Downtown - my financial situation is very similar to yours, minus the 3 kids.

Buying my G was an easy decision. My previous car was over 6 years old, had almost 140K miles, and was "due" for something major to go wrong with it. Donated it to charity and swung $2800 on the federal tax return in my favor (dealership offered $1500 trade-in).

I needed a new car. Any decent new or used car will cost at least 10K to 20K. The G costed roughly $35K. Not a huge difference, and I'll enjoy it much more than a Honda Accord. I financed for 3 years at 1.9% -- not because I didn't have the cash, but because the 30K is better put in investments for that same 3 years, and I'll surely make more than 1.9%.

With that said, just buy the damn thing. You only live once.

 

Hear Hear!

...And that is why I am leasing my car. I have no desire to drive a vehicle for 10 years, nor do I have any desire to own [this] vehicle for any reason other than to drive it and use it, and when I'm done - move on. Given that, I'm not paying $30K for a car; I'm 'renting' one for $14.65 a day (plus the cost of insurance and gas etc.

I use it, I pay. I want to use a nicer one, I pay more. I want to use a crappy one, I pay less. Any way you cut it, you have to pay to drive a vehicle unless someone gives you one for free. And I'm supporting the American economy by providing them at the end of 3.5 years with a good quality used car. I'm making an affordable car available for someone who wants it, I'm keeping the used car salesman in business and feeding his children, I'm supporting the new car industry by giving them repeat business and getting a new car.

New car... new car... What are we talking about again?

 

Excellent point! Someone brighter than me (I believe it was Carnegie) basically said "... buy things that appreciate, lease things that depreciate...".

IMHO (and his), minimizing your cash outlay and your payments on a depreciating asset (virtually all cars, and certainly any car that is a "driver") is a great way to go.


Tony

 

Different strokes for different folks - that's the beauty of choice. Some of us (self included) buy cars and drive them for 7-10 years to justify the cost/depreciation factor, others lease every 3 years for the exact same reason. DT, you've got your financial house in order, so if you've got money left over to upgrade the 11 year old Honda, then by all means, you only live once.

I do also scratch my head at how many new cars are out there, but that's not my problem - G35 drivers aren't as worried about keeping up with the Jones', otherwise we'd all be leasing 325s, am I right? Just take it easy on the name calling, especially when you don't know who you're talking to. - Moron

 

That makes great sense if you buy every 3-4 years.

I guarantee that my total cash outlay (net including depreciation, maintenance, etc) on my $23k used G over 6 years (two 3-year leases) will be SIGNIFICANTLY less than yours.

You got a new car during that time. I didn't. Although I would love a new car every 3 years, I am not willing to spend the extra cash that would be required.

"To each his own" quoting someone else smarter than me

 

Sorry Tony, I see I was assuming too much. Downtown HAS the money he just needs help in the mental justification for the expense. To be honest I know where the guy is coming from, I play mental tricks to justify stuff to myself all the time, hence my "estate" comment. My post was helping him reconcile spending more than he "normally" would on a toy, his car. Not a "loaves and fishes", money from nothing financial scheme.

 

I agree that your total cash outlay will be less than mine, but not by as much as you might think. My 15K/yr lease on a G35X costs me about $4000/yr, or
$24K for 6 years. You'll be ahead by the value of your 8 yr old car, minus the repairs you've had to do. I'll always be driving a car under warranty, and 3yrs old or newer. As you say, different strokes...

My main point was that apples to apples (new car to new car), leasing isn't the expensive, "for suckers only" deal that many think (and I used to think) it is. Manufacturers now provide many incentives on the leasing side to get an inventory of used cars, and it often is a good way to go.

My plan is for the G35x to be a relatively inexpensive daily driver, to complement a toy car. That toy car is one that I'll buy and hang on to as I mod it to keep it interesting. There, I'll certainly buy something a couple years old and let someone else take the big depreciation hit, just as you did.


Tony

 

I call "Bull Sheet" on this. So you put nothing down and pay $333.33 per month including taxes? For 15k miles on a G35x? You have no disposition fees either?

You must have bought an Accord but they told you it was a G35x! hehe

I will pay for repairs, but you we will both pay for consumables. (oil, filters, 30k services, tires, brakes above 36k miles, etc...) You will have some other costs too.

