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F10 / F11 (2011 - Current)
The new chapter in the highly successful story of the BMW 5 Series Sedan (F10) and wagon (F11)

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  #126  
Old 09-11-2012, 07:36 PM
goldbergx goldbergx is offline
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Originally Posted by Stealth.Pilot View Post
I think 10% of pre tax income is an absurdly high amount of money to spend on a car. Remember this is pre tax so if you look at it as percent of disposable income it is a lot more. Especially when you also net out mortgage payments, children's school fees, wife/girlfriend, etc.

I would advise spending no more than 2-3% of income on a car. Better to save and retire early. Driving a nice car is great, but not if it means working till old age. I'd rather retire by 50 than drive Bentleys and Ferraris.
At 2-3% of income, (pre-tax?) why even bother with the loan?

For example, $10,000/month income, then after tax probably $7,000/mo... and monthly recommended car loan pay is $200-$300? You should either reduce the loan term to save on interest or go for something more expensive... I think 10% of pre-tax sounds ok as max, but everyone has different priority....

The best thing is paying cash, which was what I have done so far in the past 10 years, but interest rate is so low these days, I am tempted with getting a car loan now for my next car.....
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  #127  
Old 09-11-2012, 07:55 PM
goldbergx goldbergx is offline
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By the way, this thread is more like

"Am I overspending on the car? How's others doing?"

This is all about priorities... house, car, vacation, audio, sports, food, etc, etc...

My friend, who got married recently, makes 5 figures, got about $80k student loan, then went to Italian vacation last year with credit card debt.

He does not own a car, and thinks he's living modest.
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  #128  
Old 09-11-2012, 07:57 PM
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Quote:
Originally Posted by goldbergx View Post
By the way, this thread is more like

"Am I overspending on the car? How's others doing?"

This is all about priorities... house, car, vacation, audio, sports, food, etc, etc...

My friend, who got married recently, makes 5 figures, got about $80k student loan, then went to Italian vacation last year with credit card debt.

He does not own a car, and thinks he's living modest.
What kind of watch does he own?
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  #129  
Old 09-11-2012, 07:59 PM
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Originally Posted by goldbergx View Post
At 2-3% of income, (pre-tax?) why even bother with the loan?

For example, $10,000/month income, then after tax probably $7,000/mo... and monthly recommended car loan pay is $200-$300? You should either reduce the loan term to save on interest or go for something more expensive... I think 10% of pre-tax sounds ok as max, but everyone has different priority....

The best thing is paying cash, which was what I have done so far in the past 10 years, but interest rate is so low these days, I am tempted with getting a car loan now for my next car.....
Money is cheap!! I did 50/50.
I took the cash equivalent and placed it in the market
I wouldn't recommend this for everyone, I just enjoy gambling, no, i mean trading, no, I mean investing
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  #130  
Old 09-11-2012, 08:01 PM
Ionic202 Ionic202 is offline
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Right now you can get the $750 loyalty offer to finance your new 5 series. Pay the loan off in 4 months with your cash and you still come out about $500 ahead. Add to that the BMW CCA payout and you get about $1500 between the two!
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  #131  
Old 09-11-2012, 08:03 PM
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What kind of watch does he own?
Swatch Watch?
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  #132  
Old 09-11-2012, 08:29 PM
jammat jammat is offline
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Ok, lets bottom line this; if you earn less than 6 figures and are married with one or more children, have other significant debt obligations, this probably isn't the car for you unless you have substantial assets accumulated or other non-income sources of support to warrant the expenditure.
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  #133  
Old 09-11-2012, 09:08 PM
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Quote:
Originally Posted by goldbergx View Post
At 2-3% of income, (pre-tax?) why even bother with the loan?

For example, $10,000/month income, then after tax probably $7,000/mo... and monthly recommended car loan pay is $200-$300? You should either reduce the loan term to save on interest or go for something more expensive... I think 10% of pre-tax sounds ok as max, but everyone has different priority....

The best thing is paying cash, which was what I have done so far in the past 10 years, but interest rate is so low these days, I am tempted with getting a car loan now for my next car.....
What's the appropriate percentage of income to pay if one is paying cash?
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  #134  
Old 09-11-2012, 09:20 PM
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Quote:
Originally Posted by Ionic202 View Post
Right now you can get the $750 loyalty offer to finance your new 5 series. Pay the loan off in 4 months with your cash and you still come out about $500 ahead. Add to that the BMW CCA payout and you get about $1500 between the two!
Yes, I love these financing deals. When I bought my car the offer was 0.9% for 36 months, plus $1500 cash back. I didn't put down a dime to maximize the amount of cheap money that BMW was offering. The best part was the total interest came out to be $1,178.75 or $321.25 less than their $1,500 rebate for financing. The $1,000 BMWCCA rebate was just icing on the cake.
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  #135  
Old 09-11-2012, 10:02 PM
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What's the appropriate percentage of income to pay if one is paying cash?
Um. How about having enough cash that isn't targeted to some other priority so that you can pay....cash?
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  #136  
Old 09-11-2012, 11:14 PM
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I do understand the sentiment, all I can say is that thankfully I have a wife who doesn't.

