Appropriate salary to buy a Supercar

[selym]

kingston12 said:

Badda said:

Kent Border Kenny said:

No, it’s not foolish at all.

Accumulating wealth may be the right thing for you, but it’s not for everyone.

By your measure, me spending all of my supermarket wages on beer and crisps would have been idiotic, but I don’t regret it at all.

May I ask, how much extra wealth have you accumulated through not having nicer cars, and what do you plan to do with it?

Are you certain that as the light starts to fade at the end of your life that you’ll think the same way, that your share portfolio is the better investment than having a memory of driving in your twenties with a beautiful woman to Nice in a Ferrari via the Alps, when you have the stamina and the body to enjoy every moment properly?

Perhaps you’re right, but I suspect that there’s also a chance that you aren’t.

Edited to add, me posting this made me think of the Ballad of Lucy Jordan, which I’m listening to now, and reminded me that when I was properly wiped out in 2009, and found myself divorced, unemployed and with less money to my name than I thought possible given where I’d been in 2007 that I called McLaren on the morning that the Frankfurt motor show opened, and placed an order for a McLaren MP4-12C, deciding that it was a far better idea to have a year touring Europe in it staying in the best hotels than to have a slightly nicer kitchen than I’d otherwise have, for the rest of my life.

Edited by Kent Border Kenny on Monday 2nd November 14:37

I think many can really sympathise and indeed empathise with you my friend. At our lowest points, we’ve all had the dilemma of a brand new Mclaren or a new kitchen. Your struggle sounds real.

That does have to be up there with 'the most PH' posts of all time.

Kent Border Kenny is a parody account, surely.

[gangzoom]

bobbysmithy said:

kingston12 said:

That does have to be up there with 'the most PH' posts of all time.

Absolute gold. 'I was at my lowest point with less money than I thought was possible, so I bought a McLaren'

I think this quote is up there with 'dominating the stairs'.

Loss your job, celebrate by ordering a brand new McLaren.

This is PH gold.

[bentley01]

When I was in my early thirties and earning about 60k a year I bought a new 997cs for cash. I was married and had a house to pay for so how did I do it. Simple trading up. People with petrol in their veins usually start low and then are able to work up. A 944 became a Boxster then an M3 and eventually I could afford the 911.
Fast forward to now and whilst my income has increased so has my outgoings with a bigger house two kids and football/ swimming and a million other things.
Could I afford a Mclaren probably yes but could I justify it probably no.
The main reason being time and the running costs which are hard to swallow if Sunday mornings are spent on the touch line rather than out driving. So I think the reason that you don’t see supercars on the drives of many middle/ high earners is not because they are unaffordable but perhaps it is that on balance a choice has been made.

[okgo]

Love to hear more on how people trade up on depreciating assets 🤪

[PrinceRupert]

okgo said:

Love to hear more on how people trade up on depreciating assets ??

I assume (with indicative figures)

Take out a loan on Car 1 for 20k. Pay it off over three years.

Sell Car 1 for 15k. Take out a loan of 20k, buy Car 2 for 35k. Pay it off over three years.

Sell Car 2 for 25k. Take out a loan of 20k, buy Car 3 for 45k.

And so on...

[Kent Border Kenny]

okgo said:

Love to hear more on how people trade up on depreciating assets ??

Whenever I buy a car or a bike, I’m considering the cost per year, all-in. Interest rates are so low now that upfront cost doesn’t really matter, and for some reason, I’ve tended to fixate on £10,000 per year as the all-in cost that I’m happy spending on a “premium” car.

This covers a huge number of quite special things. I ran a brand new 911 GTS for two years for £4,000 per year, an SLK55 for £2,000, and an immaculate R8 for four years for zero, all-in.

A brand new B7 RS4 cost me £4K per year over five years, and, stepping up, a V10 R8 Plus was £8k per year over three years.

