Financial Opinions Needed - Financing a Car

[Kielan]

Delete.

[bosstones]

Generally, you're still in college and have $x in student debt with at least another full year (senior) to go for your undergrad degree. What is your desire for a BMW? How much credit card debt do you have? Are you responsible for paying your student loans back later?

I'm assuming you have some credit card debt since most college kids do. Likewise, I'm going to assume that you're paying your student loans back. $25/hr isn't that much. Even assuming that your parents float you spending money and such, your internship money + your current job doesn't get you too far and you'd be basically working for your car and tuition. You mention modding the 135i so how much additional discretionary income do you have or do you rely on your parents for?

I'd say either suck it up and keep the E46 or get rid of it and downgrade. You're in college. Instant gratification in the short term isn't going to help you get ahead once your out of school. Decide now how much debt you want to start your adult life with. Depending on your degree and such, the way the economy has been going, things may not be as easy as you hope upon graduation.

[amanda hor$t]

the m3 was my first real purchase (didn't have a job in college). saved up and paid it off ahead of schedule. of course everyone thought it was a splurge. now it saves me money (already have 1 garage queen, no space for a ferrari lol)

i think it's worth it if it's a car you really want and you're planning to drive it for a long time. man needs a good horse.

[Kielan]

delete

[bosstones]

Originally Posted by Kielan

No credit card, so no debt there to be worrying about.

The modding thing was more of an after thought (for after graduation, I'm not a full retard haha).

I have a job secured for when I graduate as well, whether or not I take it or go for other firms potential offers is a different story. But making money after school is not a huge worry of mine. I'm an information science and technology major, I shouldn't have to worry much about getting a job.

As far as my student loans, half of it is on me.


For sure, this is what I think I'd be able to do, but of course I can't plan to for everything to go to plan.

Good for you w/ having no credit card debt! I graduated with $0 in cc debt and was glad I did so. Your statement about not planning for everything to go to plan is a good one. It's good if you have something lined up right now but if it's not in writing, I wouldn't bank on it. You're over a year away from graduating. Perhaps a bit of a conservative/cautious approach, but I'm not one to bank on certain things. I had some friends w/ BSEE and computer science degrees that had problems getting jobs out of school in a 'challenging economy'. All had good GPAs and were personable people (by normal standards...not by engineering standards. lol) Nothing is guaranteed. I'd still say keep the E46 or downgrade. You still need to decide how much debt you want to start your professional life with. While in college, why add $ to the equation of crap to worry about. Keep it simple, bank some the cash you're making, have some fun w/ some of it, and enjoy college life. Whether or not you require a BMW to do that...is your call. If you really want a warranty, why not look into an aftermarket warranty as a 3rd option?

[///Mandy]

Originally Posted by Kielan

So here is the deal. I'm currently trying to sell my E46, in efforts to get into a 135i.

I'm a junior in college, have student loans, and have a job where I make like 300/month. During the summer months I have an internship that pays 25/hr, I know I have the money to cover monthly payments in the mean time in which I am not working my internship, and support the payments for my last year of school.

The loan would be for about 22k, and my parents would be taking out the loan, but it's on me to pay it each month, etc. The only reason for going through my parents is so that the car is in their name, to keep insurance costs down. I wanted to get a 5 year loan, which would put my payments (if I didn't put any money down) at ~450/month. I'd use the money from selling my car, right now to cover fees and taxes, and the first 2-3 months of payments as well.

I've heard both sides of this argument, the "don't do it while you're still in school" and the "if you can support the payments, why not." I'm just curious as to what you guys, especially those of you in school have to say about it. Like I said I am a junior, and the soonest I would be getting a 1er would be after January, buying used of course, 08-09 model.

The reason I'm not keeping my E46, is because to this point I have 6k into it in maintenance, and it's still draining my pocket, I just can't keep supporting it, I'd rather keep spending the same money on a car with a warranty, and one that is much more fun to drive/mod than what I have now. While I know I'll be ultimately taking a hit on the car when it comes time to sell, it seems to me, at least in my head to be worth it.

