Can I afford an M3?

[Mr. ///M3 RD]

Originally Posted by persian54

Op is one smart cookie

Roger that

[K-M3]

Originally Posted by SamS

I work in downtown Dallas. One thing you need to understand is that it is HOT AS FCUK here. I'd say Dallas is better than Houston, but not as good as Austin. Cost of living reflects that as well.

ummmm.....please dont go there ......

[SamS]

Originally Posted by K-M3

ummmm.....please dont go there ......

This coming from a guy from....Oklahoma?!?!

[K-M3]

Originally Posted by SamS

This coming from a guy from....Oklahoma?!?!

umm.... was in houston for 8 years before moving up here.......love Houston, like Dallas too.....but.....Houston's better than Dallas..... lol!!!!!!!!

[Skrawny]

11 years ago I test drove an M3. That one test drive cemented it in my brain. I used to dream about downshifting into 2nd around a corner, blipping the throttle and perfectly matching the reves and then powering out of the apex. I knew I would eventually own one, but I told myself I wouldn't until I could afford it. It took me 10 years, but I eventually got one of the first 2011 M3s off of the line. Not only am I perfectly happy, but I have a nest egg and no debts.

The fact I have savings and no debt (ok the car is financed, but at 3.35%, so it's best if I pay it off slowly), means I do not have a financial anchor pulling me down. Down the line when it becomes time to retire this car and buy another I will be able to do so easily.

Trust me. Wait.

-s

[matthewk]

Originally Posted by K-M3

umm.... was in houston for 8 years before moving up here.......love Houston, like Dallas too.....but.....Houston's better than Dallas..... lol!!!!!!!!

Houston is horrible.

[K-M3]

Originally Posted by matthewk

Houston is horrible.

why?? I liked my time there.... lots of fun, good places to eat... hang out....but to each his own I guess....where in Texas are you??

[Werkz12]

Originally Posted by Blu_Frg

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?!

If you have to ask...well

[motosan]

I'm very impressed that you just graduated during such crappy economic period and still are able to make a very decent living, considering that it's your first job.

If you are in PE or Law Firm or Consulting, I would say yeah go ahead because the hours you put in make YOU deserve that car. However, if you are in some marketing position or in sales or own your own business, I would say wait until the European debt is fully resolved and the stock market rebounded past 13,000 points.

Best alternative is, wait and save up the money for the 2013 M3 (if you want a sedan) and do a European Delivery with your savings bonus. Sounds like you are partial impulse buyer based on your short ownership of your 3 series. Getting the current M when the new one is coming out in a year or two might make you regret? Or just buy a 2-3 yrs old CPO M5 (I would never buy a used M3 when the averaged owner age is too young to take good care of the car) for about $55k and trade it in again for the next gen M3.

But good luck with your purchase!

[Blu_Frg]

Originally Posted by motosan

I'm very impressed that you just graduated during such crappy economic period and still are able to make a very decent living, considering that it's your first job.

If you are in PE or Law Firm or Consulting, I would say yeah go ahead because the hours you put in make YOU deserve that car. However, if you are in some marketing position or in sales or own your own business, I would say wait until the European debt is fully resolved and the stock market rebounded past 13,000 points.

Best alternative is, wait and save up the money for the 2013 M3 (if you want a sedan) and do a European Delivery with your savings bonus. Sounds like you are partial impulse buyer based on your short ownership of your 3 series. Getting the current M when the new one is coming out in a year or two might make you regret? Or just buy a 2-3 yrs old CPO M5 (I would never buy a used M3 when the averaged owner age is too young to take good care of the car) for about $55k and trade it in again for the next gen M3.

But good luck with your purchase!

I actually am in consulting heh. Reason I really want the e92 and now is because I don't want a 6 cylinder m3, nor do I want the sedan version. I'm sad that new production is going to stop really soon, thus fueling my sense of urgency.

Either way im at a crossroads right now and the potential move to Dallas could change my financial system for the better. we'll see what happens.

