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      11-06-2011, 07:38 PM   #1
Blu_Frg
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Can I afford an M3?

Cliffnotes:
- 22-years-old; graduated this past May
- Fully employed, making good money: ~$70K
- After 401k contributions, health insurance, etc, my take home pay is ~$3200
- I rent for $900 a month, includes all utilities
- $14K in debt from financing an 04 330i zhp 6 speed (which I bought less than 3 months ago lol)
- I am confident that I can sell it back to someone for $15K or even $16K because I bought it for such a steal.
- Insurance costs me around $150 a month for the ZHP
- I fill up once a month, for around $60

So, assuming I sold off my ZHP, my monthly expenses are:

$3200 - $900 (rent) - $800 (food & entertainment) = $1,500 for a car payment, insurance, gas, and savings.

I really regret going to the dealership and test driving an M3 because now it's all I can think about. I'm addicted to the thought of owning one.

What are my options here? I'm thinking about doing the BMW Select Financing with a brand new car that's spec'ed to my liking.. or I can purchase a used one.. but I really do want the competition package. There was an AW 11 model at my dealer with 3K miles and the comp package for $65K.

In the truest sense of the word, no, I cannot 'afford' this car because I cannot pay cash for it. But I can 'afford' to make payments. Should I do it? I'm thinking that if I do do it, it'll be after winter.

I'm also toying with the idea of purchasing a condo next year. I want to take advantage of the buyer's market and historically-low mortgage rates, but at the same time, everyone in my family says I need to wait longer because the market is so uncertain. Further, one of my co-workers who purchased a house as rental income out of college says that, while she doesn't regret doing it, she would have waited a couple more years if she could do it again. So I'm not too committed to the idea of buying a condo until I'm say, maybe 25 or 26.

What do you guys think? Should I go for it?!
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      11-06-2011, 07:41 PM   #2
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Go for it I'm 22 as well and u make more then I do and I can still afford it! U wont regret it
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      11-06-2011, 07:42 PM   #3
Blu_Frg
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akhdsgkajshdgakjsgla

I want one SOOOOOOOOOO bad.. it's such an emotional decision.

But deep down inside, I know that it's not the smartest financial move.

FUUUUUUUUUUUUU
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      11-06-2011, 07:47 PM   #4
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There's a saying. If you have to think about it too hard, you cant. Wait until you can comfortably afford it with no concerns.
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      11-06-2011, 07:48 PM   #5
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How much can you afford to put down for a possible purchase? This is important, because if you happen to lose your job or something, you don't want to be upside down on the car because of depreciation.

Think long and hard about this because it could be a 5 year commitment. From your notes, you say that you will fill up once a month which means you won't be driving it that much. Does it make sense to have a 65k+ depreciating asset sitting in the garage?

If I were you, I would not make this purchase at this point in my life, but this is my personal choice. I would not buy a car that I could not pay cash for.

Good luck to you!
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      11-06-2011, 07:50 PM   #6
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I wouldn't do it. This is a large purchase and it's eating up a huge portion of your remaining income. You still need money to live your life and go out and ave fun with. On top of that, it's good to wait for ideal conditions to purchase a condo, but with this big a load, you're not going to be making any significant savings. Are you going to have the 20% down that banks want on a mortgage these days?

If things are this tight you cannot "afford" this car. Sure, you can make the monthly payment, but look how much opportunity you have to give up for it. Too much, in my opinion. If I were in the same shoes I'd enjoy that 330i or maybe consider a bump to the 335i, but the M3 is too much of a financial stretch given your current situation and near future goals.
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      11-06-2011, 07:50 PM   #7
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Bad damn decision. Save six months salary and keep your eyes open in this crappy economy. Save the M3 purchases when you are more established. Or just go deeply into debt and revel in your precarious financial situation. Everyone else in America does.
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      11-06-2011, 07:51 PM   #8
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You're gonna need to budget more than $60/month for gas. That's not even a full tank

How much can you put down? Did you get an exact cost for insurance? Because I bet that would be $200+/month, given your age.
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      11-06-2011, 07:53 PM   #9
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It's ultimately up to you, but my advice is hold on to your money, and put it towards an appreciating asset, or invest it wisely. Do this, and by the time you're in yourr 30s, you'll be driving all the M3s you want, along with P-car and the like.

