Can I afford it? new car

[kev374]

Apologies in advance for this being so long but I wanted to give some background!

So here is the deal… I have 3 vehicles currently:

2004 Nissan Frontier XE King cab 4-banger, 130k miles, no issues..bought it brand new 11 yrs ago and has served me well. I paid the loan off sometime in 2006 I believe. Worth is around $5k. This thing has the KD24E engine which is known for being ridiculously reliable…I know people who have 250k+ miles on it without a single issue so I know it’s going to last a long long time! Insurance, gas and maintenance are super cheap as it’s a very basic vehicle.

2012 CBR1000RR – this is my toy and I ride it occasionally to work and in the Canyons between OC and San Diego. Paid cash for it and got a ridiculously good deal in 2013 as it was a “last years model” clearance item. Worth is around $9k or so.

2008 GSXR600 – I bought this to use on the track, it’s street/track, bought it for cash $5.5k, worth prob. $5k.

I would like to get a new vehicle for a few reasons – even though I have my bikes for fun, for the large part I commute to work. My commute is virtually nothing.. 4 miles from where I live LOL! But it would be nice to take a nice drive on the weekends etc. in a nice car in the canyons etc. Besides riding, I love to drive as well!

I can’t get rid of my truck as I need it to haul my bikes to the racetrack 1 day a month. Also, I am an avid outdoors guy and sometimes go hiking in spots where I need high ground clearance to reach the trail so my truck would be useful.

Financial stats:
My income is $135,000/yr
My FICO is 813 (checked a few weeks ago)
I have zero debt
Don’t have a mortgage, currently rent
My expenses are around $1700/mo. mandatory and the rest around $500-600 or so is usually discretionary stuff, the rest I save
I have no kids, dependents, liabilities or anything else
I have around $300,000 in liquid savings (cash right now)
Additionally $50k in a 401k
I’m 41

I found a pre-owned 2014 Lexus IS350 F Sport that I like for $36k (would be $40k OTD), it’s got a balance of comfort, reliability and sport.

The pro is that this car is Lexus CPO and has 3yr/100k mile warranty from date of purchase although I doubt a Lexus needs warranty as they are a paragon of reliability.

Here is where I need opinions:

Part of me says that I will buy a $40k car and will not use it enough (I average around 800 miles a month) and it will just be sitting there depreciating. In addition, this class of car comes with increased maintainence – i’ve heard oil change is $100 (I pay $25 now at the Jiffy Lube), premium gas, additional insurance, tires etc.

Other part of me says that life is short, I do make good money, why not. The new price for this car is $47k so i’m already saving $11k, and driving my rickety 11yr old truck is getting a bit old. I would keep the Lexus for at least 15 years like I have kept my current truck so it would be a long term purchase.

My Girlfriend says that I should absolutely NOT buy this car as it does not make sense in my situation…but my GF is an extreme saver and hardly spends money on anything so not sure I want to live life to those extremes.

On the other hand I talked to my brother and he thinks it is downright absurd that someone making my income and with my savings is thinking so much about this decision, but personally I don’t think my income or savings is that substantial given my age.

What are the thoughts here? Buy and enjoy the new Lexus or just live with my 11 year old truck?

[spdrun]

Get a “nice beater” with good MPG for $5 grand and screw supporting autoworkers and dealers.

[Coronita]

You are buying the wrong car if the only purpose of you buying it is for commuting. For you, you wouldn’t be able to tell the difference between an is250 or an is-f…unless you care about bragging rights that you have an “f” and/or you plan on being a riceboy that tries to “race” Honda civic between stoplights. (Please don’t That’s just retarded). And frankly, call me biased, but when I see an is-f, I think “why?”. That IS-F is a big porker at 3780 with an automatic (no, it isn’t dual clutch). So sorry, it’s no M-competitor. I have not seen anyone bring an is-f to an autocross or track btw.

Save yourself some money. If you want an affordable sporty car, get an FR-S brand new for around $25k from LA dealers. Add a $5000 carb legal supercharger to it that will bring that 2800lb car near 300hp with a pretty flat torque curve, and call it a day. And I have seen plenty of FR-S ‘s on autocrosses and tracks.

[scaredyclassic]

Buy an expensive watch and blue velvet seat covers for the truck. Done.

[svelte]

[quote=scaredyclassic]Buy an expensive watch and blue velvet seat covers for the truck. Done.[/quote]

lol!

[Coronita]

..But to answer your question. Yes you can afford it. Do you want to and is it a good move? That’s completely different. Personally, before I were to spend $40k on a car, I’d be spending $40k towards a downpayment toward a house, especially if I already had a paid off truck and two motorcycles. But that’s just me.

[no_such_reality]

Can you afford it? Yes, but…

I forget, are you in IT or programming? The 40s are the fickle years where you need to be on top of a niche or your very exposed.

The other thought is your 41. Retirement is 20ish years away. You’re burning close to $80k a year. What’s your retirement plan? If you don’t have a DB, you need substantially more money than you’ve got.

Just. IMHO. But it really seems like your living hand to mouth, just at the $100k burn rate.

[Anonymous]

Perhaps you would spend less money and get more enjoyment if on the weekends that you want to drive for pleasure you rent a high end car for the weekend.
Hertz, for example, has the “dream”, “luxury”, and “exotic” collections, which include some very nice vehicles. You would have none of the overhead of ownership, and you could be in a different interesting car for every trip.

