why buy an expensive car?

[jpeyton]

It's based on status. Example: you get a job at a top tier law firm in your city, it pays six figures. Your co-workers all drive Benz's and BMW's, and now you will too.

 

[Rob9874]

Originally posted by: RagingBITCH
How is being in even further debt by buying a house straight out of college wiser than purchasing a new car? Taking out a $100,000+ loan, paying interest out the wazoo on an amortized loan, etc etc.

I graduated in August and am working a decent job, just bought a new car (was only $19,550 after tt&l) and I can't even begin to fathom buying a new house.

Because a house is an investment. You don't think of it as taking out a $100,000 loan. A mortgage is a totally different subject. You'll probably sell the house before you even begin paying down the principle. But the appreciation is free money. I wish I was ready to buy a house, but I spent too much on my car, credit cards, stupid personal loans I took out in college, etc. Friends of mine bought a house straight out of college, and I envy them.

 

[johnjbruin]

Originally posted by: marquee

Originally posted by: RagingBITCH
How is being in even further debt by buying a house straight out of college wiser than purchasing a new car? Taking out a $100,000+ loan, paying interest out the wazoo on an amortized loan, etc etc.

I graduated in August and am working a decent job, just bought a new car (was only $19,550 after tt&l) and I can't even begin to fathom buying a new house.

your house most probably won't lose value. ten years from now, whatever money you paid for the mortgage is still there. you can choose to sell your house and get all that money back. 10 years from now if you sell your car, you wont get much of your original investment back

did you know that the first 15yrs of a 30yr plan on a house is usually just spent paying interest and non of it goes towards the actual value of the house.

 

[RagingBITCH]

Originally posted by: marquee

Originally posted by: RagingBITCH
How is being in even further debt by buying a house straight out of college wiser than purchasing a new car? Taking out a $100,000+ loan, paying interest out the wazoo on an amortized loan, etc etc.

I graduated in August and am working a decent job, just bought a new car (was only $19,550 after tt&l) and I can't even begin to fathom buying a new house.

your house most probably won't lose value. ten years from now, whatever money you paid for the mortgage is still there. you can choose to sell your house and get all that money back. 10 years from now if you sell your car, you wont get much of your original investment back

So I should choose to eat breadcrumbs for the next few years trying to pay for a house I can barely afford? I don't care what it's worth ten years from now. Property depreciates too. Obviously not as fast as a vehicle does, true. But you're only paying about 1/5 the purchase price for a new car than you would be a decent new house. How many people here bought a house right out of college?

If you're married now, are you still living in the same house? EVERY single one of my friends over the age of 25 had a house in their early 20's, but sold it and got a different one with their wife or significant other. They all lost some money by doing so as well. I'd much rather put that lost money into renting an apartment and then moving into a house with a sig-o than putting up with trying to sell a house.

 

[dandruff]

Well heres my story:
bought a 56K car before buying the house. for the very simple reason - could not find a house that i liked but found a car that i liked. i am 29 and an architect.

do not regret it one bit. did look for a used one - but there were some options that just came out (not available in older used ones) and those were worth to me to shell extra for a brand new car.

did buy a used Porsche Boxster for 32K and was always in the shop - so kinda scared of buying another used ... (sold the boxster for no loss 🙂

 

[vi edit]

Originally posted by: RagingBITCH
How is being in even further debt by buying a house straight out of college wiser than purchasing a new car? Taking out a $100,000+ loan, paying interest out the wazoo on an amortized loan, etc etc.

I graduated in August and am working a decent job, just bought a new car (was only $19,550 after tt&l) and I can't even begin to fathom buying a new house.

Like spidey said - houses gain value. Mortgages are generally looked at as "positive" debt. Meaning you gain more from them than you loose.

I bought my home when I was 23, my wife (gf at the time) was only 20. It has since appreciated about $14,000 in 2.5 years, and we've built up an additional $7,000 in equity with our payments and initial down payment. You can't do that with renting.

Plus, for us, for an extra $150 more a month than what we were paying for a 2br apartment, we got double the living space, a two stall attached garage, a backyard, and best yet - NO LANDLORD! That $150 a month actually winds up being even after the tax benefits of having a mortgage.

As for the guy who said that cars depreciate faster than computer parts - pffffffffffffffft! A computer that cost $3,000 3 years ago is barely worth $300-$500 now. A car will NOT lose 80%-90% of it's value in three years. 50%...yes, but rarely more than that.