Buying a used one at $40K might not be a bad idea, but even then, I'd say it's a stretch. Your monthly budget isn't really taking into account any investment that will yield much for you in the short or near term, and you certainly haven't planned for any emergencies, or opportunities that may pop up that you'd want to take advantage of.

A condo isn't a bad idea, but if you can get a detached single family home for a bit more in a decent area, that might be the best investment for a starter home as well. Condos typically appreciate and depreciate faster than single family homes, so they are riskier to some extent. But they are cost effective, so long as CAM charges aren't too high. But aside from a few real estate purchases, I'm not expert. Check the off-topic forum here for better advice in that sense.

My general advice is that because you can, or think you can, doesn't mean it's the most wise thing to do. Without a high priced car, you can take greater risks right now without any realy maor consquences, and done right, will set you up for living it up in your 30s and beyond.

Lastly, I saw no mention of a GF or a wife. I recall an episode of the Cosby Show of all things where Theo was tellign his dad how he had enough money to spend on this and that every month. His dad then asked him if he planned on having a GF, and he said "of course!" And his dad took away the rest of the cash he thought he'd have on-hand every month.
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      11-06-2011, 07:54 PM   #10
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Yeah, I'm positive I'll be filling up at least 2-3 times a month with an M3. I really don't drive all that much. I'm guessing insurance will be like $200-$250.

Also, if I do get a condo and need to put a downpayment, I think my parents would float me the downpayment because my dad was the one who suggested I buy a condo out of college because he did so and flipped it for a good chunk of profit (granted, this was 30+ years ago when the market was DRASTICALLY different; regardless, right now is a prime time to buy real estate). My mom and sister disagree with my buying a condo, but my dad supports it.
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      11-06-2011, 07:55 PM   #11
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if you're even asking this question then most likely you can't. as one said, $60 on gas is not happening lol. maybe consider a used M3? good luck though
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      11-06-2011, 07:57 PM   #12
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Quote:
Originally Posted by Blu_Frg View Post
Cliffnotes:
- 22-years-old; graduated this past May
- Fully employed, making good money: ~$70K
- After 401k contributions, health insurance, etc, my take home pay is ~$3200
- I rent for $900 a month, includes all utilities
- $14K in debt from financing an 04 330i zhp 6 speed (which I bought less than 3 months ago lol)
- I am confident that I can sell it back to someone for $15K or even $16K because I bought it for such a steal.
- Insurance costs me around $150 a month for the ZHP
- I fill up once a month, for around $60

So, assuming I sold off my ZHP, my monthly expenses are:

$3200 - $900 (rent) - $800 (food & entertainment) = $1,500 for a car payment, insurance, gas, and savings.

I really regret going to the dealership and test driving an M3 because now it's all I can think about. I'm addicted to the thought of owning one.

What are my options here? I'm thinking about doing the BMW Select Financing with a brand new car that's spec'ed to my liking.. or I can purchase a used one.. but I really do want the competition package. There was an AW 11 model at my dealer with 3K miles and the comp package for $65K.

In the truest sense of the word, no, I cannot 'afford' this car because I cannot pay cash for it. But I can 'afford' to make payments. Should I do it? I'm thinking that if I do do it, it'll be after winter.

I'm also toying with the idea of purchasing a condo next year. I want to take advantage of the buyer's market and historically-low mortgage rates, but at the same time, everyone in my family says I need to wait longer because the market is so uncertain. Further, one of my co-workers who purchased a house as rental income out of college says that, while she doesn't regret doing it, she would have waited a couple more years if she could do it again. So I'm not too committed to the idea of buying a condo until I'm say, maybe 25 or 26.

What do you guys think? Should I go for it?!
NO!

Many Americans lived so close to the edge, that when trouble came, they fell off and 'lost everything'.

Want to be car rich and cash (house, savings, etc) poor? Then wiggle your way into it. At least you will look like you have $ to the chicas, as you take them to Burger King & ask them to pay for their meal. $70k may be decent $ for your age, is certainly a lot to someone who is in the unemployment line, but it isn't really "good money".

