Am I crazy for thinking of buying a Turbo S?
#31
Rennlist Member
Agreed, I work the same way.
#32
Rennlist Member
I find this to be an extremely specious argument. You are essentially saying, "Because your expenses in other areas will always creep up to the point of crowding out any other spending, you should never budget for a new car". By this logic, you can't afford a lousy new car making almost half a million a year. Similarly, Larry Ellison may not be able to afford a new car because he fihas to buy islands, yachts, etc. Also, as a lowly engineer, I shouldn't even own any vehicle--rather, I should just ride the public bus to work everyday, and maybe also be an Uber driver after work and on the weekends, so I can fund the creeping expenses in other areas.
No, instead what I do is just budget appropriately for all of my expenses and keep them in check. Can I afford $60K/yr for my two kids to go to private school? No, I can't. But I don't care because (1) I purposefully live in an area with good schools and (2) I went to MIT and my wife went to dental school having gone to public school. I see a lot of kids that went to expensive private schools that don't end up going to Harvard or MIT. Sorry parents, if you had to invest $600K just to get your kids into USC or ASU, you are a sucker. A lot of times, fancy private schools end up being a false means for parents with money to try to "buy" brains for their kids. People with money and power just can't come to terms with the fact that you can't buy good genes (yet). My investment in my kids success was to marry a smart wife, not toss $60K/yr at some private school that promises more than it can deliver.
No, instead what I do is just budget appropriately for all of my expenses and keep them in check. Can I afford $60K/yr for my two kids to go to private school? No, I can't. But I don't care because (1) I purposefully live in an area with good schools and (2) I went to MIT and my wife went to dental school having gone to public school. I see a lot of kids that went to expensive private schools that don't end up going to Harvard or MIT. Sorry parents, if you had to invest $600K just to get your kids into USC or ASU, you are a sucker. A lot of times, fancy private schools end up being a false means for parents with money to try to "buy" brains for their kids. People with money and power just can't come to terms with the fact that you can't buy good genes (yet). My investment in my kids success was to marry a smart wife, not toss $60K/yr at some private school that promises more than it can deliver.
And having lived in some of the most expensive cities in the world (London, New York and Hong Kong), I can tell you after taxes (roughly 50% all-in) and high rent and high cost of living, it is extremely difficult to save money to do things like buying a house or paying kids tuition. Let's take $400k, after taxes that's $200k. After renting a "reasonable" (not great) 1 bedroom apartment for $3k/month (bare minimum in Manhattan or SF, can be much more), he's left with $164,000 to live off, which is a great starting point if you're single. If you add loans, a wife and kids (unless the wife is also an orthopedic surgeon!), well, now you start feeling the pinch. Daycare is north of $20K/year per child in Manhattan. Nannies/babysitters are very expensive. Private schools in Manhattan/DC cost between 30K-70K/year per child. College tuition has sky-rocketed in recent years (over $50k/year in tuition for some universities). Then you have to factor in retirement funds, investments, etc. One blessing is as a doctor he's going to pay almost nothing for the best healthcare plan in the world. Again, if inner-city schools weren't so terrible, this wouldn't be a problem, but you need to make a judgment call on providing your kids with the best educational opportunity you can afford (all hypothetical, maybe OP doesn't even plan on having children, who knows).
But besides all that, there is no getting around the reality that unless OP has considerable savings, spending $200k on a car is going to be a significant financial outlay which may take him years of work to recoup. So my quesion still stands, is it really worth it? Can OP not get the same joy from a Pcar if he makes a more practical choice of buying a nice used Porsche? Since OP is just starting out and making real money for the first time, where's the harm in being cautious your first year or so to get adjusted to the real cost of living, before making a purchase that is nearly 100% of a year's worth of wages (after tax)?
p.s. I take public transportation to work everyday. The freedom of not being tied down to loan/mortgage payments substantially decreases stress and I find makes my life more pleasant. But these are all choices OP is going to have to make on his own, I'm just offering my perspective.
Last edited by caymannyc; 02-01-2017 at 04:31 PM.
#33
New member but long-time lurker here.
This post hits home for me as a physician and car enthusiast. My recommendations go along with what others have already mentioned... namely, pay off your debt while saving up the money for whatever car you'd like to buy. With your income (which will hopefully continue to increase over the years), you should buy your cars with cash in hand. I am currently saving up for a 911 and in a couple of years I hope to be able to buy a CPO 991.1 or 991.2 GTS once they start hitting the used car market with more regularity. Would I like to buy a spec'ed to order 911? I'd LOVE to, but I've decided that my current financial situation doesn't allow me to justify taking the depreciation hit as soon as I drive off the lot. That may change but my current financial priorities make it unlikely at this point.
