IanGreening

If your spouse were to stop working or take a lower paying job would you stay be able to afford your S class?
I was over on one of the other boards and read about a member whose wife changed jobs and he was forced to sell his $75,000 car.

eLTURCOamg

that depends on how much you make

velvet fog

We've been a one income household for over 10 years.

Ferri

If you need a second salary to afford a single car--and I would in no way want to sound condescending--perhaps that is ot the car for you to start with. A rule of thumb that I always follow is that my car mothly expense should never exceed 10 percent of my take-home income.

tee_tz

I don't think that's a smart financial move - to buy a car that expensive and not be able to fully manage it on your own. My own thinking is to buy a car that I can totally afford. While a C-Class isn't a very pricey car, I would rather drive a C-Class comfortably (remaining 1000% financially stable) than an E-Class and be a little stretched or dependent on other factors (though I'm not married).

But it seems to me most S-Class owners can well afford the car without sacrificing/needing a second income. Interesting to see the responses; if people actually respond.


Tee_Tz.

tee_tz

Exactly!


Tee_Tz.

IanGreening

Well, you guys must be different. All the car salesmen I spoke to said 40-50%of the people driving $70,000 plus cars can barely afford thm and they see people all the time who wouldn't be able to afford these cars if the monthly payment is a hundred dollars higher.

MercedesFTW

Well, that's def. not how it is around here. My mom hasn't worked in about 10 years, same with about all the other wives in the neighborhood.

amdeutsch

Sounds to me like someone with a beer budget but champagne taste. $0.02

ZedStyle

credit is a crazy thing. i grew up in a part of the world where buying on credit was not a possibility, and the import duty on cars is 100% of the value. you see lots of s classes, 7 series, ranges, cls, whatever, and when you do, you know that son of a gun has enough money to buy 2 of those cars in cash. i guess that's why i drive a 95 w124, since it was the best i could do with cash in hand.
but yeah, living beyond your means becomes very embarassing when the repo man comes calling.

mbnj

I wouldn't be surprised if the real number was in the 50% range in the US. I was shocked when both a BMW and Mercedes salesman told me that almost 90% of S's and 7 series were leased/financed. I also was born in a different part of the world but it was my parents house and there was no such thing as borrowing so I'm still taken aback if a car guy even mentions financing or leasing as options. My opinion is that unless you're maybe a kid buying your first car (not a new Mercedes) you simply take the money out of the bank and buy it, if your wife works, great; if she quits, no sweat; if you walk, that's OK too. Since the US has a negative savings rate and we treat discretionary spending like they are necessisities I have no reason to doubt the quoted figures. I'm sure I'm in the minority opinion here and all the money guys will explain why it is smart to lease/finance- I keep my cars and there is no way that I am better off leasing, others may be.

Doctodd33

Trump seems to be doing fine financing......regarding the car, it isnt worth the stress of knowing if you can make a car payment if something happens to decrease your income. If you cant enjoy it, why bother?

T

NY C32

NY C32

Its no secret that a good portion of leases are signed by those that couldn't afford to finance or pay cash. Others lease because they don't keep cars more than a few years. Leasing offers a nice way to drive the car you want for the term you want and walk away. Nowadays, the payments even include gap insurance so it even makes it more attractive over financing and trading in.

There are also tax benefits to leasing and sometimes financing for many business owners and self-employed people. Others don't want to tie up cash in a depreciating asset when they can make money on their money (above the interest rates they're charged). Even still, there are others that get company paid car allowances where again, they don't want to tie up their own cash to pay upfront for a car their company is willing to pay over time.

OJwerks

like the old saying goes..... "if you have to ask, you cant afford it"

IanGreening

OJ Werks, the saying is wrong. Every rich person I've ever known has ALWAYS asked the price of EVERYTHING. It's only the middle class guys who pretend they don't care about price.

Ferri

Excellent response--I would like to second it. Wealthy people did not get there by not asking--bankrupt people perhaps did!

tee_tz

That's very true!


Tee_Tz.

tee_tz

Actually no - and I agree with that statement. Billionaire fashion designer Ralph Lauren said that as well. His point was to say that rich people are accustomed to a certain lifestyle, therefore, they know a proper dress shirt will cost $XXX, they'll know a dinner at a 5-Star restaurant which doesn't list prices on the menu will cost $XXX per person. They have an idea of these things because these are things they are used to doing/buying. Middle-class people sometimes walk into an expensive store to get something nice once in a while - say like Gucci and see a bag, and ask "how much?" The implication of that question is - "Can I afford it or not". Whereas a rich person sees the bag and likes it and immediate wants it -- if it's $450 fine, if it's $850 fine, I don't care - I want!

