Too Frugal? - New Car

[VentAlarm]

This thread is fun.

I was met with disapproval on these forums when I floated the idea of buying a used luxury car, and then I bought an even older luxury car for a little less cash and I'm so happy I did. It just happened to fit my exact criteria; one of the smoothest, quietest cars with one of the best sound systems, v8, doesn't look flashy, and stone cold reliable unlike the Germans. I'm enjoying the heck out of this 17 year old, $10k car. It makes all road trips better because it's so hushed compared to just about everything else. 50 mph feels the same as 100 mph. No hyperbole. So, an object can also be (or contribute to) an experience.

Then again, an 80k car seems like a shock of excess.

I had a similar experience. As a new attending, I posted my financial plan. Not met with approval. I upped my savings rate significantly based on the feedback and I now have a net worth approaching 700k after 3 years as an attending on an income of 250->300.

[Tim]

I had a similar experience. As a new attending, I posted my financial plan. Not met with approval. I upped my savings rate significantly based on the feedback and I now have a net worth approaching 700k after 3 years as an attending on an income of 250->300.

Sometimes people need to learn lessons on their own. There is tremendous value in that.

1) Expensive car leased 3 years. ($46k residual)
2) Expensive apartment
3) Student loans

Followed saving 20% and rent for 2 years.
Saved with a sizable cash account.
Result: A little buyers remorse, maybe I am not ready to buy a house because I cannot do everything.
3) Payoff student loans ($179k)

1) Rearended so $8k diminished value means $38k needs to be available to buy the car
2) Realize rent is too high but don’t want to move to a lower cost rental.
3) Payoff student loans ($179k)

• Buying house need 10%-20% down, closing/move expenses and 6 months mortgage and furnishings.
So now you can do anything you want, but not everything. Not enough cash. The home buying mortgage is within 2x comp, but that leaves either the student loans or car residual and takes away from spending going forward.
Followed the rules except the housing market puts you into townhouse vs single family home
and potentially a big drop in the property you can afford. You can push it, but the SL and car impact your housing choices.

Just an example of spending now vs later will prolong or impact future choices. Housing and cars impact your future housing and cars even if you follow the rules of thumb. Housing went up and you are short of cash. You can swing it with a 5%-10% down payment, but you jacked up the ongoing monthly expenses and now feel you made no progress in reducing monthly expenses. No feeling of FI.

After 2 years, you want the house and feeling of FI. Huge benefit if you would have not had the expensive apartment and the expensive car.
All that cash flow would be freed up.
I think that 20% retirement should be expanded for house downpayment in the first 2 years. The car is much more flexible.

Lesson seems to have been learned. Going to work out of the car lease and the expensive apartment. The question is how.

[Turf Doc]

This thread is fun.

I was met with disapproval on these forums when I floated the idea of buying a used luxury car, and then I bought an even older luxury car for a little less cash and I'm so happy I did. It just happened to fit my exact criteria; one of the smoothest, quietest cars with one of the best sound systems, v8, doesn't look flashy, and stone cold reliable unlike the Germans. I'm enjoying the heck out of this 17 year old, $10k car. It makes all road trips better because it's so hushed compared to just about everything else. 50 mph feels the same as 100 mph. No hyperbole. So, an object can also be (or contribute to) an experience.

Then again, an 80k car seems like a shock of excess.

What car? I need one soonish and also am fond of old luxury cars

[legobikes]

Lexus LS430 - mine's a 2004, found it with less than 70k miles, literally driven by a little old lady.

Be forewarned that it doesn't drive like the Germans either -- it's a luxobarge. If I need thrills I take the bike.

[Turf Doc]

Lexus LS430 - mine's a 2004, found it with less than 70k miles, literally driven by a little old lady.

Be forewarned that it doesn't drive like the Germans either -- it's a luxobarge. If I need thrills I take the bike.

Nice, I was looking at ES's of the same vintage. What'd you pick it up for? I'm seeing some comical prices for some 150k+ miles specimens. I realize the car market is all wonky but not sure if that extends to 15+ year old luxury cars. Kind of a weird market for those, which i hope to take advantage of

[legobikes]

Nice, I was looking at ES's of the same vintage. What'd you pick it up for? I'm seeing some comical prices for some 150k+ miles specimens. I realize the car market is all wonky but not sure if that extends to 15+ year old luxury cars. Kind of a weird market for those, which i hope to take advantage of

Dude if you're getting an older Lexus, stick with the LS. The flagship is a huge jump up from the other sedans. I got mine for $10,750, and that was after months of trawling craigslist and cars.com. But yeah, the market has gotten crazier since then, and yeah I think it applies to the LS (and the LX which is the Lexus version of the Land Cruiser). People are trotting out their mountain bikes from 1990 and trying to sell them for $400!