 

[marquee]

Originally posted by: johnjbruin

Originally posted by: marquee

Originally posted by: RagingBITCH
How is being in even further debt by buying a house straight out of college wiser than purchasing a new car? Taking out a $100,000+ loan, paying interest out the wazoo on an amortized loan, etc etc.

I graduated in August and am working a decent job, just bought a new car (was only $19,550 after tt&l) and I can't even begin to fathom buying a new house.

your house most probably won't lose value. ten years from now, whatever money you paid for the mortgage is still there. you can choose to sell your house and get all that money back. 10 years from now if you sell your car, you wont get much of your original investment back

did you know that the first 15yrs of a 30yr plan on a house is usually just spent paying interest and non of it goes towards the actual value of the house.

didnt know that, but even if that was the case, at least you're getting back 50% of what you're paying. you always need a place to live, if you pay rent, you'll never see any of that money again.

 

[Parrotheader]

Originally posted by: iamwiz82
A vacation could be classified as silly also. You get no equity other than enjoyment, same as a car.

Ironically, that's the one area where I don't mind spending a lot of money relative to my friends/co-workers. Being young and without much seniority I don't have a lot of vacation time yet (next year I'll finally get 3 weeks) so I cherish what little vacation time I have and look forward to every day of it. So we've made it a point to go on nice vacations while we're young, without kids, and have the money to do so. It's made for some great memories (and photos) that we'll cherish forever and I don't regret a dime we've spent on those.

Other than that though, I pretty much follow what most people would consider the 'wise' financial path for somebody in their mid-20s (which is probably why we have the money to go on nice vacations.) Don't have any debt. Pay off our credit cards each month. We have nice, reliable, but not expensive vehicles. I don't spend a fortune on electronics/luxury items, but still have decent stuff. We're packing away a good portion of income toward retirement via 401k, etc that should allow us to retire fairly early. As a result, we've been able to buy what many people would consider a second house at an early age (and thus hopefully remove the headaches a lot of people have when they know they're going to have to move in just a few years - I HATE moving.) I personally prefer coming home to a nice big house every day in my ~$14,000 truck than coming home to a smaller house/apartment in a $30,000+ car. But other people have different preferences so to each his own. If I spent a lot of time in my car, my priorities would probably be a little different.

 

[Wingznut]

When I was 21, I bought a brand new Eagle Talon Turbo. Just out of school, I was in no position to spend that kind of money on a car.

It was a total blast... But it was one of the stupidest things I've ever done, because it put myself into a huge financial hole that it took years to get out of.

 

[MercenaryForHire]

Originally posted by: jpeyton
It's based on status. Example: you get a job at a top tier law firm in your city, it pays six figures. Your co-workers all drive Benz's and BMW's, and now you will too.

Hell, I'd probably still have a Honda. Maybe an Acura if I was making that kind of bank.

- M4H

 

[Rob9874]

Originally posted by: RagingBITCH

Originally posted by: marquee

Originally posted by: RagingBITCH
How is being in even further debt by buying a house straight out of college wiser than purchasing a new car? Taking out a $100,000+ loan, paying interest out the wazoo on an amortized loan, etc etc.

I graduated in August and am working a decent job, just bought a new car (was only $19,550 after tt&l) and I can't even begin to fathom buying a new house.

your house most probably won't lose value. ten years from now, whatever money you paid for the mortgage is still there. you can choose to sell your house and get all that money back. 10 years from now if you sell your car, you wont get much of your original investment back

So I should choose to eat breadcrumbs for the next few years trying to pay for a house I can barely afford? I don't care what it's worth ten years from now. Property depreciates too. Obviously not as fast as a vehicle does, true. But you're only paying about 1/5 the purchase price for a new car than you would be a decent new house. How many people here bought a house right out of college?

If you're married now, are you still living in the same house? EVERY single one of my friends over the age of 25 had a house in their early 20's, but sold it and got a different one with their wife or significant other. They all lost some money by doing so as well. I'd much rather put that lost money into renting an apartment and then moving into a house with a sig-o than putting up with trying to sell a house.

Yes, if you can skimp and eat PB&J your first few years, you will be much better off down the road. People told me that right after graduating, and I didn't believe them. First of all, I don't know anyone who has lost money on a house. Either you live in a depreciating area of the country (rural Arkansas?), or your friends aren't very bright (no offense). I think houses here in Phoenix appreciate on the average of $5K/yr. True, analysts say that you shouldn't buy a house if you plan on selling it in less than 3 years. The money you could save each month in rent would be better in investments, assuming that's what you do with the money. But if you choose $800/month rent over a $1200/month mortage and blow the other $400, you should be buying a home instead.

