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This weekend I was driving around my city and just noticed how many expensive cars there were around. For example, this one lady was driving an Infinite QX56 which tops off around $80K. Basically, all these people in my city also own houses.
Even at my work, most people start with at least "low end" car around $35K and many get $60K+ cars. I think I am one of few guys my age at my work who doesn't have BMW or a fancy car to show off. I still driving my almost 5 year old Hyundai still. Don't think I would get a car over $50K+ unless I was a millionaire with extra cash lying around.
I know most people at work or at my city don't earn that much more than me. But how could they afford these expensive cars? I really wonder what their budget looks like since most have houses or luxury apartments too!
You're about 26 right? The average income in Murphy is about $108K a year. Now that could be double income families. There are also a large number of executives and business owners living here. But they are also going to all be people older than you. There's just not a ton of mid-20's folks living in Murphy - definitely a family oriented city.
On my street there are two guys who love to buy higher end vehicles at auction. And there are lots of people I know who buy those $50K cars used. And tons of leases. Even the anesthesiologist who lives in my neighborhood and has about 6 AMGs is only leasing them all.
And I, for one, think that's cool. I drive a twelve-year-old car and refuse to air condition my home, but I spend a truly ridiculous amount of money on gourmet groceries, fine dining, and expensive wine. We all have our indulgences.
For some people it's as simple as that. I'm not into luxury cars and I probably wouldn't buy one but I dont assume that people who drive them are just trying to keep up with the Joneses. Some people have an above average income.
an employee was telling me her "husband" bought a 2005 bmw m5 (probably a couple years used). the guy was a parking attendant at the time. its amazing how dumb some people are financially.
What about a "luxury" $50K car that can be partially financed at .99%-1.99% (common now)? Maybe someone could pay cash, but it is not to their financial advantage to do so. Maybe low financing can be used to free up cash so it may be invested in other areas for a higher return?
p.s. Also want to add that most luxury cars keep their resale value better than other types of cars, which should also factor into the financial equation.
The point is that you COULD pay cash for it. How you decide to go about owning the car then becomes irrelevant. I could pay cash for my lease car (and I own my other two cars outright), but it makes more sense for me to keep my cash doing other things while taking advantage of great rates, etc.
People who have no hopes of ever owning a luxury car without jumping through strange financial hoops should probably just not do it. Just like I don't get why anyone would finance a tv (unless it was free interest)...it's a tv. It's not food, water, air, or shelter. Save up the dough and buy it when you can afford it.
half? how does that work? you paid $15k for your nissan?
I have 3 cars at the moment (and that's down from 5! lol). The Nissan is my train station car. The Benz is my fun car. The Taurus Wagon is my utility vehicle.
The Nissan and Benz were business purchases and both hybrids. Also the Nissan I used cash for clunkers. So I got tax deductions, hybrid credit, sales tax exemption, and cash for clunkers.
The taurus wagon I bought used for a few grand because the IRS likes you to own a personal vehicle if you have multiple business vehicles.
People who drive $50K cars can't afford them. People who can afford $50K cars, drive $10K cars. That's how they are able to afford expensive cars, they don't blow it on stupid things like the latest, expensive cars..
The thrill of the fancy new car wears off far sooner than the payments end..!
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