I agree with you completely in most cases. I have leased several cars but my needs and financial position were a little different then. Leasing can be a good deal under the right circumstances.

 

I didn't think it would generate so much feedback.

I know I can get "financial advice" from financial advisors, but they are also bias to saving and not spending. I wanted to get your perspectives. You've all been very helpful!

Thanks again. By the way, I'm more interested in the G as a driver, the TL (talks more to my practical side, and my wife's taste). I'm leaning toward the G.

 

Interesting thread.

I'll throw my hat into the ring and say that my family's financial situation is analagous to yours as well, Downtown. My wife and I are in our mid-30s and both work. We have a little more cash available, but still owe 85 percent on our modest 1650-square-foot house and have no other debts except for about $6K on my wife's car. We just had our first child in February, and I bought the G35 in March. People looked at me crosswise when I did that so soon after my daughter was born, but the timing was right so we pulled the trigger. I'm glad we did. We both love the car.

One factor that no one has mentioned yet in buying a $35K car is job security. I work for a local municipal government and make substantially less at my job than I would working the same position in the private sector. But security and a good retirement plan are paramount to me and my family, so I forego the money so I can wake up every day knowing that my job will be there and that I can collect a good state retirement on top of whatever Social Security may or may not have for me. My older brother makes double what I do in the same line of work, but he's been laid off twice in the last five years and his current gig looks iffy.

If I didn't feel secure in my job, there's no way I would've plopped down so much money for a car. I could've dropped $15K less on a Sonata or Optima and ended up with the same basic car minus the style, reliability and fun. But I'm lucky that right now the G35 fit into our financial plan.

Downtown, if you're comfortable with your job, have modest debt, can continue to invest and save for your future and you've got a high-five or six-figure bank account as a backup, it sounds to me like you can afford a G35. Good luck!

 

my first car after graduation was a saab turbo. It was more than I could afford at the time, but the sacrafice was worth it. Mostly because I really like cars.

Now that I'm much older and more financially set, I still love a fine car. That is why I chose an '05 6MT.

Don't worry about what other's think, go with what you will love to drive (as long as you can afford it or are willing to make the sacrafices to get what you want). Life is too short...

 

Actually, it's $350/mo ($4,200/yr) + sales tax, with no disposition fee for a premium pkg X with Aero. (I got mine when the 05's were in, and they were practically giving the 04's away). If your $23K was out the door, then that'll put me another $1500 or so "behind", if you will.


Tony

 

It was Jean Paul Getty, Sr. I believe the full quote is " If a thing appreciates in value, I want to buy it. If it depreciates in value, I just want to rent it."

...He also said ""The meek shall inherit the earth, but not its mineral rights." Aaah the humor of an oil tycoon

 

Well, that is a hell of a deal if you got 15k miles and a "sign and drive" for no up-front costs or down payments. Nice work.

So let's figure this out for fun.

You pay $350x72 months = $25,200 + tax (say 6%?) = $26,712 (if you get as good a deal on the next one)

I paid $23,300 + 6% tax = 24,698. Lets say the car only has 35% of it's value left when I sell it so it's value is $8155 right? That puts me at a net of $16,543. Now I can either buy an extended warranty for $1500 or expect to pay $2000-3000 in maintenance bove what you will pay. So my total outlay is $18,545 to $19,545.

A difference of $7169-8169. Not a great deal of difference considering you get a new car in the middle, you got an X over my RWD and you benefit from the time value of money (if you were taking the total amount out of savings to buy the car)

However, I can sell mine anytime I wish, am not locked into any payments, and my final numbers are not dependant upon getting another outstanding deal on a G in 2008.

To each his own. There is no right answer.

 

I know several G owners and none (including myself) has anything to do with "rich parents".

As far as: "buying cars is one of the dumbest financial decision's you can make." - what is your alternative? Stealing one?...

To answer your initial question: "Here in Houston, I see new cars everyday, and I wonder how people afford them." ~ It's probably because the cost of living is so cheap... Try living in Orange County, CA where the median priced home is 1/2 million!

You got a reasonably priced home that is half paid for with enough cash saved to buy the car outright. Now go buy the damn car and ask the real question - why do we spend so much money on mods to get more performance and style?!!! Once you own the car you'll have the bug too!!!