NINEZeRO

I would like to ask this board on their opinion on how much they think a person should be worth before they purchase a 100-150k car. The car I have in mind is a new or slightly used 911 Turbo. I am thinking that anyone with at least $2 million in liquid assets or total net worth of at least $3 million would be "able to afford" such a car. What do you think?

pagemaster

I think the more important question is....How much is their annual income in able to afford a $150k car.

Dave600hL

My thoughts are that you should at least be making more than double the price of the car in this instance. (With tax paid)

LexFather

Going by what the luxury institute does and Porsche/Lexus have been in the top 3 (so it is relevant to your 911 Turbo)...2006
http://www.allbusiness.com/company-a...5443483-1.html

he Luxury Institute surveyed a nationally representative sample of some 2,100 households with a minimum of $200,000 gross annual income and net worth of $750,000+ (including home equity).

2008
http://www.autospies.com/news/Luxury...ercedes-29811/

A national sample of 1,642 wealthy American consumers, with an average income of $349K and average net-worth of $3.7 million, was surveyed online.

I can't find figures for 2009....

NINEZeRO

That's interesting info, but its a little different from my question which is what do YOU think a person should be worth before they splurge 150k on a 911 turbo (or a Koniesegg ).

pagemaster

This all makes sense. Lexus claims that LX570 owners have annual income of $375k per year. Toyota's richest customer is that of the Land Cruiser with an annual income of around $250k....

I wonder what Lexus claims for the LS600h

pagemaster

I don't think it matters what they are worth...what matters is what they make one year.....You can't be work $3 mil and have no income or job and just live off investments, in that case likely $150,000 car is not in the cards...or you can make $400,000 per year and be worth $500,000.....

J.P.

When you think about it on here and other forums you have people spending $70,000+ on cars and their not worth 500k let alone 2 Million. So what is spending 100k really especially if you finance it?

It is not a farfetched idea to think someone making 150k and put 25k down on a 100k car could not “afford” the $1300 a month payment.

If you’re sitting on $2M liquid your buying cars like this cash without a flinch.

Everyone is different and people’s perception of afford changes with their interests.

MR_F1

What he said.

I think whatever you damn well please as long as you can make the payments. Smart? No, but in which dimension is buying a $100k car smart?

mmarshall

While not necessarily a loaded question, I don't think there is any one set answer to it. Each person has a different set of circumstances in life, with different assets and liabilities. One person, for examply may have enough in the bank, with no liabilities, to pay cash for a 911 Turbo.....another may have the exact same amount, but much of it to alimony, back-taxes, or child-support.

Take myself, for example.....I have enough, in assets, (with no real liabilities at this time) to afford a more expensive car than I actually drive, but I am prudent with my cash and generally place limits on what I will spend on a new car. For one thing, you never know when you will need that cash, in the bank, for unforeseen emergencies. One of the things I do in car reviews, for example (among many other things), is to try and summarize if I think the car in question is worth what it costs.

whoster

all I know is,

you need to be making as much as rominl.

madoka

FWIW, the rule of thumb I've heard is that your annual income should be at least double the purchase price of your car.

mmarshall

High income like that could mean little or nothing if you are in debt (apart from the car, of course).....or will soon be. I tried to emphasize that in my last post.

Income also does not always mean money in the bank. Some people have relatively low income but good bank accounts because their expenses are low.....others, just the opposite.

cjf_moraga

Given the higher relative depreciation of cars in this price range, my metric is can you afford to buy it outright in cash without going into debt or impacting your other essential savings and investments? ...and if so, do you intend to keep it long enough to ride out its depreciation curve and maximize its value over the long term? (And is it high enough quality and can you afford to maintain it?)

My current car is in the $100,000 to $150,000 price range, but I would never have bought it if I could not have afforded to pay for it outright in cash. I shudder at the thought of drivers who take out huge loans plus interest, or successive leases that have to taken out every 3 or 4 years for expensive cars that depreciate quickly.

Does this make sense? Depends on where you are in life and what your priorities are. Having now hit my fifties, I take a holistic "rest of my lifespan" perspective and have learnt the discipline to be happy with what I have. I now prefer to buy the car I really want, max out its warranty, do less than 9000 miles/year, (I spend more time on my bike than in my car) and run it for 10 years or more. Just 3 or 4 cars for the rest of my life should take me to 90.. :-)

Chris

BLK13X

It'd be nice to be able to buy cars outright, which I've done on 2 occasions but as noted above people's lives change. Such is my case.

I owned 2 Soarers outright (one valued at $20000, the other at about $8000) but have since mortgaged a property and had a baby (well, my fiance did). I have recently sold one of the Soarers for a late model GS and while I could have been able to pay for it up front it's simply not possible with all the rest of the stuff I've got to pay off; a bigger car was needed though and I will NOT let go of Lexus

Itd be nice to be able to pay for cars outright again though


Oh, and big props for being to pay for a 100k~ car outright! The stealership would've looooooved you