This year I bought and modified a Range Rover Sport, it now has 650bhp and I think will cost £3,000 per year.

A far bigger gamble is the 650s that I just bought. It was £90,000, having dropped from something like £250,000 over the last five years. The warranty is £5,000 per year, insurance £700, servicing £500. Will depreciation be under £3,000? I’ve no idea.

[bentley01]

okgo said:

Love to hear more on how people trade up on depreciating assets ??

Came in handy when I needed to raise a quick 100k to convert an Old Barn. Just cash the cars in and instant cash. Might be depreciating assets but I’m not sure that I would of had the cash sitting there.

[Shrimpvende]

All good points about enjoyment vs savings etc.

If you have the affliction of being a proper petrolhead you always find yourself doing man maths to justify daft things. The amount of times I've thought 'if only I hadn't spent £xxxx on cars in the 10 years since getting my license, I could buy YYYY', where 'YYYY' turns out to be another car(s)! There isn't really anything else I'd spend the money on, so if I suddenly came into money I'd most likely spend it on cars anyway as it's my main hobby.

You can't forget the emotional side either. If I got hit by a bus I'd be laying there pleased that I'd spent that summer in my (admittedly ropey) Aston when I was 23, or spent my house deposit on an F type when I was 24 etc...the memories those cars gave me are some of the very best I have. I'm not sure I could lay there pleased I had a large bank balance and a great pension pot. I guess life is all about balance, you're never going to make a Ferrari work on £27k but other stuff is do-able with compromises. I probably wouldn't advocate spending a house deposit on a car again though, that was a bit silly.

[av185]

Shrimpvende said:

I probably wouldn't advocate spending a house deposit on a car again though, that was a bit silly.

As with most things timing is all. Sometimes you can be lucky other times less lucky.

Those buying property equities or expensive cars on 'the bullets' shortly after the last financial crash were handsomely rewarded with major rises ££ post crisis. Anyone who sold out at or near the bottom of the market found it virtually impossible to buy back in without incurring considerable cost.

Many high end cars have enjoyed very strong price rises due to the pandemic and lack of supply together with increased affluence due to BBLs and furlough payments.

[Triple Six]

Shrimpvende said:

All good points about enjoyment vs savings etc.

If you have the affliction of being a proper petrolhead you always find yourself doing man maths to justify daft things. The amount of times I've thought 'if only I hadn't spent £xxxx on cars in the 10 years since getting my license, I could buy YYYY', where 'YYYY' turns out to be another car(s)! There isn't really anything else I'd spend the money on, so if I suddenly came into money I'd most likely spend it on cars anyway as it's my main hobby.

You can't forget the emotional side either. If I got hit by a bus I'd be laying there pleased that I'd spent that summer in my (admittedly ropey) Aston when I was 23, or spent my house deposit on an F type when I was 24 etc...the memories those cars gave me are some of the very best I have. I'm not sure I could lay there pleased I had a large bank balance and a great pension pot. I guess life is all about balance, you're never going to make a Ferrari work on £27k but other stuff is do-able with compromises. I probably wouldn't advocate spending a house deposit on a car again though, that was a bit silly.

I'm in the same boat as you.

I'm no high earner, but I've always been cautious with my money and saved well since I left university 7 years ago.

Thanks to a good choice of previous cars I've always done well residually, and I'm currently driving an R8 V10 manual. I lumped a majority of my savings into it, and I've got a personal loan to cover the rest, around £450/month.

It's expensive to tax, fuel, maintain etc, however the car has already appreciated slightly and so aside from running costs the loan repayments are building equity; I think of it as a "mobile savings account". There is no way I would feel comfortable doing so in a car that was depreciating faster than I was paying it off.

We are about to get on the property ladder, the intention was to sell the car but it looks like it will be staying for now. When the time is right my aim is to sell up and hopefully use the equity to buy a second property.

Am I mad? Maybe. But have I enjoyed myself? Certainly. Do I have any regrets? Not yet.