The other thing to consider is whether or not you are hospital-employed. If you are employed by the hospital, how long is your contract? Current trends indicate that hospital-employed physicians typically get the sweetest deal from their initial contract. After that, hospitals will use any and all metrics to justify paying you less than they did initially to "get you in the fold." Just some food for thought.
This post hits home for me as a physician and car enthusiast. My recommendations go along with what others have already mentioned... namely, pay off your debt while saving up the money for whatever car you'd like to buy. With your income (which will hopefully continue to increase over the years), you should buy your cars with cash in hand. I am currently saving up for a 911 and in a couple of years I hope to be able to buy a CPO 991.1 or 991.2 GTS once they start hitting the used car market with more regularity. Would I like to buy a spec'ed to order 911? I'd LOVE to, but I've decided that my current financial situation doesn't allow me to justify taking the depreciation hit as soon as I drive off the lot. That may change but my current financial priorities make it unlikely at this point.
The other thing to consider is whether or not you are hospital-employed. If you are employed by the hospital, how long is your contract? Current trends indicate that hospital-employed physicians typically get the sweetest deal from their initial contract. After that, hospitals will use any and all metrics to justify paying you less than they did initially to "get you in the fold." Just some food for thought.
#34
The OP is here!
Guys,
Thank you so much for all of the lengthy and in depth responses to this thread. I had no idea I even received a single reply because the email I used for Rennlist registration is very rarely used so I wasn't checking the emails letting me know of new posts.
You guys seem to be a very well educated and well informed bunch so I do sincerely appreciate the wealth of knowledge you have provided me with.
Now to address some of the points that you brought up.
Student Loans / Debt: I currently have 95k in student loan debt. I am making this a priority and it shouldn't be long until I can pay it off in full. In fact, I could pay it off right now using my signing bonus and incentives + what I have in the bank. That may be what I do. That is all the debt I have, my wife and I are renting our home right now but ownership is definitely a goal (renting to see how we like our area before we settle down).
As of right now I drive a 2015 M4 that will be payed off within the next 3 months. I don't consider this debt because I could pay it off if I want to right now. But, like I mentioned in the OP, I don't like having cash tied up in cars, even though I consider myself a young enthusiast.
Guys,
Thank you so much for all of the lengthy and in depth responses to this thread. I had no idea I even received a single reply because the email I used for Rennlist registration is very rarely used so I wasn't checking the emails letting me know of new posts.
You guys seem to be a very well educated and well informed bunch so I do sincerely appreciate the wealth of knowledge you have provided me with.
Now to address some of the points that you brought up.
Student Loans / Debt: I currently have 95k in student loan debt. I am making this a priority and it shouldn't be long until I can pay it off in full. In fact, I could pay it off right now using my signing bonus and incentives + what I have in the bank. That may be what I do. That is all the debt I have, my wife and I are renting our home right now but ownership is definitely a goal (renting to see how we like our area before we settle down).
As of right now I drive a 2015 M4 that will be payed off within the next 3 months. I don't consider this debt because I could pay it off if I want to right now. But, like I mentioned in the OP, I don't like having cash tied up in cars, even though I consider myself a young enthusiast.
#35
The past weeks have had me doing a lot of thinking, researching, and driving of cars. I've grown a bit tired of the M4 so I will be moving on from it and selling it very shortly. I started looking for something to be my next Daily Driver. I thought about the Turbo S and the R8 (similarly priced) but decided against such an expensive DD. I test drove a base Carrera that I wasn't all that impressed with especially considering it's price after the options I would want. I then went over to my local Mercedes Benz Dealership and drove a 2017 C63 AMG S Coupe. I LOVE this car. It's an absolute blast to drive and the interior is second to none in its class. This, in all likelihood, will be my next DD after I sell the M4. The M4 sale money will go to buying the C63 and I'll gladly cover the rest out of pocket to have it paid off immediately. I know I said I don't like having money tied up in cars, but, with the sale money of the M4, it just makes sense this time.
#36
So, this will leave me in pretty much the same position that I was in before; I have a nice DD, but no really fun weekend or afternoon drive car.
I immediately went to work to solve this problem. I test drove a 991.2 TTS at my local dealer and, to be completely honest, wasn't all that impressed. For a 200k car it lacks exotic styling. The interior felt a bit dated and the ride was very tame and quiet. They let me do a launch and that was INSANE. I just don't think it makes up for the rest.
I immediately went to work to solve this problem. I test drove a 991.2 TTS at my local dealer and, to be completely honest, wasn't all that impressed. For a 200k car it lacks exotic styling. The interior felt a bit dated and the ride was very tame and quiet. They let me do a launch and that was INSANE. I just don't think it makes up for the rest.
Last edited by whodatmofo; 02-05-2017 at 04:52 PM.
#37
Next I drove an R8 Plus. Loved the interior and the ride but the exterior looked better in photos IMO. Seems a little girly if you can believe that. Not quite what I was looking for.