Furthermore, to more-or-less quote P.J. O’Rourke, “You have to get a car that handles really well. This is extremely important, and there’s a lot of debate on this subject – about what kind of car handles best. Some say a front-engined car; some say a rear-engined car. I say a rented car. Nothing handles better than a rented car. You can go faster, turn corners sharper, and put the transmission into reverse while going forward at a higher rate of speed in a rented car than in any other kind. You can also park without looking, and can use the trunk as an ice chest. Another thing about a rented car is that it’s an all-terrain vehicle. Mud, snow, water, woods, broad public staircases – you can take a rented car anywhere. True, you can’t always get it back – but that’s not your problem, is it?”

[Coronita]

I missed the part about what your girlfriend says and what your brother says. Some other things to think about…

You have no kids (for now). Make sure that you have alignment on that plan with your girlfriend, because that might not be her plans. And if two of you can’t agree, that’s probably something to think about.

Speaking of which, that girlfriend of yours, assuming it’s not a fly night night girlfriend, will probably at some point, want to live an house that the two of you own. So unless she already owns, in which you can just freeload off of her financial planning, that’s something else to think about.

And lastly, sorry to say this, contrary to what your bro thinks. At 41, with only $50k in your 401k, frankly that isn’t much. And let’s not forget the years when you were posting here that you couldn’t find a decent job because the tech industry went south.
When that tech recession hits again, and it will, it’s probably going to impact you a lot harder this time around. Considering you are 41. You’re not alone in cross the 40 mark as a techie. But for me, I don’t plan on things staying this good in the tech for me as I approach 50.

[paramount]

Buy it. It’s a reliable car that will last a long time and enjoyable to drive.

In the meantime, if your not already start looking into working at a defense contractor.

[bearishgurl]

kev, if I am reading your OP correctly, you only live off $2200 to 2300 month on your $135K gross income ($26,400 to $27,600 annually). Your rent must be very reasonable. I live alone and have never been able to do that on my ~$45K income. My best month (expense-wise) was $2750 and that was a month where I had no (bimonthly) water/sewer bill and BEFORE Obamacare came into the picture. However, I am a homeowner with all the attendant expenses that go with that dubious honor :=0.

I love the Lexus F-Sports (mainly their looks and the fact that they have an 8-spd transmission with paddle shifters) :=) However, if I ever bought one, it would be the RX. The IS is quite small and I haven’t looked but I’m sure its “trunk” is useless. I’m not sure it needs premium gas (the 2015 RX doesn’t) and I can’t imagine that an oil change for it costs $100. I could see $50 because the price of full synthetic oil has gone up a bit in recent years. The 2014 CPO sounds like a very fair deal if you really want an IS. You mentioned you would keep the Lexus for 15 years. If truth be told, it will very likely last more than 25 years or >300K miles, especially at the 9600 typical miles per year you state you would drive it (800 miles per month) before needing any major work on its engine or transmission. Of course, the years you take road trips with the vehicle, your mileage could easily go over 12K. This is all assuming that you maintain the vehicle properly, including replacing its timing belt and water pump every 90-100K miles (a pricey repair). And if you’re not going to get an AWD model, stay off rutted dirt roads, etc, which will tear up your CV boots, over and over. (Learned this lesson the hard way … my next vehicle will be an AWD/4WD :=0)

Seriously, if you like to ski or go hiking in the mtns, I would get an AWD RX (new or used) if I were you, unless your existing pickup is a 4WD model.

I don’t see any reason why you shouldn’t get a passenger car (or “crossover”), since you don’t have one. Your “girlfriend” can mind her own finances and choose her own vehicles. The Lexus is a great choice. Toyota products (new or used) are the most reliable vehicles in the world, IMO. I’ve owned 9 of them in my lifetime and have no regrets, whatsoever.

[bearishgurl]

[quote=paramount]Buy it. It’s a reliable car that will last a long time and enjoyable to drive.

In the meantime, if your not already start looking into working at a defense contractor.[/quote]

This is good advice, kev 🙂

[moneymaker]

Buy it if you have a place to park it, and keep your gas tanks full on the 2 bikes, it keeps condensation and crud out of the tanks.

[bearishgurl]

[quote=moneymaker]Buy it if you have a place to park it, and keep your gas tanks full on the 2 bikes, it keeps condensation and crud out of the tanks.[/quote]Absolutely. Buy it only if you have off-street parking for it, kev, preferably in a garage but at the very least, a carport.

[BoomerAang]

There is the phrase “if you have to ask, you can’t afford it.”

Well, technically you can at that salary. If I were in your situation, I would be maxing that 401k and working that Roth in order to reduce the taxes instead of looking at such a new toy.

Assuming you have all the space for the toys, that’s a lot of scratch for a vehicle you would be hardly driving. Would you be riding a lot less after getting the is-f? Would you even be tracking it?

You can spend a lot less cash on an older toy car if you are hardly putting miles on it. Most of the depreciation would already hit and you can squeeze out a lot more years at the low mileage you drive. There are a lot of reliable options out there. You can get a cheaper Porsche 996, a couple year old Lexus sc, an Infiniti g37 coupe, a German roadster (z4, slk).

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