I'm interested to see what you guys all say.

No...

Sell your E46 if the maintenance is draining your pocket and lease a Civic until you are done school...or borrow your parent's car.
It seems, from reading your OP, you are not financially stable yet (?)....will financing the 135i still allow extra money for you to have on the side for savings? Groceries? Bills?

[gatorfast]

Dont do it man. Im surprised your parents are going along with this. You are still in school and have the rest of your life to drive a nice new BMW once you graduate and start making enough money to support yourself.

[passing]

Originally Posted by gatorfast

Dont do it man. Im surprised your parents are going along with this. You are still in school and have the rest of your life to drive a nice new BMW once you graduate and start making enough money to support yourself.

get one of those 50cc scooters. thats what i rode around in college.

[lcrain]

Sounds like a bad idea to me. I don't think you can count on your 300/month job and the internship to cover the costs associated with a loan and keeping up with the 135, not to mention your student debt and the costs of being a student. Yes, it is a newer car, but still out of warranty and the N54 isn't exactly the model of reliability. Selling one used BMW and buying another used BMW to save money on upkeep doesn't really make sense to me. Especially when all the money you make for the next year and a half or so is going to be used to pay for the second car.

What happens when the new car has some issues? Sounds like your parents can help you if you are in a bind, but that doesn't show them that you are being responsible. If I am you I either keep the e46 and continue to maintain it (sounds like with 6k in recent work it should be in perfect condition) or buy yourself something more reliable that will not require as much maintenance.

I would not have wanted to worry about a loan through my parents for a new BMW when I was in college.

[Kielan]

Originally Posted by ///Mandy

No...

Sell your E46 if the maintenance is draining your pocket and lease a Civic until you are done school...or borrow your parent's car.
It seems, from reading your OP, you are not financially stable yet (?)....will financing the 135i still allow extra money for you to have on the side for savings? Groceries? Bills?

Originally Posted by lcrain

Sounds like a bad idea to me. I don't think you can count on your 300/month job and the internship to cover the costs associated with a loan and keeping up with the 135, not to mention your student debt and the costs of being a student. Yes, it is a newer car, but still out of warranty and the N54 isn't exactly the model of reliability. Selling one used BMW and buying another used BMW to save money on upkeep doesn't really make sense to me. Especially when all the money you make for the next year and a half or so is going to be used to pay for the second car.

What happens when the new car has some issues? Sounds like your parents can help you if you are in a bind, but that doesn't show them that you are being responsible. If I am you I either keep the e46 and continue to maintain it (sounds like with 6k in recent work it should be in perfect condition) or buy yourself something more reliable that will not require as much maintenance.

I would not have wanted to worry about a loan through my parents for a new BMW when I was in college.

Right on.

As far as maintenance costs are concerned I honestly wasn't concerned with it at all.

The 300/month + internship is guaranteed money. I'm a sales rep for Fortune Auto/Broadway Static suspension, get commission through that and money for photos on the side. Of course it's not guaranteed so I don't bank on it, some months are great and I clear 2k, others not so much and I make nothing. It really depends. However I do definitely understand and respect what you guys are saying.


As for my E46 being in near perfect driving condition. I lol'd, this thing is the most annoying thing ever.
I did:
Clutch
Intake Manifold gasket
All new vacuum lines
Fuel pump
Fuel filter
Mass Air Flow Sensor
Lower Control Arm Bushings
Trans fluid changed
Shifter bushing
Transmission mounts
Valve Cover Gasket

This past August, and it still needs a lot more.

[ddk632]

I'll add my $0.02

I had a 2001 E46 325Ci, loved that car to pieces. It was a money pit though. I purchased cash in 2006 with around 32k miles on the odometer. Drove it until I had about 69k, from 2006 through 2010, just over 4 years or so, before I sold it for just over half of what I paid.

I averaged out the cost of the car, minus what I sold it for, plus all the maintenance and repairs - even with a 3rd party warranty which I did have and in my experience is not anything close to a factory warranty - and realized I could have been leasing a brand new 3 series for the same money in that time period. Although I did customize the hell out of that car.

