Sounds about right with rise in interest rates. I got 6.75% with Lexus Financial, but 4.75 for 60 months at a local CU. 5.25 for 72 months. I hopefully get a chance to refinance after a year or two. Rates have gone up I think maybe 75-100 bps since then, not to mention the banking 'crisis' we had so your rates seem right.. My credit score was around 750 but I'm a younger guy with a thinner credit profile.

I doubt rates go down anytime soon, but car prices will probably go down. Winter is coming but it's always hard to time the market.

 

Alright enough messing around everyone. Let's get right down to it, TT.

What's your monthly take home pay?
What are your monthly expenses?
Do you have any other debt currently?
What's your net worth?
What would the new monthly car payment be?
Would you be able to sleep at night being $30k in debt?

 

You first!

 

If you are able to use USAA i found their rates to be the best (granted i didn't check everyone just a few places). What was advertised online is what i was able to get.
https://www.usaa.com/inet/wc/bank-loan-auto-main

it was funny the Lexus dealer was like we will match your rate, i told them the number i got from USAA and they go oh no we can't do that. Made me feel very good about going with USAA.

 

Not sure what you're responding to here. I don't see where anyone is prying or giving too much information.

edit: Never mind, I see the TT now. Continue.

 

Unfortunately I can’t do USAA
Not a bad rate given today’s rates. That’s for sure. But seeing a rate that is more than double what I have now gives me an aneurysm.

 

My point is everyone's talking hypotheticals and basing their opinions on feelings. You can argue a car is an emotional purchase but TT seems like a shrewd guy and asked for our advice. If he wants the best answer he should answer the questions I asked. To himself of course. It won't necessarily rule out the car. A true look at his finances will help him.

 

Yeah interest rates sting these days. In the past 3 years we paid off our 2017 Honda Accord (0.9% for 60), bought a Hyundai Palisade (2.9% for 60) and the whole nation was locking mortgages in the low/mid 2’s. I couldn’t find an IS500 at all in 21 or 22. So finding one in 2023 at these interest rates is a kick between the legs.

I didn’t bother applying for financing at the dealer. I utilized our local credit union and secured a 5.25% last month. 840+ credit score, flawless history. I wasn’t happy about it but I bit the bullet. It
took me a long time to locate a match for my car, and emotions won in the battle against my own common sense. If an opportunity presents I’ll look to refi but I don’t see rates coming down for some time and by then it likely won’t make sense to do so.

 

Well to be fair, the thread and the question itself was more about interest rates lol. Considering I paid off a $56,000 car in a year and a half, and my salary nearly doubled since then, I know I *could* afford the car. My problem is justifying to myself that I want to let a bank and an extra 2 cylinders bend me over and go to town on my buttox lol. I didn’t become financially responsible by spending money ***** Nilly which is why I’m seriously questioning the purchase

 

I think it sounds like a good place to be in. Salary doubling is huge, congrats! I know the feeling. Mine more than quadrupled after grad school.

If the monthly payment and whatever cash you put down doesn’t change your mental health, as in it doesn’t keep you up at night whether you’ll be able to pay your other bills, then you’re in good shape and you should do what makes you happy. If having extra cash flow to invest or just save makes you happy then skip the IS500. However the nice thing about this car is it won’t depreciate like a rock so even if you bought it and decide later you made the wrong choice you won’t lose much in the grand scheme.

 

^^ I told him the same thing with respect to your last line.

I have said many times that the 500 is really the 350 DHP with more HP - You are paying for extra performance but it all depends on whether you feel it is important to you. For me, it was a no brainer once Lexus announced this car because I was within 4 years of retirement and I always wanted to own my car before I retired, I always a RWD toy and in Canada, Lexus only offered the 4 cylinder IS in RWD before the IS came out (well with the exception of the RC F/LC 500) which I didn't really want to own. This car is perfect for me, owning a piece of Lexus' hay days before everything goes hybrid/electric in a package that I think looks stunning. Cars are all about emotions and once has to decide whether the emotions is worth the cost but we also need to balance our priorities (buying a home, starting a family etc). I am at a stage where I haven't had a mortgage since 2007, have no kids, have a great job and such so the differential in getting the 500 was a no brainer to me.

Just know that we all understand the conundrum that you are in, and we are all rooting for you and we'll support whatever decision you make - You can always buy a 2024 or possibly a 2025 (if they extend it until then) if that will give you a bit of breathing room and give you more time to save so that you can pluck the cash without having to financing the difference. If you then decide that you don't want it, then you'll be able to use the money to put on the mortgage

I am really thinking I should buy a house in Florida, have you live in it so that you can do the maintenance and look after it and then I'll just crash there from mid December to the end of March - That would solve your mortgage issue (lol)

 

Maybe you can be first in line for whatever special colors they offer on the last year model. I know they might not do anything, but we all like to dream.

 

I follow rates (mortgage, auto, CD/HYSA, etc.) weekly, sometimes daily when it's a Fed meeting week. As others have said we are in a completely different rate environment right now. When I got my M3 I got 1.74%/60months from my local CU, wife got a 2.49% from Mercedes Financial in 2020 right before the pandemic. I have an 828 credit score and the best Lexus Financial could do was a 6%/48 months and 6.25% for 60 months. I always choose 60 or 66 month terms just to have leeway in case life goes awry. The BEST I was able to get from a local CU was 5% flat for 60 months which I took but will probably pay off early a year or two into the loan. Don't get upside down or overleverage just to get the car, it's just a car. Financial and Mental health and well-being are way more important. That said, if you can make it work, the V8 is just amazing....

 

I appreciate the support bud. We'll see what Lexus does for the 24MY and 25MY and then I'll make a call then. Hopefully they do something special for the final year, but then again, this is Lexus. They charged an extra $4000 for an exclusive paint color and then made it free the next year on the RC350 and IS350. But hey, I'll gladly take you up on the house offer. If you'd like I can also give your car some tender love during the winter months
I definitely wouldn't be upside down, but getting the 500 would delay some of my other life goals so it's definitely a lot to balance. My boss who races in the Trans Am series and has a 1 of 50 Shelby FP350S, suggested I just start saving money and occasionally take my 350 to a track day, so it's likely the route I will take.

 

I don't know you, but I think your boss is right on this one. Changing from the 350 to the 500 is not a big enough leap to justify the opportunity costs. Given your age, you should probably focus on how you can generate more $$$ during the next decade, by developing streams of income that will continue to grow as you age. Some people get more education and upgrade their career path, some people buy rental properties, a combo, etc. Then, after you've got your finances running like a Swiss watch you can make a real leap. That was my route, and it paid off bigly. I sacrificed until I was 40 (living in a cheap rental, driving a Honda, wearing stuff my wife would buy at TJMaxx and Marshalls, on sale) and probably focused too much on work, but by doing that I was eventually able to buy a nice house once the market crashed in 2009, and a McLaren. The McLaren effect was surprising to me. Of course I loved driving it, but I didn't anticipate the effect it would have on others. I would take prospective clients out in it, and let them drive it if they wanted. Even the non-gearheads and the women were just blown away. That car paid for itself many times over just from the contracts I snagged by closing with the McLaren. Just food for thought. Go big, but not until you're well able.