At what point are you affluent enough to buy a supercar?

[Soleith]

I've owned decent cars before including Aston's, Maserati's and Porsche's but would say the Roma is my first car I've owned that I consider a "supercar" (appreciate some don't regard it as such being the entry level Ferrari but to me it is).

I notice a lot of people are talking about insurance and mechanicals but for me I wanted my first Ferrari to be specced by me and brand new given the 4 year warranty and 7 years included servicing. With that in mind and historically low interest rates I plumped down a 50k deposit and financed the rest at ~£1500/month +balloon which isn't crazy imo.

I know people say never finance but with interest sub 6% I don't understand why you wouldn't. Legal and general stock is yielding 10%+ these days and isn't exactly high risk...

That much said don't know what rates finance companies are charging now that interest rates are rising.

Edited by Soleith on Saturday 29th October 12:08

[sjc]

I thought long and hard about this earlier in the year. After getting my finances in place post divorce,I looked at selling my Noble M400 and upgrading to a Mclaren. I worked out that if something broke,I probably could afford to pay out, but my mind wouldn’t enjoy doing so.( For instance pothole a wheel in the Noble and a new one is £200 as opposed to possibly a grand upwards maybe on a Supercar).So I decided to keep what I had and have a few upgrades knowing I’d still be comfy with the running costs.

[garystoybox]

This is a question that would never have been asked 30 ago. Ok, there was always the outlyers, ‘enthusiasts’ living in the loft of their mothers council house so they could afford to run a 348 or a NSX whilst holding down a normal job. They thought this was quite normal, whereas everybody else thought it a little sad. The last 12 years of free money and ramped up production have now proved that you don’t have to be affluent at all to buy anything. Certainly the ‘buy now pay later’ attitude to life has certainly inflicted a growing number - that this is the new normal. It will all come crumbling down, it’s pretty Inevitable imo. By all means borrow away but just make sure if/when the negative equity hits or interest rates hit highs at the time to refinance you can afford to pay of the balloon without flinching. I can’t understand how anybody could enjoy prioritising running what is in effect a toy/plaything whilst knowing a £25k bill or £50k depreciation or 4% increase in apr would in effect compromise their financial security. Absolute madness imo.

[Aventador 700]

garystoybox said:

This is a question that would never have been asked 30 ago. Ok, there was always the outlyers, ‘enthusiasts’ living in the loft of their mothers council house so they could afford to run a 348 or a NSX whilst holding down a normal job. They thought this was quite normal, whereas everybody else thought it a little sad. The last 12 years of free money and ramped up production have now proved that you don’t have to be affluent at all to buy anything. Certainly the ‘buy now pay later’ attitude to life has certainly inflicted a growing number - that this is the new normal. It will all come crumbling down, it’s pretty Inevitable imo. By all means borrow away but just make sure if/when the negative equity hits or interest rates hit highs at the time to refinance you can afford to pay of the balloon without flinching. I can’t understand how anybody could enjoy prioritising running what is in effect a toy/plaything whilst knowing a £25k bill or £50k depreciation or 4% increase in apr would in effect compromise their financial security. Absolute madness imo.

There’s an element of this that will fuel this this thread.

tides are turning with regard to free money, people could never really afford supercars, they were leant the cars, that is all.

Now lending is more limited they’ll be some sore ex renters, they’ll come out saying “yeah, been there, seen it and done it”

You havent imo, you never actually owned one yourself, its a very different experience if you’ve had the patience to wait & earned the money to own it yourself, far more meaning in it than just signing a piece of paper and paying monthlies on someone elses car, not looking for an argument on it, its just how i see it and deliberately didn’t do it the finance way for these reasons, quick wins are not very satisfying, the depth of the experience equals the pain gone through, as with many things in life..

[Ovieiroro]

Aventador 700 said:

There’s an element of this that will fuel this this thread.

tides are turning with regard to free money, people could never really afford supercars, they were leant the cars, that is all.

Now lending is more limited they’ll be some sore ex renters, they’ll come out saying “yeah, been there, seen it and done it”

You havent imo, you never actually owned one yourself, its a very different experience if you’ve had the patience to wait & earned the money to own it yourself, far more meaning in it than just signing a piece of paper and paying monthlies on someone elses car, not looking for an argument on it, its just how i see it and deliberately didn’t do it the finance way for these reasons, quick wins are not very satisfying, the depth of the experience equals the pain gone through, as with many things in life..

From reading this thread, you seem a lot more focused on putting down other people's choices to either validate yours, or to somehow make you feel more superior rather than engaging in good faith discussion. As long as these people are driving these cars and making lifelong memories, then whether or not you approve of their choices or think they've earned it doesn't matter in the slightest

[Aventador 700]

Ovieiroro said:

Aventador 700 said:

There’s an element of this that will fuel this this thread.

tides are turning with regard to free money, people could never really afford supercars, they were leant the cars, that is all.