It's worth mention that yes, there are some rich people that have a penny-saving attitude, but not many. Especially those who take G5 flights for $80K per day; who cares about $400 bucks!


Tee_Tz.

tee_tz

That's an excellent point. In fact, I heard exotic car dealerships were starting to offer leasing to company's. They write a Ferrari off as the CEO's car. And it's a flexible payment option, I don't think it has anything to do with being able to afford it or not, I've known some millionaire lease cars - most because they're not totally into cars.

Yes, you have to respect people in foreign countries -- in Tanzania (East Africa), there's no car loans or leases, if you want that S-Class you pay straight cash, and the 80% taxes on it.


Tee_Tz.

NY C32

Uh, not really. The only rich people that don't look at prices are lotto winners and trust fund babies that never earned money and never learned to respect it. People with wealth know what everything costs. They have a perceived value for everything and willing to pay up to that price. When they ask "how much", it isn't to figure out whether they can afford it, its a matter of knowing. I'm not implying that they price shop but they certainly won't let themselves get jacked just because they have money.

Most of the guys that jump on a G5 don't own it...corporations do. The ones that do own their planes definitely care about $400 because I guarantee you that they wouldn't pay $399 for a $.75 twix bar.

BTW- There isn't a reputable restaurant in the western world that doesn't list prices. If there aren't prices on your menu, that just means you're not the host.

mbnj

Agree with everything, I just did not take the time to write up all the exceptions since I'm just a guy who has to pay for the cars himself and I don't own a business. I personally think that the "convenience" leasers are financially mistaken but that is why so many folks don't have much saved and its a lifestyle choice.

Regarding people not asking what things cost or they can't afford it, that's nonsense although it may sound cool. "Afford" is the operative word here and it depends on the person making the purchase. I and many others can "afford" lots of things, we don't because we don't feel their is sufficient value at a point in time.

jmf003

Anyone who is interested in this topic would probably get something out of the book, "The Millionaire Next Door." Excerpts of chapter one are available online in many places including here:http://www.washingtonpost.com/wp-srv...renextdoor.htm

The even quicker summary is high consumption level .notequals. high wealth.

pmb600

Agreed. You forgot one group of people who never ask prices, spoiled wives who are shopping on Madison Avenue with their husbands American Express Centurion Card. Only a fool would not look at prices. I do understand the sentiment of the "if you have to ask..." statement but I would never not ask a price no matter how much money I had.



There are exceptions to everything. Many people lease because they can't really afford the car cash/financed, but many do it for the convience, they know exactly what they will pay and what happens in 2-3 years. Also how many countless stories have you seen on this forum where a guy that owns his car gets in an accident that isn't his fault and then when he goes to sell it it will be worth less--another excellent reason people lease.

Also occasionally it makes perfect financial sense to finance. I bought my car last summer when Mercedes was doing a special 2.9% finance offer, I decided that it would be better to borrow their money than take out cash from my savings that is earning much more. Also, my credit score is very high, and I have no debt other than this car loan, but it does help your credit score to have a loan payment history in addition to credit cards.

bzliteyear

keeping up with th "jones" is not a way to financial independence. heck, i almost didn't want to buy a rolex because so many wannabees were buying it on credit just to have one.

the statement above on $70k+ financing is probably a true statement. however, most of the guys i know who can afford to buy $75k+ cars are buying used ones for cash so they save 40-50% for missing on the first 2-3yrs...and usually the car is still under warranty. my friend just bot a 2003 745Li fully loaded w/ only 33k miles and he paid $40k. he's got free svc for another 9 months, and he also has factory 6 yr 100k warranty. i think the car was $85k-90k new...now that's a smart move.

when i first got into the i-banking world as a rookie in the early 90's, i learned that senior guys making $400k+/yr were buying acura legends that cost less than $35k. that was my first role lesson. and now, even a friends who's retired at age 35 and could buy anything he wants, he just got a 2006 M5 with low miles for $20k off MRSP vs. a new one.

bottomline, do what you want but try to find someone that you look up to and emulate what works for them...you have the best likelihood of getting similar results rather than following the pack who are trying to "keep up with the jones."