If you have the patience, then the other criteria I'd recommend would be limiting the search to 2004-2006 model years (got a facelift and a 6th gear), making sure the timing belt was done on time (around 90k), and making sure it has the Mark Levinson sound system. I'm sure you know mileage on it is less important than regular maintenance, and you can check for dealer maintenance records by plugging in the VIN of any Lexus at drivers.lexus.com.

I use gooffood.com any time I need to check carfax/autocheck, $5 a pop. These cars go fast. I had so many slip through my fingers because someone had already called or bought the car by the time I found the ad. I even had one old guy back out because his wife convinced him to keep the car - and they had two of them!

[childay]

I've got an ES I want to sell if I could just convince the wife

[CM]

I purchased a sports car for $75,654 (adjusted for inflation) less than 2 years out of training while earning $282,443 (adjusted for inflation). I had paid off all school debt and was maxing tax-deferred accounts, but had no other savings. It was a terrific decision.

1. Regarding those who say you can't blow money shortly after training because you'll never be able to step off the hedonic treadmill, that's just silly.

I ran up about $11,000 (in real terms) in credit card debt as a senior resident because I wanted to live it up with my girlfriend rather than moonlight. That was also an excellent decision.

After training I immediately poured everything into debt and tax-deferred savings until debt was retired.

After buying the sports car, I continued to max retirement accounts and had an extra $189,450 (real) when I sold my half of a critical care business 4 years out of IM residency.

I then spent most of that money traveling and having adventures for a year prior to fellowship, and the rest during fellowship.

When I started a solo cardiology practice I again saved a high percent of income, then left medicine with about $2M real after 3 1/2 years in cardiology.

While working as a single healthcare equity analyst in Chicago, I then spent more than I earned on housing/furnishings, car/parking, clothing, and wining/dining/theatre tickets for four years.

For the last 7 years, I've saved over 80% of net and well over 50% of gross.

My savings rate has been negative and highly positive at different points in life as my priorities and goals changed over time.

2. Regarding psychology "research" suggesting experiences > material things. Who cares?

The sports car gave me immense pleasure: every time I merged on the highway or accelerated to pass a car, every time I picked up a date, every time I stood in a long line outside a club while the valet pulled up in my sharp car, every time I went to the car wash and the kids working there always wanted to be the one to dry my car.

I don't give a hoot about cars anymore, but that car was a terrific buy at that point in my life.

Around the same time as the car purchase I spent a bunch of money on commercial quality weightlifting equipment (that I still use 30 years later). I put it in the living room of my apartment and moved the couch into my bedroom. I've been working out just about every day since age 13, but had very little time to travel to the gym. The money spent on that equipment brought me much more satisfaction than an equivalent amount spent on restaurants or hotels.

From my early 30s through mid 40s I spent a lot of money on clothing, including bespoke. Again, a great use of funds.

3. Most of the greatest experiences of my life cost nothing or nearly nothing.

[VentAlarm]

2. Regarding psychology "research" suggesting experiences > material things. Who cares?

The sports car gave me immense pleasure: every time I merged on the highway or accelerated to pass a car, every time I picked up a date, every time I stood in a long line outside a club while the valet pulled up in my sharp car, every time I went to the car wash and the kids working there always wanted to be the one to dry my car.

.

These two statements strikes me as very odd.

Regarding the first, I care. Immensely. I want to spend my disposable income in the way that maximizes my happiness. If there is data saying what will likely lead to maximized happiness, I will at least take that into consideration - may not blindly follow it, but would certainly want to know.

Regarding the second, were you consciously picking examples that show you only liked the car insofar as it makes other people (who don’t know you) said “wow?” You said it was great, but this doesn’t sound particularly rewarding. I couldn’t care less what the valet, or guy next to me at a restaurant, or guy I’m passing on the highway thinks.

[TheDangerZone]

Where is OP, anyway? Got plenty of bites on this borderline troll of a first post by asking if *not* spending 80k on a new car one year out of training would be considered “too frugal.”

[Hank]

Since the original poster hasn't replied, we're going to lock down this thread. Original poster, feel free to private message one of the moderators if you'd like to open the thread up again.