Partner wants to buy a Super Car worth 150k

[hightower]

He probably needs to just buy it and get it out of his system.  Let him finance it as well.  When the next recession hits and he's got a car worth 90k and a 130k loan on it, and his investments are worth 50% of what they used to be worth, you can say I told you so.

IMO, no more than 20% of your income to a car IMO (and that's generous).  So, to buy a 150k car you need a 750k salary and you should be able to pay cash.  Otherwise you're a fool in my book.

[ZZZ]

"he asked me what the smartest way to buy a supercar is"

The smartest way is to have tons of money (see Jay Leno, Jerry Seinfeld) such that you can afford to have your own mechanics, as maintaining high performance super cars is what can break the bank. Additionally, the smart way is to have good taste and a great grasp of the market so you buy cars that appreciate in value, not drop like a rock.

In your partner's case, he probably just wants a fancy car (and wanted to tell you about it). For 150k, he's not buying a true 'supercar', unless it's an old one. That's not exactly a ton to spend on a high end car, plenty of non-super Porsches, Benzs, etc. sell for that much or more. If he's made enough/saved enough to pay cash, then go for it -- gotta enjoy all that money you earn and save at some point. But if he's stretching to buy it (which it sounds like he probably is), he won't enjoy it as much as he thinks. Like other expensive toys, the initial purchase price just gets you in the door -- track time, add-ons, etc. will cost more.

 

[MPMD]

I generally skew towards

a) buy what you want if you can afford it and...

b) not being pathologically frugal

 

that said

 

This is absolutely insane from a financial standpoint unless you are worth, say, $10M+? The issue is the marginal experience. When you spend that much on a vehicle you are purely paying for the name on the front of the car, full stop. I have been in some absurdly nice vehicles in my life. A brand new range rover is nice but to get in and drive it's not perceptibly different from our used Lexus hybrid suv. You just can't add much beyond the top of the line "normal" brands in cars that sell in the $60-80k range. Seriously, what do you add? Is the seat more comfortable? The AC colder? The Bluetooth more toothy?

There is absolutely a quality jump between a base Rav4 and an Audi suv. It's perceptible to anyone who gets in the vehicle. Is it worth the price difference? Some people think so, some not. But the price delta between those cars is not life-altering.

This is different than a premium watch or a premium set of golf clubs by an order of magnitude. If you want a $10k watch all the same stuff applies, it doesn't do much of anything that a $100 or even a $1000 watch can't but you're only dropping $10k on the difference AND there is no ongoing cost to own a watch or a driver. In this case you are dropping 10x and significantly increasing your carrying cost.

[sebBo13]

Some of the people here seem to be car enthusiasts and other are clearly not. The latter will probably never understand the upside of owning a slightly extravagant (read fun) car. The first and only fancy thing I bought as a new attending was a 3 year old Porsche 911. It is long payed for and 8 years later I still drive the same car. I still get a kick out of driving it. It is not fancy by today's standards, in fact any decently equipped SUV is probably more expensive. I do many of the upkeep myself and the overall maintenance costs are substantially below my wife's SUV. In my weak moments I dream of a 911 GT3 or a Ferrari 308 GTS (I know very different cars) but I could see myself just keeping my current car indefinitely. Another upside of buying a classic ;-)

[danesgod]

MPMD wrote:

This is absolutely insane from a financial standpoint unless you are worth, say, $10M+?

Click to expand...

Interestingly my brother asked me a similar question to OP recently, "what do I have do I have to do today to be able to afford a supercar when I'm 50?" He also quoted me at a car more like $250k+...

After mulling it over, I came back to him with: first finish professional credentialing (architect), then get a higher paying job, always maxing retirement accounts and save and invest extra. Secure your housing situation. Get a net worth of 5MM+. 10MM+ to have a car worth 150k seems like overkill if the car is something you value to me. Owning the car when you turn 75 is also kind of silly. I think 50 was a reasonable target for him.

Pay cash for the car. I personally still think owning a car that is 5% of your net worth is insane, but could be rationalized if you're a car person worth 5MM. I think paying cash is less about financial outcome (investing and using loan might be better), rather admitting you are buying an ultimate luxury item and the mentality of that should be, "I can afford this, truly, and in cash."

He also revealed that he was strongly considering not having kids. I don't think that changes the numbers, but eliminates those costs.

Good luck OP. I'm in agreement with most people here: fancy cars are a waste of money.

[q-school]

danesgod wrote:

MPMD wrote:

This is absolutely insane from a financial standpoint unless you are worth, say, $10M+?