[NickCQ]

Triple Six said:

I've always been cautious with my money ... left university 7 years ago ... lumped a majority of my savings into it ... personal loan around £450/month ... not on the property ladder

You and I have different definitions of "cautious with money"

[pb8g09]

Triple Six said:

I'm in the same boat as you.

I'm no high earner, but I've always been cautious with my money and saved well since I left university 7 years ago.

Thanks to a good choice of previous cars I've always done well residually, and I'm currently driving an R8 V10 manual. I lumped a majority of my savings into it, and I've got a personal loan to cover the rest, around £450/month.

It's expensive to tax, fuel, maintain etc, however the car has already appreciated slightly and so aside from running costs the loan repayments are building equity; I think of it as a "mobile savings account". There is no way I would feel comfortable doing so in a car that was depreciating faster than I was paying it off.

We are about to get on the property ladder, the intention was to sell the car but it looks like it will be staying for now. When the time is right my aim is to sell up and hopefully use the equity to buy a second property.

Am I mad? Maybe. But have I enjoyed myself? Certainly. Do I have any regrets? Not yet.

Surely the appreciation in value will only be noticeable if you're not putting any miles on the car?

[Triple Six]

pb8g09 said:

Surely the appreciation in value will only be noticeable if you're not putting any miles on the car?

3,000 miles over 12 months so far, there is no "significant" appreciation but I think I could sell it for a little more than I paid for it. I never bought the car with the intention of making money, but I knew it was a relatively stable purchase.

NickCQ said:

You and I have different definitions of "cautious with money"

Perhaps, but I seldom drink, don't smoke, no children or dependants, cars have always been my hobby.

It's worth noting the car wasn't a frivolous off-the-cuff purchase, I watched the R8 market for 18 months prior to purchasing and so I had a sound understanding of values and trends. I ran my previous car for 4 years, paid it off and sold it for only a little less than I bought it for, hence putting me in a good position to upgrade.

I could have probably financed an AMG/M2/RS3 etc, but I think I would likely have been worse off overall.

Edited by Triple Six on Wednesday 4th November 14:54

[pb8g09]

Triple Six said:

Perhaps, but I seldom drink, don't smoke, no children or dependants, cars have always been my hobby.

It's worth noting the car wasn't a frivolous off-the-cuff purchase, I watched the R8 market for 18 months prior to purchasing and so I had a sound understanding of values and trends. I ran my previous car for 4 years, paid it off and sold it for only a little less than I bought it for, hence putting me in a good position to upgrade.

I could have probably financed an AMG/M2/RS3 etc, but I think I would likely have been worse off overall.

Edited by Triple Six on Wednesday 4th November 14:54

I understand what you've done/doing and it's very admirable. You are however carrying a lot of risk in your strategy, only takes a person changing a lane without using their indicators or mirrors and your investment isn't looking so savvy, or your gearbox blowing it's load all over the road etc.

That's a risk that's too much for me to not be panicking driving it around knowing that I'm relying on that money to pay for my house or whatever future purchase I'm expecting to yield from it. Fair play to you though if you're able to.

[Triple Six]

pb8g09 said:

I understand what you've done/doing and it's very admirable. You are however carrying a lot of risk in your strategy, only takes a person changing a lane without using their indicators or mirrors and your investment isn't looking so savvy, or your gearbox blowing it's load all over the road etc.

That's a risk that's too much for me to not be panicking driving it around knowing that I'm relying on that money to pay for my house or whatever future purchase I'm expecting to yield from it. Fair play to you though if you're able to.

Thank you.

Fortunately I have agreed value insurance and an Audi warranty which gives me some peace of mind. I also have my house deposit set to one side, I’m not quite daft enough to have all of my savings tied up in an asset!

Had circumstances with my girlfriend been different 12 months ago then I wouldn’t have bought the car and instead got on the property ladder. She is stubborn and has been determined to save her own half of the house deposit, which has given me some time to enjoy.

