

This quote is hidden because you are ignoring this member. Show Quote

He is probably talking about the CTS-V wagon... it’s hard to find cars that will appreciate till it’s too late

Air cooled 911s are an example though... for modern stuff it’s usually a $$$ car to begin with though

Best bet is probably to find “the last of” something... I’ve picked the E9X M3 myself... worst case in the mid term is a value hold I suspect, helps that I only drove about 10k kms in the last year too

Ya, the CTS-V. Gone up about $10k since I bought it.

But I was being a bit sarcastic because you can't plan around that. It's just luck. Although there was a consensus that the Wagon would become a collectors item sometime in the future, no one expected it to appreciate in the short term.

[killramos]

For some people having a money pile and living in squalor makes them happy. For others they like to buy things like cars which makes them happy.

You just need to decide what kind of person you are.

Very similar to live to work and work to live people.