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      11-06-2011, 07:59 PM   #13
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If you buy an M3, you will fill up more than once a month.

I'd hold on to the 330 until well past its paid off. CPO E9X M3's will probably be pretty reasonable once the next gen M3 is released.
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      11-06-2011, 07:59 PM   #14
Blu_Frg
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Have all you guys purchased your M3s with cash? I thought a lot of people on this board were leasing/financing their M3s and only a select few were wealthy enough to truly afford to pay cash for this car.
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      11-06-2011, 08:02 PM   #15
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Quote:
Originally Posted by Blu_Frg View Post
Have all you guys purchased your M3s with cash? I thought a lot of people on this board were leasing/financing their M3s and only a select few were wealthy enough to truly afford to pay cash for this car.
Vulvodynia detected.
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      11-06-2011, 08:03 PM   #16
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Quote:
Originally Posted by Blu_Frg View Post
Yeah, I'm positive I'll be filling up at least 2-3 times a month with an M3. I really don't drive all that much. I'm guessing insurance will be like $200-$250.

Also, if I do get a condo and need to put a downpayment, I think my parents would float me the downpayment because my dad was the one who suggested I buy a condo out of college because he did so and flipped it for a good chunk of profit (granted, this was 30+ years ago when the market was DRASTICALLY different; regardless, right now is a prime time to buy real estate). My mom and sister disagree with my buying a condo, but my dad supports it.
Financing a house or condo is much more complex than that. Don't assume a lender will allow for money from your parents to be used towards a down payment to qualify you for a loan.

To make a long story short, it can be pretty tough to qualify for a home loan, with a good rate. Lenders learned their lessons. If a condo is a top priority, save a ton of cash, and keep your credit score >750.
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      11-06-2011, 08:06 PM   #17
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Quote:
Originally Posted by gblansten View Post
Vulvodynia detected.
Not sure what this means..

Quote:
Originally Posted by SamS View Post
Financing a house or condo is much more complex than that. Don't assume a lender will allow for money from your parents to be used towards a down payment to qualify you for a loan.

To make a long story short, it can be pretty tough to qualify for a home loan, with a good rate. Lenders learned their lessons. If a condo is a top priority, save a ton of cash, and keep your credit score >750.
Yeah.. I have excellent credit as it is (>750). Years of credit history. Zero late payments. Zero CC debt. Zero student loans.
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      11-06-2011, 08:06 PM   #18
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Quote:
Originally Posted by Blu_Frg View Post
Have all you guys purchased your M3s with cash? I thought a lot of people on this board were leasing/financing their M3s and only a select few were wealthy enough to truly afford to pay cash for this car.
Cash here, but I'm sure any who chose to lease/finance were bringing in far more than $3200/month. Spending 1/4 to 1/3 of your net income on a car payment is just silly! Recent events have shown that this can be a bad strategy for home purchases as well. Lose your 'good paying job', miss a payment or two, and ..........
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      11-06-2011, 08:07 PM   #19
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^ Most people lease or finance.

Would be interesting to find out what the average salary of folks around here is.
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      11-06-2011, 08:10 PM   #20
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Quote:
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Yeah.. I have excellent credit as it is (>750). Years of credit history. Zero late payments. Zero CC debt. Zero student loans.
Don't forget the "save a ton of cash" part . I'm talking about enough to buy a used/new M3, outright.
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      11-06-2011, 08:11 PM   #21
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Don't forget the "save a ton of cash" part . I'm talking about enough to buy a used/new M3, outright.
I know I know..!!

Damn you old(er) people with financial wisdom.

Thanks for talking me out of my dream.. ASSHOLES! lol jk.
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      11-06-2011, 08:15 PM   #22
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Quote:
Originally Posted by Blu_Frg View Post
I know I know..!!

Damn you old(er) people with financial wisdom.

Thanks for talking me out of my dream.. ASSHOLES! lol jk.
Nothing wrong with dreamin' big. Maybe use this as an opportunity to set some more realistic goals, i.e. save $15K+ over the next 18 months to put towards a used 2011 M3.
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