 

[Nyical]

Well I dont consider 25 to 30k that expensive of a car but when you start getting in the 45K +
now that is starting to get expensive, of course this is comeing from a guy who owns his house
flat out.

 

[dandruff]

and yes driving is a passion ... i look for a chance to drive my wifes Z3 convertible ... its so fun to drive to work ... too bad it cannot handle construction sites 🙁

for me: if i have to do it again ... the joy of convertible is greater than joy of owning a house ... flames on <<<

 

[Rainsford]

Originally posted by: johnjbruin
ALL of you guys need to hand over your man cards. What a bunch of pu55y'5 :disgust:

Here's a tip for ya he-man, real men don't need expensive cars to prove they are real men. Quite the opposite in fact. Buying a nice car if you can afford it and you like it is fine, but buying a car you can't afford just so you can be cool and a real man is about the same as putting a big, flashing neon sign on your chest that says "I HAVE A SMALL PENIS AND AM INSECURE ABOUT IT". 😀

 

[JHoNNy1OoO]

Originally posted by: RagingBITCH

Originally posted by: marquee

Originally posted by: RagingBITCH
How is being in even further debt by buying a house straight out of college wiser than purchasing a new car? Taking out a $100,000+ loan, paying interest out the wazoo on an amortized loan, etc etc.

I graduated in August and am working a decent job, just bought a new car (was only $19,550 after tt&l) and I can't even begin to fathom buying a new house.

your house most probably won't lose value. ten years from now, whatever money you paid for the mortgage is still there. you can choose to sell your house and get all that money back. 10 years from now if you sell your car, you wont get much of your original investment back

So I should choose to eat breadcrumbs for the next few years trying to pay for a house I can barely afford? I don't care what it's worth ten years from now. Property depreciates too. Obviously not as fast as a vehicle does, true. But you're only paying about 1/5 the purchase price for a new car than you would be a decent new house. How many people here bought a house right out of college?

If you're married now, are you still living in the same house? EVERY single one of my friends over the age of 25 had a house in their early 20's, but sold it and got a different one with their wife or significant other. They all lost some money by doing so as well. I'd much rather put that lost money into renting an apartment and then moving into a house with a sig-o than putting up with trying to sell a house.

If you buy in the right neighborhood it sure won't. Here in Miami property values in Coral Gables have skyrocketed in the past 5-10 years. A good friend of mine bought their house 10 years ago for $75,000 and now it's worth around $300,000.(She was 27 at the time) All the surrounding area has also had that kind of jump. Investing in property is always smart because most of the time you can always get pack what you paid for as is never the same for cars.

As for the guy who said that cars depreciate faster than computer parts - pffffffffffffffft! A computer that cost $3,000 3 years ago is barely worth $300-$500 now. A car will NOT lose 80%-90% of it's value in three years. 50%...yes, but rarely more than that.

So gee 50% depreciation off 32k for something that gets you from point A to point B or 80% depreciation off 3k and no repairs and you can still use that computer 5 or 10 years from then as a server or anything you'd like with a vast number of more possible options. I'd go for the computer having a greater use for the depreciation value over an expensive car.

I wonder what the depreciation value of an Aztek is. :/

 

[Jzero]

Originally posted by: RagingBITCH
So I should choose to eat breadcrumbs for the next few years trying to pay for a house I can barely afford?

Who said "barely afford?" Of course you shouldn't buy anything you can BARELY afford! Buying a home you can't afford is just as stupid as buying a car you can't afford! But the sooner you stop renting, the sooner you stop throwing away that money. Interest is tax deductible. If your house doesn't appreciate at all, you still basically lived rent-free for the time you were in it.

I don't care what it's worth ten years from now. Property depreciates too.

In general, property does NOT depreciate. Yes, it happens sometimes, but let's face facts - just about EVERY car depreciates as soon as you buy it.

Obviously not as fast as a vehicle does, true. But you're only paying about 1/5 the purchase price for a new car than you would be a decent new house. How many people here bought a house right out of college?

I'm working on it. Heck, I only bought a car b/c my existing one died. At that, I bought a Civic b/c it was cheap.