[ryan970]

dam you only fill up once a month, how?

[jmarino21]

OP,

I make about the same amount as you do, and live in Cleveland Ohio where cost of living is probably a lot less than what you would need to account for.

Barring a big raise, a brand new M3 would stretch my budget a little too thin for my comfort. However, a CPO 08-09 is very affordable on a 70k salary. Probably 20-30k less than MSRP on brand new depending on options and miles. And if you can make a reasonable down payment and/or have trade-in equity, a 700-800 per month car payment is feasible and won't hit your budget nearly as hard. Keep in mind, nobody needs an M3. It is purely a want. I want one and will have it sooner than later

There will come a time when I take ED of a brand spanking new M3 built exact how I want it and delivered to me with 0-2 miles on the odometer. But not yet. Not yet.

-JM

[gaeko]

Originally Posted by Blu_Frg

I actually am in consulting heh. Reason I really want the e92 and now is because I don't want a 6 cylinder m3, nor do I want the sedan version. I'm sad that new production is going to stop really soon, thus fueling my sense of urgency.

Either way im at a crossroads right now and the potential move to Dallas could change my financial system for the better. we'll see what happens.

Which firm do you work for?

And i'm in a very similar position and appreciate the advice in this thread. My living expenses are probably similar (live in SF) but my salary is actually a bit higher. Even still i'm uncomfortable dropping that kind of money on a car even at the age of 28. My general mindset is if I don't have that cash immediately available as liquidity, I shouldn't buy it.

[BimmerJim]

Originally Posted by Blu_Frg

No, I absolutely agree that I cannot afford a brand new M3 -- whether it be through a lease, financing, or financing select.

Is it possible to get a used e92 M3 in the $35-45K range? I'd just like to have the DCT transmission with navigation and heated seats. What kind of car am I looking at with that budget?

I doubt that you can get one in the 35-45K range with DCT. Navigation and heated seats may be possible in that range. If you want to go through with getting an M3, recommend you look through the CPO site at your nearest dealer and see what they have in the price range you want. As most of the members have stated to you, a year more of savings will definitely help your ability to get you an M3.

Good luck

[BimmerJim]

Originally Posted by SamS

This coming from a guy from....Oklahoma?!?!

Ok Sam that my home state too so you is out numbered. I will say that I like Dallas better than Austin and I am sure you know why

[taylorcoleman]

You won't know if you can afford an M3 until some future date that you are too poor or too rich to care.

If you think you'll fall into one of those two buckets permanently than buy the car now.

Else, don't buy the car.

[donovan]

Your insurance will be more
GAS will be probably close to 250+ a month
maintenance...
and you will not keep your foot out the pedal.

[DropItLow]

I was in the same boat last year. 70k a year @ 23 with very few expenses other than having fun. did the bmw select (balloon) because it fit more into my life style and made my payments $700 versus $1100 but that's not offered everywhere. I would auto-save the difference into another account (for the ballon payment at the end or emergencies) which worked out really well.

If you're confident in your job performance and are with a good company do it - you won't regret it. Debt or car payments isn't a bad thing - don't let the old timers in here tell you other wise.

One word of 'young' advice, always keep an eye out for other employment opportunities - I got a 45k a year raise (after i bought the car) by jumping ship to a bigger company. (not a typical result by any means!) Jumping ship was the hardest thing I've had to do but in the business world, you need to look out for yourself. (and don't burn your bridges!)

[onnex]

Originally Posted by DropItLow

I was in the same boat last year. 70k a year @ 23 with very few expenses other than having fun. did the bmw select (balloon) because it fit more into my life style and made my payments $700 versus $1100 but that's not offered everywhere. I would auto-save the difference into another account (for the ballon payment at the end or emergencies) which worked out really well.

If you're confident in your job performance and are with a good company do it - you won't regret it. Debt or car payments isn't a bad thing - don't let the old timers in here tell you other wise.

