When did you decide you can afford a luxury SUV/Car?

For the fiscal conservatives, it is interesting that you choose a luxury item to get from A to B.

We all like to be comfortable and have fun though I guess!

Originally Posted by UncleJ

Everyone makes good points! You are in a depressed real estate market there and great houses in good areas are -- dare I say it -- "cheap" now and at a level you may never see again. Forget the car, get a house!

We already bought one..took advantage of the 8k first time buyer credit 3yrs ago..found a steal in PV...

I like your point of waiting to see what the next version looks like though while I save more...

I am not so sure. I am watching SV real estate market. Inventory is low (those who overpaid in 2006-2008 are waiting will selling), I believe the prices will not go up significantly over the next 1-2 years, etc... I prefer to buy when there is a good choice and not to buy whatever is on the market. I am waiting with the purchase...

Originally Posted by UncleJ

Everyone makes good points! You are in a depressed real estate market there and great houses in good areas are -- dare I say it -- "cheap" now and at a level you may never see again. Forget the car, get a house! (...)

Originally Posted by ductman

I am fortunate enough that my employer reimburses me 100 percent on my lease payment, insurance, maintenance and I have company fuel card which I can also use on any personal roadtrips .

Wow! And they know you have a BMW on their dime?

Buy the house first, You might not qualify if you have a big car payment.Once you buy the house,Getting a car loan is even easier.

Originally Posted by Smj14420

For the fiscal conservatives, it is interesting that you choose a luxury item to get from A to B.

We all like to be comfortable and have fun though I guess!

Depends on what you mean by "fiscal conservative." For myself I define it on a relative level, meaning spending much less than I am bringing in.

So when I was in college, I would only buy pizza once a month as a luxury, ate a lot of macaroni and cheese, toast covered with gravy, soup with loads and loads of crackers, etc. Owning a Corvair, and using it as little as possible, was a fiscally conservative decision for me at that time, while owning a brand new Plymouth Valiantwould have been fiscally irresponsible for me, at that time.

Now that I am over 60, having owned only 5 cars in my life, I think buying an X5 diesel for cash was also a fiscally conservative decision, in relation to my income and accumulated funds over the years, e.g., if one has the income such that they could buy a Porsche 911 Turbo, but they buy a Boxster instead, that is a fiscally conservative decision for them.

Originally Posted by Penguin

Depends on what you mean by "fiscal conservative." For myself I define it on a relative level, meaning spending much less than I am bringing in.

So when I was in college, I would only buy pizza once a month as a luxury, ate a lot of macaroni and cheese, toast covered with gravy, soup with loads and loads of crackers, etc. Owning a Corvair, and using it as little as possible, was a fiscally conservative decision for me at that time, while owning a brand new Plymouth Valiantwould have been fiscally irresponsible for me, at that time.

Now that I am over 60, having owned only 5 cars in my life, I think buying an X5 diesel for cash was also a fiscally conservative decision, in relation to my income and accumulated funds over the years, e.g., if one has the income such that they could buy a Porsche 911 Turbo, but they buy a Boxster instead, that is a fiscally conservative decision for them.

Well said, point taken.

Originally Posted by AutoUnion

Wow! And they know you have a BMW on their dime?

Yup, gave me the go ahead to get rid of the MDX for the BMW !

Living in AZ, you're doing ok...go for it !
If you were living in NYC or the tri state area close to NYC, you'd be at the poverty limits and I'd say pass !

Buying and moving to a new house and having kids is always more expensive than you think. Go for the house first.

And bank some sleep before the kids.

Originally Posted by pa50i

And bank some sleep before the kids.

OMG... wiser words have never been said to men with little ones. I'm so freakin' tireddddddddddddddd.... and it's only been 26 months of sleep depravation.

Time to lock myself in the wifey's X5D...

Kanar, the OP bought a house several years ago in the depressed Sun Valley RE market -- and it was/is. Unlike the Silicon Valley RE market which didn't much hiccup during the recession/bubble pop and is back strong with RE agents cold calling and knocking on doors to see if you want to sell -- houses are going for over the asking prices and bidding wars are common place in the "hot" areas. Unfortunately just over the hill in the central valley, of Tracy, Manteca, Mountain House etc. there are still foreclosures and empty REO houses glutting the market. If our beloved Gov Moonbeam had approved a "bullet train" between there and the valley here to connect with BART/Light Rail it might have made some sense -- rather than just connecting two central valley towns -- sort of the train to nowhere. The OP did not include his house payment on the financial statement at the beginning -- of course he could have paid cash I guess.

Originally Posted by UncleJ

Kanar, the OP bought a house several years ago in the depressed Sun Valley RE market -- and it was/is. The OP did not include his house payment on the financial statement at the beginning -- of course he could have paid cash I guess.

I didn't break it out, but its include in the 3000 of general monthly outflow...and yes, you can get a pretty nice place in phx for relatively cheap. We bought at the bottom in a great area and have watched prices climb little by little.