Click to expand…

Interestingly my brother asked me a similar question to OP recently, “what do I have do I have to do today to be able to afford a supercar when I’m 50?” He also quoted me at a car more like $250k+…

After mulling it over, I came back to him with: first finish professional credentialing (architect), then get a higher paying job, always maxing retirement accounts and save and invest extra. Secure your housing situation. Get a net worth of 5MM+. 10MM+ to have a car worth 150k seems like overkill if the car is something you value to me. Owning the car when you turn 75 is also kind of silly. I think 50 was a reasonable target for him.

Pay cash for the car. I personally still think owning a car that is 5% of your net worth is insane, but could be rationalized if you’re a car person worth 5MM. I think paying cash is less about financial outcome (investing and using loan might be better), rather admitting you are buying an ultimate luxury item and the mentality of that should be, “I can afford this, truly, and in cash.”

He also revealed that he was strongly considering not having kids. I don’t think that changes the numbers, but eliminates those costs.

Good luck OP. I’m in agreement with most people here: fancy cars are a waste of money.

Click to expand...

if I didn't have kids, I wouldn't need to have 5 million to have any car I wanted, I would just have to afford the payments. 

it's just about priorities.  I definitely would not wait until 50.  I definitely would not save and pay cash for car.

I think, I can't imagine this fantasy world that you describe. 

 

[Tim]

Suggest one of the “experience professional driving vacations “.

[danesgod]

q-school wrote:

danesgod wrote:

MPMD wrote:

This is absolutely insane from a financial standpoint unless you are worth, say, $10M+?

Click to expand…

Interestingly my brother asked me a similar question to OP recently, “what do I have do I have to do today to be able to afford a supercar when I’m 50?” He also quoted me at a car more like $250k+…

After mulling it over, I came back to him with: first finish professional credentialing (architect), then get a higher paying job, always maxing retirement accounts and save and invest extra. Secure your housing situation. Get a net worth of 5MM+. 10MM+ to have a car worth 150k seems like overkill if the car is something you value to me. Owning the car when you turn 75 is also kind of silly. I think 50 was a reasonable target for him.

Pay cash for the car. I personally still think owning a car that is 5% of your net worth is insane, but could be rationalized if you’re a car person worth 5MM. I think paying cash is less about financial outcome (investing and using loan might be better), rather admitting you are buying an ultimate luxury item and the mentality of that should be, “I can afford this, truly, and in cash.”

He also revealed that he was strongly considering not having kids. I don’t think that changes the numbers, but eliminates those costs.

Good luck OP. I’m in agreement with most people here: fancy cars are a waste of money.

Click to expand…

if I didn’t have kids, I wouldn’t need to have 5 million to have any car I wanted, I would just have to afford the payments.

it’s just about priorities.  I definitely would not wait until 50.  I definitely would not save and pay cash for car.

I think, I can’t imagine this fantasy world that you describe.

 

Click to expand...

I guess one point is that most architects don't make what many doctors make. Certainly he can make "more" if he gets famous, but I wasn't planning on that. I was planning on him making like, 100-150k. Basically, he can't cashflow it.

Tim wrote:

Suggest one of the “experience professional driving vacations “.

Click to expand...

OH YEA! that was my other recommendation. Don't buy it, just rent a supercar every time you go on vacation. Do you really want to drive your 250k car to pick up groceries?

[Panscan]

Not sure net worth matters. If you are saving 200k a year and want to buy an expensive car and it doesn't stop you from saving, who cares. Some docs make a lot of money. I guess sure you could retire a year or two earlier in that situation without the car but by the same token you could live in a cave and wear same shirt everyday and retire really fast

[burritos]

As a frugalist I wouldn't spend that kind of coin for a car. But I'm glad someone is spending their excess blood and sweat to help drive the economy.

[Nysoz]

If they like new cars every 3 years, either get an older super car or lease

[G]

Put me in the camp that says 150 isn't that super. Dont get me wrong, it is more than I would spend!

As others have pointed out, the ongoing costs are difficult to remember to factor in.

Would also point out that fancy watches do in fact have ongoing expenses. Servicing for some watches can be on the order of a couple thou every year or so....

[Lordosis]

I have a pretty super car.

Air conditioning, Power windows, Heated seats, Remote start, Power mirrors, Power lift gate.

Extra Toothy blue tooth (Thanks @MPMD I liked that one)

Hauls 8 people.

Can fit 4 car seats.

There is a button on the keys that opens the doors!

All at 1/5th the cost!

 

https://youtu.be/mohoyRj_VpU

[mjohnson]

https://www.youtube.com/watch?v=pUG3Z8Hxa5I

 

 

[Panscan]

I find it intersting people freak out about someone wanting an expensive car. Do you all live in 1500 Sq foot houses in Kansas? If not I don't see much difference and they likely get more use out of their expensive car than you do out of your 5th bedroom, second family room or whatever is in a mcmansion