Finally, I drove the almighty HURACAN. I so giddy upon getting to the dealership and couldn't believe that I was about to drive a Lambo. I drove a Spyder because that's what I'd get if I bought one. The experience was absolutely incredible. For one, the exterior is absolute stunning and outrageous, just what I'd want in a Lambo. It was insanely quick and agile and the sounds was spectacular especially with the top down.
So, after a lot of thinking and a lot of writing, I've basically decided to get that C63 as my DD, finish paying off my student loans, make home ownership a priority, and only THEN consider the Huracan Spyder if I can put 75% or more down.
Finally, I drove the almighty HURACAN. I so giddy upon getting to the dealership and couldn't believe that I was about to drive a Lambo. I drove a Spyder because that's what I'd get if I bought one. The experience was absolutely incredible. For one, the exterior is absolute stunning and outrageous, just what I'd want in a Lambo. It was insanely quick and agile and the sounds was spectacular especially with the top down.
So, after a lot of thinking and a lot of writing, I've basically decided to get that C63 as my DD, finish paying off my student loans, make home ownership a priority, and only THEN consider the Huracan Spyder if I can put 75% or more down.
#38
Why are you putting so much down?
I would find someone that can get you a good deal, and financed at a low rate.
Lets all be honest with ourselves, you will be getting rid of the car, so why throw tons of cash at it?
75% of Lamborghini, could do much better with a money manager making 4-5%.
BTW, my Brother is a doc. I am selling his doc friend a 991.2T for 30k off MSRP with 1100 miles on it.
I would find someone that can get you a good deal, and financed at a low rate.
Lets all be honest with ourselves, you will be getting rid of the car, so why throw tons of cash at it?
75% of Lamborghini, could do much better with a money manager making 4-5%.
BTW, my Brother is a doc. I am selling his doc friend a 991.2T for 30k off MSRP with 1100 miles on it.
#39
You're heading down a similar path as I did although you're a bit more ambitious than I am. I currently have a 2014 E63 as my daily driver (I needed to be able to fit my three daughters when needed and wanted 4matic because of the winters here). Less ambitiously , I'm looking at a 991.1 GTS as a weekend car once they start hitting the used car market in earnest.
#40
Burning Brakes
Wait till you buy a house... You don't want your DTI to be high due to a car loan and then you will not qualify for a home loan. Home first, then car(s)
#42
Rennlist Member
I'm in an almost identical position to you (but a different specialty). FWIW, I decided to get a used Cayman as my splurge. In all honesty it feels a bit ridiculous, but I figure 60k isn't that ridiculous and will at least allow me to quickly begin to catch up on retirement contributions.
Either way, congrats!
Either way, congrats!
#43
Burning Brakes
If he is buying a 200K car, chances are he wants to buy a nice house and will qualify for a home based off his credit score, credit history, income, and current debt and a 200K car loan will qualify him for less home since he will have a 2k+ loan payment.
If he buys the home first, then he will qualify for even better rates on the car since he is a "home owner".
Also he is looking at a Turbo car not something like a GT3 or something else where cost of ownership is very low since resell is so strong, but not so much on a Turbo car at least short term.
Seems everyone is telling him to buy it!! But rather think if your son or daughter was asking you this question... How would you answer then?
#44
Rennlist Member
Physician home loan programs are great in some states and mediocre or even inferior to a traditional loan in others. Typically there's no PMI and little down payment but the rest varies quite a bit. Depending on the offer the minimum down payment might be 0-10% and I saw rates that were the same as a traditional (20% down) and others that were a full 1% higher than the most competitive rates. Local financing means it varies widely.
Here in Utah the lending guidelines qualified us for a home prices at something like 7-10x our gross annual household income and in our region that was far more than made sense, so a large car loan would not have had any impact at all.
Here in Utah the lending guidelines qualified us for a home prices at something like 7-10x our gross annual household income and in our region that was far more than made sense, so a large car loan would not have had any impact at all.
#45
Burning Brakes
Physician home loan programs are great in some states and mediocre or even inferior to a traditional loan in others. Typically there's no PMI and little down payment but the rest varies quite a bit. Depending on the offer the minimum down payment might be 0-10% and I saw rates that were the same as a traditional (20% down) and others that were a full 1% higher than the most competitive rates. Local financing means it varies widely.
Here in Utah the lending guidelines qualified us for a home prices at something like 7-10x our gross annual household income and in our region that was far more than made sense, so a large car loan would not have had any impact at all.
Here in Utah the lending guidelines qualified us for a home prices at something like 7-10x our gross annual household income and in our region that was far more than made sense, so a large car loan would not have had any impact at all.
My point is very simple, not smart to buy such an expensive car without even owning a home. That is not putting your priorities in the right order.