My first year of college in a small private college was about 5k, room and board included. Things are very different today.

My oldest is a Junior this year, middle son a freshman and my daughter is a senior in HS. Oldest goes to a moderately priced school, middle to a damn expensive one. My daughter is trying hard to go to Vanderbilt (32 on latest ACT, so borderline). So far the only financial aid that any have qualified for is a 5K a year national merit scholarship.

Next year I'll have to shell out almost 150K, and they all are looking to graduate school. I will have an M6 Coupe, but am perfectly willing to put it off (and have done so for quite some time) so my children don't start out in a deep hole.
My opinion: graduate school tuition is entirely on the young adult, not the parent.
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  #137  
Old 09-12-2012, 05:17 AM
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Um. How about having enough cash that isn't targeted to some other priority so that you can pay....cash?
But that would mean none of it.

Once it has been "saved" (both in the literal and the metaphorical sense), it has a targeted priority (normally retirement).
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  #138  
Old 09-12-2012, 07:26 AM
kc1953 kc1953 is offline
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But that would mean none of it.

Once it has been "saved" (both in the literal and the metaphorical sense), it has a targeted priority (normally retirement).
OK smarty. I guess I meant the money you put in that special hiding place that Mrs. Dunderhi doesn't know about.
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  #139  
Old 09-12-2012, 09:06 AM
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Leslierc Leslierc is offline
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OK smarty. I guess I meant the money you put in that special hiding place that Mrs. Dunderhi doesn't know about.
Maybe it's at home with the guns and the dope!
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  #140  
Old 09-12-2012, 10:20 AM
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Come on guys, you never should put your guns, dope, and cash in the same place. They go in three different holes in the backyard.
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  #141  
Old 09-12-2012, 02:28 PM
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Ok, lets bottom line this; if you earn less than 6 figures and are married with one or more children, have other significant debt obligations, this probably isn't the car for you unless you have substantial assets accumulated or other non-income sources of support to warrant the expenditure.
My bottom line is this on any car purchase, at any income level.
If your questioning it, don't buy it. If it means that much to you, plan for it, work harder and be patient. Don't kill your finances over a car.

Top 10 leading indicators the car is too expensive for you:
1) You tell yourself, I'm going to keep this car for 10 years.
2) You consider selling your stock options prematurely for money down.
3) You're wondering how to convince your spouse this is a logical purchase.
4) You're thinking of impractical ways to save money, like drinking or golfing less, while your drinking and/or golfing.....yes I added the "and"
5) You gain the ability to convert interest rates into payments…..mentally.
6) You're on the car builder "daily" continuing to re-evaluate and sacrificing options you wanted.
7) You start looking into home equity loans.
8)
9)
10)
HELP!! I need three more!!!
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  #142  
Old 09-12-2012, 02:32 PM
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8. You are not on track with retirement savings and college fund for kids
9. The industry you work in or is in business in is in recession
10. You plan to deliver pizza in the car to cover the payment
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  #143  
Old 09-12-2012, 03:03 PM
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You consider ballon payments as a way to lower your payment up front.
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  #144  
Old 09-12-2012, 03:12 PM
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AKI 87 is used to project budget
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  #145  
Old 09-12-2012, 03:43 PM
goldbergx goldbergx is offline
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Originally Posted by jammat View Post
8. You are not on track with retirement savings and college fund for kids
9. The industry you work in or is in business in is in recession
10. You plan to deliver pizza in the car to cover the payment
No kidding.... I have seen a guy delivering pizza in a brand spanking new BMW 3 series..... The smell will last!!!
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  #146  
Old 09-12-2012, 03:55 PM
goldbergx goldbergx is offline
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When people see someone in a car... I think they would guess the following

Japanese/American car -> Less than $100k/year income
small German car or Japanese premium -> $100k+
midsize German car -> $200k+
big German car -> $300k+
Italian or German sport car -> $500k+

So feeling just right/guilty/too modest is all up to us.....
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  #147  
Old 09-12-2012, 05:03 PM
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3) You're wondering how to convince your spouse this is a logical purchase.
Uh-oh.
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  #148  
Old 09-12-2012, 05:29 PM
jammat jammat is offline
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Uh-oh.
That's what I thought too. convincing the spouse about driving dynamics of a BMW vs Civic... They are both cars, they get you from point A to point B..
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  #149  
Old 09-12-2012, 08:42 PM
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Well, hopefully now we now salvaged a few reading this thread from getting into a financial crisis due to bimmer obsession. . Sorry BMW.
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  #150  
Old 09-12-2012, 11:04 PM
Beemerican Beemerican is offline
Hey man, check this out..
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13.) You would be driving your new BMW to the local laundromat to do your laundry.
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