In the meantime I probably would have regretted the money in the bank. With risk comes reward, and in my case the reward (for now) is a screaming V10 with a manual gearbox and straight pipe exhaust

Edited by Triple Six on Wednesday 4th November 15:51

[NickCQ]

Triple Six said:

I also have my house deposit set to one side, I’m not quite daft enough to have all of my savings tied up in an asset!

An important distinction lacking from your previous post!

[Shrimpvende]

Triple Six said:

Perhaps, but I seldom drink, don't smoke, no children or dependants, cars have always been my hobby.

It's worth noting the car wasn't a frivolous off-the-cuff purchase, I watched the R8 market for 18 months prior to purchasing and so I had a sound understanding of values and trends. I ran my previous car for 4 years, paid it off and sold it for only a little less than I bought it for, hence putting me in a good position to upgrade.

I could have probably financed an AMG/M2/RS3 etc, but I think I would likely have been worse off overall.

You've found the holy grail sir. A car like that, new enough (I assume) to not cause major headaches or need expensive consumables yet isn't depreciating by thousands of pounds a year. If you can find a car like that and trust it not to self destruct then the required salary to own it probably isn't all that high if no other dependents/significant outgoings, as long as it's treated as you say like a driveable bank account, i.e if something comes up you can liquidise quickly and get most of your cash back out again.

Supercars aren't really for life, normally owned for a short time by each of their multiple owners. I guess there's plenty of young and not so young petrolheads out there that have made it work, even if just for a year or so, then got rid and bought a house or done something else sensible instead if they weren't financed to the hilt. I took a punt on my latest Aston as it was on a once in a lifetime deal and I knew I could comfortably afford the repayments for 2 years even if I lost my job the day after delivery. Gap cover, manufacturers warranty and free servicing mean I know exactly what I'm on the hook for, and the lane change scenario above would just leave me without my car, not in financial ruin.

Can I afford to get something else similar once this PCP ends next year? I don't know yet as the full effect of Covid on our businesses isn't yet known, so I'll cross that bridge when I get there. My salary may not change by then but other circumstances might which could make it unaffordable or very unwise.

Edited by Shrimpvende on Thursday 5th November 09:13

[Triple Six]

Shrimpvende said:

You've found the holy grail sir. A car like that, new enough (I assume) to not cause major headaches or need expensive consumables yet isn't depreciating by thousands of pounds a year. If you can find a car like that and trust it not to self destruct then the required salary to own it probably isn't all that high if no other dependents/significant outgoings, as long as it's treated as you say like a driveable bank account, i.e if something comes up you can liquidise quickly and get most of your cash back out again.

Edited by Shrimpvende on Thursday 5th November 09:13

Yes, exactly. The homework/research is key to calculating the risk.

However, I'm not the delegate for this thread, I think it's aimed at those buying new/nearly new £150K+ exotica. I'm a long, long way off!

[gangzoom]

Triple Six said:

However, I'm not the delegate for this thread, I think it's aimed at those buying new/nearly new £150K+ exotica. I'm a long, long way off!

Actually the conclusion from this thread is the best time to buy a Supercar is when you have just lost your job and your family...

Kent Border Kenny said:

when I was properly wiped out in 2009, and found myself divorced, unemployed and with less money to my name than I thought possible given where I’d been in 2007 that I called McLaren on the morning that the Frankfurt motor show opened, and placed an order for a McLaren MP4-12Cfootnote]

To be honest am not sure OP started this thread when they already knew the answer .

Edited by gangzoom on Thursday 5th November 19:38

[Kent Border Kenny]

gangzoom said:

Actually the conclusion from this thread is the best time to buy a Supercar is when you have just lost your job .

I don’t know if the car that I bought since starting the thread counts as a supercar or not, but the right time this time was definitely when I’d had a bad day at work