Therefore I understand your reason for wanting to sell. Those that are saying to keep it, you need to calculate true cost of ownership against the cost of financing a newer car. I would say, in fact, rather than finance a used 135i thats out of warranty or close to it, look into leasing a new 135i instead. Make mods that can be un-modded and sold later. Also there is no rule that says you can't sell a leased car - I did this with my X6.

As for your income and expenses and parents helping - that's all your business. From a purely financial perspective, it makes more sense to lease or buy (if you plan to keep longer than 6 years or so and like to mod your cars) new than deal with out of warranty repairs on a German car. If it was a Toyota, it would be a different story. That's been my experience.

I leased an X6 after I sold my 325Ci due to family needs - had a wife and a kid, so an SLK and an E46 325Ci weren't really cutting it anymore

Honestly, now I just lease all of my cars and don't worry about maintenance, ever. Always under warranty, free BMW service - in the case of Benz I prepay the service or roll it into the lease, so it's the same thing - I never worry about my cars anymore. Now I have 2 kids and a business, so for me not worrying about my cars has become more important than personalizing them.

[S_M]

Put the numbers on paper and it will make more sense. Please don't take offense to any of this, I'm just a realist.

You have income of $3600 a year plus your internship. I have no idea what your internship nets you but say you bring home $10000 for both jobs after all is said and done.

If you're car payment is $450 a month, you're spending $5400 a year on just payments. Then you have to insure it ($1000+), and put fuel in it ($1000+). You're now spending 75%+ of your income for this car, and those are conservate figures as I'm sure you're insurace will be higher (assuming under 25, 300hp $30-40k car). You have $2500 left to eat, pay off student loans, spend on discretionary items, etc... Even if you're bringing home twice as much, you're still spending way too much of your income on the car.

It doesn't add up. This is basically a case study of why so many Americans are in debt. Go lease a Honda Civic for $100 a month to get you through college. You'll have a warranty, a safe reliable car, and money to live. You can always buy the BMW when you get out of school and get a good job.

[josephr25]

Originally Posted by smohr33

Put the numbers on paper and it will make more sense. Please don't take offense to any of this, I'm just a realist.

You have income of $3600 a year plus your internship. I have no idea what your internship nets you but say you bring home $10000 for both jobs after all is said and done.

If you're car payment is $450 a month, you're spending $5400 a year on just payments. Then you have to insure it ($1000+), and put fuel in it ($1000+). You're now spending 75%+ of your income for this car, and those are conservate figures as I'm sure you're insurace will be higher (assuming under 25, 300hp $30-40k car). You have $2500 left to eat, pay off student loans, spend on discretionary items, etc... Even if you're bringing home twice as much, you're still spending way too much of your income on the car.

It doesn't add up. This is basically a case study of why so many Americans are in debt. Go lease a Honda Civic for $100 a month to get you through college. You'll have a warranty, a safe reliable car, and money to live. You can always buy the BMW when you get out of school and get a good job.

I agree. If you have to get a different car, get a new, cheap car with warranty.

[passing]

you need a new mechanic if you spent 6k on regular (extended) maintenance items.

[Comet]

Originally Posted by smohr33

Put the numbers on paper and it will make more sense. Please don't take offense to any of this, I'm just a realist.

You have income of $3600 a year plus your internship. I have no idea what your internship nets you but say you bring home $10000 for both jobs after all is said and done.

If you're car payment is $450 a month, you're spending $5400 a year on just payments. Then you have to insure it ($1000+), and put fuel in it ($1000+). You're now spending 75%+ of your income for this car, and those are conservate figures as I'm sure you're insurace will be higher (assuming under 25, 300hp $30-40k car). You have $2500 left to eat, pay off student loans, spend on discretionary items, etc... Even if you're bringing home twice as much, you're still spending way too much of your income on the car.