Now lending is more limited they’ll be some sore ex renters, they’ll come out saying “yeah, been there, seen it and done it”

You havent imo, you never actually owned one yourself, its a very different experience if you’ve had the patience to wait & earned the money to own it yourself, far more meaning in it than just signing a piece of paper and paying monthlies on someone elses car, not looking for an argument on it, its just how i see it and deliberately didn’t do it the finance way for these reasons, quick wins are not very satisfying, the depth of the experience equals the pain gone through, as with many things in life..

From reading this thread, you seem a lot more focused on putting down other people's choices to either validate yours, or to somehow make you feel more superior rather than engaging in good faith discussion. As long as these people are driving these cars and making lifelong memories, then whether or not you approve of their choices or think they've earned it doesn't matter in the slightest

I dont think so, but if so, my opinion matters no more than yours, its just an opinion, really means nothing if your happy with your choices, of which i am

I guess having experienced a supercar is better than never having experienced one, so its good in that sense not my i idea of an experience but we’re all different eh.

[Alexandra]

rawenghey said:

So, assuming you're eying up a supercar purchase. How would you purchase it? If there were a finance element of the payment, what kind of figure per month would you be comfortable with and have minimal impact on the rest of your finances?, Or I guess a better way would be if you were to consolidate the entire running costs of the car into one figure, do you measure that against your net income figure i.e. no more than x% of my net monthly income on a car?

Let's say that same car throws a £30k bill. Are you wiring the money immediately? Do you need to liquidate some funds? Are you considering taking a loan to cover or even selling the car?

To attempt to answer the questions, I have always had the mindset that I shouldn't buy one until I could afford two, and I don't finance cars. I consider my first supercar to have been a 599 and transferred the funds on purchase. These days they just go on the credit card for the points or a cash transfer. I don't think I've kept a car long enough for it to be out of warranty, so for big bills the last was an exhaust system for an 812. That went on credit card again.

[Fast Eddie]

Ovieiroro said:

Aventador 700 said:

There’s an element of this that will fuel this this thread.

tides are turning with regard to free money, people could never really afford supercars, they were leant the cars, that is all.

Now lending is more limited they’ll be some sore ex renters, they’ll come out saying “yeah, been there, seen it and done it”

You havent imo, you never actually owned one yourself, its a very different experience if you’ve had the patience to wait & earned the money to own it yourself, far more meaning in it than just signing a piece of paper and paying monthlies on someone elses car, not looking for an argument on it, its just how i see it and deliberately didn’t do it the finance way for these reasons, quick wins are not very satisfying, the depth of the experience equals the pain gone through, as with many things in life..

From reading this thread, you seem a lot more focused on putting down other people's choices to either validate yours, or to somehow make you feel more superior rather than engaging in good faith discussion. As long as these people are driving these cars and making lifelong memories, then whether or not you approve of their choices or think they've earned it doesn't matter in the slightest

Agree totally. Better to have driven and lost than never to have driven at all...........

[DRZ]

If you're smart enough to get into a position to have the cash sitting there then unless you're stratospherically wealthy to the point where money has largely become meaningless then tying up huge sums of money in a car is pretty silly. Make that money work for you elsewhere...

My example is that basically I've traded a long term position for a shorter term one. My Mum became terminally ill and my Dad was diagnosed with cancer, robbing both of them of their retirement. It doesn't matter if they had £1 or £1bn in the bank, they can't enjoy the retirement they worked their entire lives toward. I don't want to put off enjoyment until some future date I might not make it to. So, I have chosen a different path.

All of the supercar money (and then some) has gone into some investments and the return is more than the finance on the car. My net worth (assets vs liabilities) is maybe enough to have a nice-ish suburban semi mortgage-free and maybe that'll be a position I return to if/when it all goes massively wrong. Until then, I'm living the life I want to live **NOW** - I could be dead tomorrow.

[footsoldier]

When you have bought one

[Drl22]

DRZ said:

If you're smart enough to get into a position to have the cash sitting there then unless you're stratospherically wealthy to the point where money has largely become meaningless then tying up huge sums of money in a car is pretty silly. Make that money work for you elsewhere...

My example is that basically I've traded a long term position for a shorter term one. My Mum became terminally ill and my Dad was diagnosed with cancer, robbing both of them of their retirement. It doesn't matter if they had £1 or £1bn in the bank, they can't enjoy the retirement they worked their entire lives toward. I don't want to put off enjoyment until some future date I might not make it to. So, I have chosen a different path.

All of the supercar money (and then some) has gone into some investments and the return is more than the finance on the car. My net worth (assets vs liabilities) is maybe enough to have a nice-ish suburban semi mortgage-free and maybe that'll be a position I return to if/when it all goes massively wrong. Until then, I'm living the life I want to live **NOW** - I could be dead tomorrow.