One word of 'young' advice, always keep an eye out for other employment opportunities - I got a 45k a year raise (after i bought the car) by jumping ship to a bigger company. (not a typical result by any means!) Jumping ship was the hardest thing I've had to do but in the business world, you need to look out for yourself. (and don't burn your bridges!)

Strikingly similar situation. Purchased with just a slightly higher salary, and since then my salary has made a substantial jump after leaving my old job. It's all about priorities and where you are in your life. If you don't have a lot of overhead/responsibilities beyond a car, I'd say go for it. Assuming you're decent at your job, owning the car will only get easier (although you could easily argue this isn't the best economic climate to purchase a car like this)

To me: life is WAY too short– do what makes you happy while you can before the equation gets more complicated.

[DropItLow]

Originally Posted by onnex

To me: life is WAY too short– do what makes you happy while you can before the equation gets more complicated.

+1 atleast if it gets complicated you had fun getting there.

More of the finance discussion because I'm bored:

One thing that no-one has really pointed out yet in this thread is that current loan rates are .9% on a e92 and estimated inflation is anywhere from 2-3% meaning you're taking BMW for the difference --> the car is technically being discounted over the life of the loan.

The same holds true for the people maxing out their 401k's. Most companies will only match a certain percentage of your salary (typically 100% on the first 3% and 50% on the next 3% which is enough to offset inflation in that year). Because those 'matched' contributions only count against the current year's income, your accrued account value is still depreciating at the rate of inflation. Assuming you are 22 and will retire at 65, your $16,500 401k contribution will be 33,000 (assuming the best case 100% match - rare!), but after the 43 years of inflation would be the equivalent to $9,160 made when you're 65. (Note that this assume no asset growth and steady linear inflation @3%) Sure this is the worst case example but isn't that just what happened in 2001 and 2007/2008 where people's retirement accounts were flat? If you're not making more on your money than inflation your account will always shrink in a real sense - of course that would be $9,160 more than you had and if you do the calculations over your life time it adds up to alot of money in a real sense.

There are two things to remember here: your money right now is worth more now than in the future and the stock/bond market is as likely to down as it goes up - so counting on 401k growth isn't something to bank on.

Debt isnt a bad thing when you put this all together. If you can, invest is physical (typically) appreciating assets like real estate (I just locked in a home loan for 4.25% this year but in a real sense I'm paying more like 1.25% on my money - plus i get to take ALL of the interest off on taxes) or commodities (gold/silver) is a better bet in the current market place given the uncertain markets and inflation. Or if you're the risky type, playing the stock market volatility to trade the market rather than invest in it. I know this paragraph is going to strike a nerve with alot of people on this forum who are forever vested in their sit-and-wait-for-the-market-to-go-up strategy but the US economy really has no room to grow, so the expectation that the US stock markets will continue to grow is a pipe dream in all aspects. Do I contribute to my company's 401k? Hell yes i do! I'd rather a total contribution of 10.5k (assuming 100k salary and a 3%/100%,3%/50% company match) than 6k (6% of salary raw) any day but putting more money into a 401k than your company will match makes no sense...

One other assumption which can be factored in if you work for a larger well established employer, is that annual raises *should* atleast track the rate of inflation if not exceed it (my raise this coming year will be between 4.5-11%, because i have locked in an interest rate it makes the relative true cost of the loan less). You’ll have a harder time with smaller organizations getting those annual raises.

[SamS]

Originally Posted by DropItLow

One thing that no-one has really pointed out yet in this thread is that current loan rates are .9% on a e92 and estimated inflation is anywhere from 2-3% meaning you're taking BMW for the difference --> the car is technically being discounted over the life of the loan.

No one has mentioned it because 0.9% is only available for 0-24 months, not a common option around here.

[DropItLow]

Originally Posted by SamS

No one has mentioned it because 0.9% is only available for 0-24 months, not a common option around here.

err good point. forgot that BMW changed their financing this month. It used to be 1.9% on 60months. There goes all my math...but the concept still applies to the 401k.