Riad

Arrogant and ignorant.

Eggplant Cab

Well my little cousin just graduated from college and wanted a bling car. He set his sights on a BMW E46 M3 which was going for a premium($5k over sticker). He made $2.5k a month and didn't qualify, so he got his gf to jump in and together they qualified. Apparently, the finance manager tried to talk him out of the lease and everyone else gave them the "oh please, buy a kia" look. But he leased that M3 for 3 years and was very happy.
Leasing and financing give you inroads to pleasures reserved for a few. I'm quite sure there are many who border on the "don't qualify" list. Do I think stretching yourself thin to buy a dream car is worth it? Personally, no way. But the little cousin was happy with his M3, crappy 1 bedrm rental and his big computer and monitor. He came to me for advice, I told him forget it. But he also remembered the story of me buying my first Porsche (90 964 Targa) by refinancing my newly purchased house (1 year into payments) at 22 since I had the pay full doctrine engraved in my head from my dad.
So yes I was stupid when I was young but luckily I made it through well.
It's nice to have the security of buying a toy without worrying about payments, and that's the only way I'll buy most anything now. Problem is now the wife is itchy for an italian exotic!

boolala

I recall seeing a guy on TV one time who wrote a book saying you should endevour to "die poor". By that he meant spend all your money before you die, enjoy it and don't horde money you may never use. The only problem with this philosophy is that you don't know how long you are going to live. You don't know what resources you will need in the future. My take on this is the exact opposite of ScottS. Because life is unpredictable you may well outlive your resources. The only thing worse than dying with a lot of unspent money is outliving your resources. Think about it.

Now I really don't care ultimately what people do with their money but if someone is asking for advice I'll give it. It seems to me the person who started this thread was asking for advice. And my advice was (and still is) that if you can't pay cash for the car find something more within your means.

If on the other hand you don't want financial advice then don't ask the question.

ScottS

Yes your answer is the opposite take on mine but I am not suggesting one thing or another. I was merely offereing a different set of circumstances and values. Maybe cash is king for some, but others with different velocities may alter their risk profile safely to achieve their dreams earlier than, say 53. Not everyone lives to fifty. And I treated a number of people who had their lives altered or cut short by cancer, heart disase and tramautic injury and with it, regret and loss of dreams.

So for one's own environment, skills, prospects and desires, there are many paths to achieving what is important to them. What is statistically you knew that your colon cancer, for example, was likely to come back within 5 years at a 98% probability? Would you alter your financial time horizon's and alter a plan of delayed gratification?

If you are a new lawyer and at age 25 have future earnings by conservative estimates at 100K/year for 40 years? WOuld that alter your plan to achieve the dream of a PCAR?

Many paths, many answers. For some a car is a toy for others, it is meaning. I don;t judge those who have different values and risk profiles. Their choice, not mine. But my success may not be theirs and my advice based on my experience. But lest you take it too far, this is my general advice to a general question:

1) Eliminate high interest debt.
2) Establish an emergency fund- 3 months of expenses minimum, cash or low risk, accessible investments.
3) Establish and obtain all insurance necessary including depending on your life cycle, life, disability and long term care.
4) Establish your budget for housing, expenses and supplemental saving. Establish comfortable levels of expense commitment taking into account possible fluctuations in the economy and income levels.
5) Define your discretionary income level after 1-3. Decide what your priorities are for that income. IF you would like to buy with cash, figure on how long it will take to accrue that amount. IF you want to borrow, consider the depreciation factor and target the loan to avoid being upside down. If you want to lease, define your comfortable payment and see if it is within your budget. Factor in your tax bracket, any tax benefit and uses for the vehicle.

Lastly consider a slightly used from someone who paid cash. Or anyone who maintained the car well.


Good luck.

TestnDoc

Lease. Never ever own a depreciating "asset". If you must "own" use a home equity product of some kind. A car is no investment. Good luck!!

frayed

1. See post number 43.

2. I paid cash, not through an in depth financial analysis, but b/c owning a 100k toy on borrowed money freaks me out. But, if you are OK with the concept, then go for it.

geof

Aren't debts owed in a fiat currency a good thing? You can borrow 100k U.S. dollars, buy the car, and then you only have to pay back 100k U.S. pesos in the future. At least, this is the way things seem to be going.

My irreverent $0.00048.

Eggplant Cab

Actually with my recent research, buying a Ferrari new for old owners is an appreciating asset. Showrooms are selling them for $80k+ over sticker.
However for people who are trying to get into owning one, it's a big pain.

jonquiljo

Oh sheet, c'mon guys. A Porsche is an emotional decision, as are many in life. There are no good ways to purchase one, or bad ways - just get one if you want one.

Buy, finance, lease, net worth, income,etc. are all just words that surround the experience. If it doens't make your dick shrivel, then just do it if you can! Net worth, income, and assets aren't the issue. The issue is to have fun in one of the best sports cars ever made.

You can never be sure of your financial future. If you are a "partner", your firm can fail, or your profession can be reduced to nothing with the passage of time (how many Dr.'s that are now over 50 ever thought that their potential in this world would be sucked up by the American health insurance system?) Certainly not when they were in medical school - and in 20 years it may be off to China for a "good" job. Same can be said for lawyers, architects, etc. **** happens. I won't even mention anything about those of us who go into business. Fortunes can and often do dissapear overnight.

I guess what I'm trying to say is have fun while you can - and most of all - don't take yourself or your life too terribly seriously of you may be very very dissapointed.

Hell, if you want it that bad - then steal it if you have to.

noahark2

I did my residency in internal medicine. I work for a large medical group in Hartford as a hospitalist. Graduated from college at 20, medical school at 24 and residency at 27. The other 2 people they hired at the same time quit as well as the two hospitalists before me. It left me in a very good position to negotiate. It is a private practice position and the compensation is eat what you kill minus overhead. This is unlike 99% of the hospitalist postions available. I also was made head of the divsion and now have 9 providers working as hospitalists. Most are employees. Very low overhead since we don't have an office goes a long way in helping the finances.

TestnDoc

Good point about Ferrari; however, the question posed by the original poster pertained to the PORSCHE 997, which will never be an appreciating asset.

allegretto

I'm amazed by how many physicians are on this chatline;

jonquiljo, you know too much, you must not be a physician.
noahark2, you're oversharing (but I understand, you feel to a certain extent that you have beat the system, sort of...)
testndoc, the problem with leasing is the opacity of the transaction and the fact that you cant change horses as much as you might want to without large penelties
geof, that's what interest is about.
ScottS, what is this thing about docs oversharing here?

There, have I upset anyone? I hope not, but I guess HIPPA regs make it only safe to talk about yourself...

jonquiljo

I am so glad we have people like you taking care of the sick and infirm these days. It just warms my heart.

allegretto

So, physicians must take an Oath of Poverty to be sufficently "noble"? Or do I misunderstand your intent?

What is your occupation?

boolala

As an ER doc I have heard the term "eat what you kill" before and now, as ever, it seems to me to be a particularly bad metphor for the medical profession.