It doesn't add up. This is basically a case study of why so many Americans are in debt. Go lease a Honda Civic for $100 a month to get you through college. You'll have a warranty, a safe reliable car, and money to live. You can always buy the BMW when you get out of school and get a good job.

This.
OP, you remind me of that picture of the supercar parked in front of a shack.
Priorities messed?

You're young, you don't need a BMW considering you cannot afford it.

The rule of thumb for luxury items (if you want to be financially responsible) is buy it only if you can afford it three times over.

[josephr25]

Originally Posted by Comet

This.
OP, you remind me of that picture of the supercar parked in front of a shack.
Priorities messed?

You're young, you don't need a BMW considering you cannot afford it.

The rule of thumb for luxury items (if you want to be financially responsible) is buy it only if you can afford it three times over.

Never heard of that last bit but good advice.

[MrRoboto]

As others have said, you cant afford it. Another reason why American and Canadian individual debt is out of control. This 'sense of entitlement' has to stop. Shame on your parents for encouraging this behaviour.

Sell your existing car and buy a good used Honda or something. Don't overburden yourself with financial responsibilities at this point in your life. Take the little money you make and have a good time.

BMW isn't going anywhere, it will be much more satisfying when you can safely afford one on your own.

[Uber V8]

DEW IT. (starsky and hutch voice)


but really don't, it sounds like you won't have any money left over to enjoy life.

[TMNT]

It's not a smart move for all of the reasons mentioned so far.

You got a couple years left, so wait it out. IF you feel you really have to have a newer car, get something cheap. Hyundai Elantra's are awesome. Cheap to buy, cheap to maintain, and really cheap to fill up. I have one now as a DD and plan on buying a Porsche within the next week or so as a weekend car.

Just get a car that will get you through the last years of college. Once you get that cool new job that pays well after college, then go ahead and splurge a little and get a better car than a 135i. But now isn't the time to do it.

[slowturbo]

I understand wanting to spend a disproportionate amount of money on a car at a young age. Although it may not be the wisest financial decision, i think it is fair to say that many of us have been there. I think the biggest factor in all of this is the student loans in addition to the car loan. You are burdening yourself with debt that continues to accrue interest while you are in school. Youd be better off paying off those student loans or taking fewer going forward, as it will save you a lot of money down the line.

[persian54]

a 08-09 won't have warranty for much longer, if any (08s should be out of warranty as it's 2012 now)

N54 maintenance is going to be higher than an e46

Originally Posted by smohr33

Put the numbers on paper and it will make more sense. Please don't take offense to any of this, I'm just a realist.

You have income of $3600 a year plus your internship. I have no idea what your internship nets you but say you bring home $10000 for both jobs after all is said and done.

If you're car payment is $450 a month, you're spending $5400 a year on just payments. Then you have to insure it ($1000+), and put fuel in it ($1000+). You're now spending 75%+ of your income for this car, and those are conservate figures as I'm sure you're insurace will be higher (assuming under 25, 300hp $30-40k car). You have $2500 left to eat, pay off student loans, spend on discretionary items, etc... Even if you're bringing home twice as much, you're still spending way too much of your income on the car.

It doesn't add up. This is basically a case study of why so many Americans are in debt. Go lease a Honda Civic for $100 a month to get you through college. You'll have a warranty, a safe reliable car, and money to live. You can always buy the BMW when you get out of school and get a good job.

While I agree with everything you said... where the hell can you get a civic for $100/month?


When I first read it, i thought the op said he was making 300/WEEK, and i thought "ehhhh not enough but if he really wants it.." then i read that it was per MONTH
No way .

For 450/month.... if you're making 1200/month...not enough but... if you cut out other stuff it's doable... barely. but you should be at 2k-2500 minimum if you're going to spend 450/month on just payments. and I'm speaking as someone who had a luxury car in college (C230, though lease payments were under 400/month).

Don't do it.

[S_M]

Originally Posted by persian54

While I agree with everything you said... where the hell can you get a civic for $100/month?

It's possible. A friend of mine pays $98 a month +tax, 0 down, 12/36. Every once in a while they offer crazy deals.