If you're married now, are you still living in the same house? EVERY single one of my friends over the age of 25 had a house in their early 20's, but sold it and got a different one with their wife or significant other. They all lost some money by doing so as well. I'd much rather put that lost money into renting an apartment and then moving into a house with a sig-o than putting up with trying to sell a house.

The only way you stand to lose money is you don't stay there long enough and the closing costs outweigh the appreciation, or you manage to buy one of the rare properties that decreases in value (or you destroy the place).

If you are going to be in the same place for the next 5-10 years, you have very little chance of losing.

 

[Rainsford]

Originally posted by: RagingBITCH
How is being in even further debt by buying a house straight out of college wiser than purchasing a new car? Taking out a $100,000+ loan, paying interest out the wazoo on an amortized loan, etc etc.

I graduated in August and am working a decent job, just bought a new car (was only $19,550 after tt&l) and I can't even begin to fathom buying a new house.

The point is that your super fantastic new car will be worth about $5,000 in less than 10 years, while a house would go up by quite a bit in those 10 years. Taking out huge loans on anything is a bad idea, but the point is you can save your money towards a house, or even a townhouse or something. They are much better investments to make early than a new car.

 

[AMCRambler]

Because he who dies with the most toys wins

 

[Deeko]

I love driving. I'd much prefer to have a nice car than a house right away. That doesn't change the fact that I'm still in school and driving a '94 Grand Am.

 

[Thegonagle]

I think it's pretty foolish to go $30 grand into debt (that's a $500+ monthly payment) at a such shaky point in your life.

College loans just going into repayment? Just got your first (decent) job? C'mon! For various reasons, you might not even have (or want) that job six months down the road. (The job might suck, the company might suck, or maybe you might suck and get fired.)

 

[rmrf]

Originally posted by: spidey07
because they're stupid. First goal should be to get a house. But seems like younger folk today like to flash money and put themselves in horrible financial situations.

I'm 21, own (have a mortgage) a house, and I am married. My wife has a new Durango, and I plan on buying a wrx once I become a "real" employee of the company I work for (I am a contractor now). I don't see any reason not to buy a good car. Both my wife and I travel 45-60 miles a day, each, so having a reliable car that we know is going to start, and if it doesn't it has a warranty, is great peace of mind. I am willing to pay for that.

 

[WinkOsmosis]

I think it's foolish to get old before you live. It's also foolish to tie yourself down with a house and family too early.

 

[DBL]

Originally posted by: johnjbruin

did you know that the first 15yrs of a 30yr plan on a house is usually just spent paying interest and non of it goes towards the actual value of the house.

Incorrect. I bought a condo 10 months ago w/ a 30yr loan. So far, I have paid close to 16k on it, with slightly over 2k going towards principal. The ratio will increase with every payment until the interest is fully paid off. In addition, I can write off the other 14k on my taxes as the interest on the loan. Also, my condo has appreciated at least 20% since I originally signed the contract. Not a bad deal and most certainly a better financial decision than buying a car. Incidentally, my condo came with a parking space, which I rent out, and this covers the common charges.

 

[Asharus]

Agreed. Why not buy a house AND a nice car? By nice I mean a $40k car that is a few years old. It'll be about half the price, and just as nice!

 

[PricklyPete]

Financially it is a bad decision...but all decisions you make should not be solely based on your finances IMHO.

If your passion is cars, then spending extra money in that part of your life may be worth it to you. If your passion is travelling, then spending extra money toward that part of your life might be worth it to you. If your passion is computers then spending more money in that part of your life might be more worthwhile. If you like photography, spending money in that part of your life might be worthwhile....

All that being said, the argument that a house is a good investment is hard to deny....but once again... that is still arguing it from a financial point of view.

I am fairly conservative with my finances (although I almost got tempted to buy an Acura TSX a month or so ago), but I don't think that everyone should adhere to my thought patterns with regard to finances or fun.

I know several friends who bought houses right out of college and do everything "for the future"...but they live some of the boringest lives I could ever imagine. I don't want that...but they apparantly enjoy the lifestyle.

I also have friends who still party all the time, have debt out the whazoo and are the ones most likely to go out and buy a BMW when they can't afford it. I don't want that...but they apparantly enjoy the lifestyle.

Both of these sets of friends could end up regretting their actions...the first set because they didn't "live their life when they were young" and the second set becaues they "wasted their early life partying with nothing to show but debt".

It seems to me a more moderate approach between the two is the best bet...but that is really just based on my own perspective.