Partner wants to buy a Super Car worth 150k

[I Find This Humerus]

Any car aficionados out there? My partner knows I'm frugal and so he asked me what the smartest way to buy a supercar is. I'm not sure but if it was up to me it'd be paying straight cash. But he argued taking out a loan and investing the "saved" money elsewhere to make his money work for him and not tie it up in a depreciating asset.

I get his logic but there is uncertainty if he invests his money and if we go into a recession, well he paid more for the car (due to interest) and lost money. To me it's a gamble.

I'd rather just pay the car with cash and so you know exactly what you have in it.

He likes to buy cars, drive for 2-3 years, then sell and get something else.

What would you do? Anyone here own a luxury/sports car 150k or more?

 

Spare me the "I drive a 1927 Ford Model T and it gets me Point A to Point B because I cut holes in the bottom to run it like the Flintstones so I don't pay for gas either."

 

?

 

 

[dennis]

Sorry, you'll get no sympathy from me for making a very bad decision. The consumption treadmill you're on is a guarantee you will be working a long time unless your partner is an extremely high earner and you can out save his consumption. Either choice is bad because the underlying premise is bad. Good luck!

[Moomoo]

Slightly off topic: There's law firms that will help register the vehicle in a state with a low property tax burden.  If I recall, many supercars are registered in Montana or they, at least, used to be.  A few states are cracking down on this tax dodge.  Georgia was the last state to make an issue of it.

[angeladiaz99]

I Find This Humerus wrote:

Any car aficionados out there? My partner knows I’m frugal and so he asked me what the smartest way to buy a supercar is. I’m not sure but if it was up to me it’d be paying straight cash. But he argued taking out a loan and investing the “saved” money elsewhere to make his money work for him and not tie it up in a depreciating asset.

I get his logic but there is uncertainty if he invests his money and if we go into a recession, well he paid more for the car (due to interest) and lost money. To me it’s a gamble.

I’d rather just pay the car with cash and so you know exactly what you have in it.

He likes to buy cars, drive for 2-3 years, then sell and get something else.

What would you do? Anyone here own a luxury/sports car 150k or more?

 

Spare me the “I drive a 1927 Ford Model T and it gets me Point A to Point B because I cut holes in the bottom to run it like the Flintstones so I don’t pay for gas either.”

 



 

 

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We have a SUV in that price range.

We paid cash for it. We were considering leasing it since we also like swapping out cars often but lease terms for cars in this price range are often unfavorable.

I would not play this game if I had to take a loan out.

[Kamban]

Must be a cheap supercar.

I thought most supercars cost a minimum of 350-500K and some > $1M. I think your partner needs to spend some more on the supercar to truly enjoy it. ?

[fatlittlepig]

Sorry there’s nothing super about a car that costs that much.

[Zaphod]

For this kind of car and time frame theres a couple options. Often if you lease or finance and resale, etc...in that short window of time you can actually not spend a ton of money.

I would certainly not be paying cash to have it incinerated on the spot. Least you can do with depreciation is have some inflation at your back.

The other thing is you can usually find a gently used version for an insanely good deal. Just be the person in the next step that buys it from you when you want to change. Can easily get Maserati and ferraris for under 100k if you look around.

There was a guy who owned a ferrari for a year on jalopnik or some site and tallied all his costs, and it was absolutely reasonable. Good read.

[RogueDadMD]

Do you mean partner as in “significant other” or “work partner”? Because those discussions are completely different.

I take this to mean “work partner”.

Regardless, there is no frugal way to spend $150k on a car. Once you go past the Honda/Kia/Toyota new cars it isn’t frugal by definition because you are spending not just for a new and reliable car that will last forever, you are spending for the sake of it.

Investing the difference is just a silly way of justifying it at that point. A real “super” car can of course go well beyond $150k, but that’s sort of irrelevant here. If they have the cash to buy it then they should — that’s the smartest financial way to do it, but it isn’t frugal.

If they don’t have the $ then they should probably shouldn’t, but that isn’t what they are asking. If this person actually NEEDS the potentially tiny margin he gets from investing instead of purchasing to help justify buying then they definitely should not buy.

[EntrepreneurMD]

I purchased a Ferrari on Ebay for $160K in 2010. The $75K in extras sold me. I still own it. I paid for it in one lump sum. In addition I paid about $10K sales tax and $2K for shipping in a closed truck, CA to FL. This is my actual car:

https://www.luxury4play.com/ferrari/47485-sale-2005-ferrari-f430-spyder-one-kind-novitec-rosso.htmlhttps://www.luxury4play.com/ferrari/47485-sale-2005-ferrari-f430-spyder-one-kind-novitec-rosso.html

Keep in mind substantial maintenance costs in addition to these acquisition costs. Expect to spend $2K-$15K for each service, depending on type of service needed. Serviced at least annually regardless of mileage. Major services generally at 15K and 30K miles, so mind the mileage on the vehicle you are buying, mine came with 6K miles. It depreciates at about $10K/year, more rare models may hold value better. I replace all 4 tires about every 12K miles, tire without labor cost is about $300/tire. Track time with tires require much more frequent replacement.

I have a good driving record, and pay about $1,800/year to insure it in the high cost car insurance state of Florida.

If you're worried about costs and depreciation, it may not be the thing to do for you.

Otherwise, you can go for a group highway drive with the local Ferrari club. They sometimes rent out airport runways. If you have a track in your vicinity, you can take it for professional driving classes. You can put it in car shows. I have relatives and friends with similar vehicles (Murcielago, 911 GT3RS, Bentley GT, Aston Martin, R8) so going for a weekend brunch is a good getaway.

[fatlittlepig]

I won’t spare you.

Bought a 28K car, heated leather seats, Apple car play, gps/maps etc. more reliable than the Ferrari or other “super” car, more fuel efficient, and an order of magnitude less expensive to maintain. A true super car indeed.. oh yeah and none of this angst and stress about how to pay or finance it. The purchase amount was about as stressful to me as buying a pack of gum, walked in and walked out.

[EntrepreneurMD]

fatlittlepig wrote:

I won’t spare you.

Bought a 28K car, heated leather seats, Apple car play, gps/maps etc. more reliable than the Ferrari or other “super” car, more fuel efficient, and an order of magnitude less expensive to maintain. A true super car indeed.. oh yeah and none of this angst and stress about how to pay or finance it. The purchase amount was about as stressful to me as buying a pack of gum, walked in and walked out.

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Did it come with the nose and ears?

[fatlittlepig]

I’m actually feeling pretty smug about my car. Anyways I got no time for you, I’ve already made my conclusions in this thread:

https://www.whitecoatinvestor.com/forums/topic/anyone-using-their-savings-for-aggressive-loan-paydown/

[SLC OB]

Ok, so my brother really wanted a Ferrari.... so he was smart about it. Knew that it would go down in value initially but then possibly up in value.  So he bought it used... but not until...

He bought enough rental properties for cash that the rental income would pay his Ferrari payment... but then once he got in to being a landlord (his side gig) he kept buying them for cash... Ferrari long ago paid off and he is netting ~$20K/month in rentals (not counting his day job)... to me that was one smart way to buy something silly like a Ferrari.

[CordMcNally]

Why specifically does he want a super car and which one? Is it the speed, handling, prestige, etc.? Because for all of those except for maybe the prestige, you can find much better options. Super cars are usually super expensive to maintain.

[jacoavlu]

“partner wants to buy a super car worth $150k”

tell them to look at cars that sold for $275k 3 years ago and now the owner realizes how dumb an idea it was to buy it

seriously though it’s an unwritten rule in my group that we don’t drive fancy cars.