As you can see by my amount of posts, I am new to the forums. What does "AD" mean, when you guys are referring to your vehicles, I am gathering that it is some sort of option.

Yes it is an option - cost about $3,500. IMO an excellent thing to have . . . furthers an already great handling experience . . .

SMJ by PV I am assuming you meant Paradise Valley right. Nice area and great choice!

I am in no position to give financial advice to anyone. It really depends on you and your spouse to figure out how the two of you want to spend your play money. My wife and I are car enthusiasts so a good chunk of our play money goes to our cars.

If you are looking affordable cars, doing it doesn't seem to be much of a bother these days. A site I found helped me type in my deposit and monthly obligations, so I could determine exactly how much to afford. If you turned into online searching for the car that is best for you and suits your budget, your search is over. All the info you must have is located at Car Deal Expert. Try visiting the site for more info. _sl_

Originally Posted by Smj14420

Thanks for the honest feedback everyone! I wasn't sure what to expect! I'm probably small fish in this market... Lol

I forgot to mention the housing, for clarity, we own a home. Bought 3yrs ago. 1400 mtg. Probably have somewhere around 60-80k in equity as of today. We don't plan on paying it off anytime soon.

We haven't come into a pile of money to be able to pay cash, which would obviously be preferred. We are typical working folk however our goal is to keep the monthly obligations under 1 persons monthly take home salary, so figure 4250.

I'm feeling pretty good about it, but may wait a few more months to be able to put more down. I'd like to be in the 50% range.

Thanks for all the input, it's alway good to learn how others do it/see it!

Glad to see someone that recognizes the importance of saving. My personal opinion is that you don't want your car payment to exceed 15% of your take home pay. Others will say 20%, but most don't consider the ancillary costs of a car...insurance, taxes, fuel, when calculating a car payment.

Originally Posted by Decboy

I am in no position to give financial advice to anyone. It really depends on you and your spouse to figure out how the two of you want to spend your play money. My wife and I are car enthusiasts so a good chunk of our play money goes to our cars.

My wife and I definitely fall into this category. We bought our house because it had a 2 car garage (rare for Charleston).

... never mind ...

OP.

Looks like you are already being smart with your money at 31. Good job. As my dad always said, pay yourself first because nobody else is going to.

For me I follow what others have echoed, if I can't pay cash it, don't buy it. I do use OPM when it makes sense. For example, I am financing the min amount through BMWFS to get the 1500 in holiday cash they offered. I get 1500 off the top and pay the note off in 4 months when the prepayment penalty expires.

I paid cash for my house and have no debt. I do like nice cars. The fiscal conservative in me says buy a Honda accord and drive it into the ground. The fun guy in me says life is short and if you can afford it, who cares I have no kids, am 47, have ample retirement savings, and like to enjoy life..so, I do

Originally Posted by Smj14420

Hi guys, new to the board...

So, I am tossing around the idea of buying an X5 but haven't talked myself into it yet. Just curious what helped others bite the bullet. Couple questions for you.

1.At what point in life did you make the determination that you can afford an upscale vehicle?

2.How much monthly discretionary income would be advisable prior to taking on a BMW?

3.Also, how do most people go into the deal on a 40-70k purchase? Minimum down/high payment, Max down/small payment on a purchase to be held 5-7yrs.

My situation is this:
31yrs old, married, no kids. 1 child planed 2 yrs out. New house within 5 yrs
150k household income
8500 take home
No current car payment/debt
1yr reserve in the bank
401k maxed at match
5500 discretionary/savings at the end of the month
Current car: 350z which is not childseat friendly, but will keep as I enjoy driving it.

Personally this would suggest room for somewhere between a 500-1500 car payment/insurance, which would allow for a variety of nice vehicles new or used, but I'm having a tough time justifying the additional expense vs something more economical. I am drawn to the x5 as a driving enthusiast and I think I would enjoy the performance/utility tradeoff.

I'm currently eying the x5d used for ~40k or new for ~65k.

This might be unconventional laying it all out there, but I'm curious how current owners came around to the idea of owning a luxury vehicle.

Thoughts?

Some people have ridiculous amounts of money. Don't forget that.

great read here

Sent from my XT557 using Bimmer App

For me, the X5 was my first new car purchase at the the age of 36, so I figured that with all the money that i saved by not purchasing a car prior to this (i had an 86 accord from gramma for $1.00 and a 05 Subaru Legacy GT that was given to me when my dad passed in 05 which was used to trade for current X5), I used toward the X5. I purchased and financed at 1.9% and put down a huge chunk, leaving me with a 162.00/mo payment for an X5! About 5K left to pay. Not bad IMO. As one of my buds always says, "you owe it to yourself!" Also, I had a third child on the way and needed to replace the legacy with something bigger. I would have never gotten rid of the legacy if it held three car seats, since the price on it was right. Good luck