Precisely, without coming across too pistonheads I could afford to buy all my cars 5 maybe six times over and that’s without liquifying much. You either have to be mega wealthy, old, shortsighted or in a high interest environment to be an I only pay cash person. That said, depending on new quotes as they come up over the next couple of years, I might start paying them off.

[DeejRC]

JohnDoe123 said:

Bought a supercar when I was paid 4x car value (pre-tax) and actually thought I was pushing it. If a 30k bill came up I'd be pissed but guess you'd have to pay it. I'd be more worried that wife would spend another 30k on jewellery in revenge. I think really you need to not care about usage costs at all to enjoy using a car without worrying.

You want a laugh John? My wife got hers in first…I had to bribe her with a new tractor before I could safely buy the F12 without fear of “repercussions”!

[Bilkob]

zedmtrappe said:

Age also plays a big factor here IMHO.
This must be the greatest post EVER. ‘Bought some Caribbean beach real estate and a Lamborghini Diablo’ Astonishing work!
At the age of 32, and by pure fluke; Mrs Z and I found ourselves with a reasonable chunk of equity in our house.

So we sold up, went travelling for 9 months, purchased 1/4 acre beachfront lot on a Caribbean island and then a Diablo SV when we returned home!

Although both those purchases turned out to be fantastic investments, again that was by pure fluke and (certainly in the case of the car) not something I’d expected.

At the time I didn’t really consider depreciation, maintenance - really anything like that - I was so naive back then I didn’t even get a PPI done.. and the Diablo did bite me with a pretty hefty 1st service bill as a consequence!

Looking back you could say we were reckless and maybe we were, but it actually didn’t matter - we had plenty of time to right the ship if it had all gone pear-shaped. As you might have guessed there were no kids to consider either !

Carpe Diem and all that …

But now I’m in my 50’s I would be much more risk-averse and no way even consider those sort of moves made 20 years ago.

And even then I would never have considered finance to purchase a supercar.

[Hedgeman]

DRZ said:

If you're smart enough to get into a position to have the cash sitting there then unless you're stratospherically wealthy to the point where money has largely become meaningless then tying up huge sums of money in a car is pretty silly. Make that money work for you elsewhere...

If you're smart enough to be confident of generating reliable year on year post-tax investment returns in excess of the APR on supercar finance (8% ?), then you should give up your day job or current business and start managing money professionally. You will have investors queuing at your door, will soon be stratospherically wealthy yourself and buying your cars for cash. The trouble is most people can't, and going long the S&P a few years ago or getting lucky timing when buying a few bitcoin doesn't really count.

[mwstewart]

I wanted to have certain parts of my life finanial plan in place: meeting career goals, a private pension with a healthy balance built up, and property investments in place. I wanted to be in a position to buy outright and then forget about the money, because to me the carefree aspect really increases my ownership experience.

The answer will be different for everyone. My ownership will be very long term, but if the goal is one or two years use from a car before selling on then a higher level of financial risk may be appropriate.

[fflump]

If you go down the financed new/nearly new route with a warranty and service plan then the only requirement for supercar ownership is an income high enough that the monthlies don't hurt. Accrued wealth is less of an issue.

If you're inclined to buy outright, especially out of warranty, then being able to meet a £30k bill with a shrug of the shoulders rather than sleepless nights is probably the main qualification.

[murphyaj]

cowboyengineer said:

I was earning 8k a month after tax. I put down 50k deposit and was paying £1100 a month on finance for a 991.2 manual gt3. 2 year Porsche warranty. 2 year service intervals. It went up in value. Very cheap car to run and I can drive the pants off it.

My friends who earn less than me pay more than my finance and insurance and tax cost in childcare every month

This made me chuckle. Having done both I can confirm first hand that having a supercar is cheaper than having a child and sending him to full time nursery.

[Davey S2]

Isn't the old saying 'If you can afford to pay for two you can afford to buy one'

[MisterBigglesworth]

Both my Ferrari’s have been significantly more affordable than my ex-wife, so you don’t have to be exceptionally wealthy as long as you are single

[Griffith4ever]

Davey S2 said:

Isn't the old saying 'If you can afford to pay for two you can afford to buy one'

That makes sense.

I have the mindset when I buy ANY car that the money is gone there and then. Written off. That way, any return from a future sale is a bonus, and, you drive it all the time, in most weather, not fretting about stone chips, mileage etc. I certainly don't look at cars as an investment, or somewhere to lock money up.

I think you also need to be able to stomach any bill the garage throws at you, within reason. Let's face it, how many people need a new engine? That would be a "write it off ?" moment for a lot of cars.

I'm not "rich" but I can handle any bill from a garage without it affecting my day to day life. That was the turning point for me, where buying and running a nice car had zero stress on the process.