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

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

Author
Discussion

Drl22

681 posts

49 months

Tuesday 1st November
quotequote all
Griffith4ever said:
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.
I understand why you say you are not “rich” but you actually are and in reality, even those who finance them and can’t really afford to pay the bills, are pretty rich too in comparison to some. It’s easy to lose perspective once you buy these cars, there is always someone else to make you feel poor.

RDMcG

18,020 posts

191 months

Tuesday 1st November
quotequote all
I have never owned a supercar as they are just a bit too expensive for me.

I have had a lot of Porsches though ( not a CGT which IS a supercar) including 3 GT3RS and a fourth on the way .
Even at this level out of warranty costs can be steep.

Since I tend to keep cars for decades I assume they fully depreciate and any money on disposal would be a bonus.

My basic rules are -Buy new, not a penny over MSRP, dealer service and long term ownership. Assume out of warranty costs may be very high.

sone

4,581 posts

222 months

Tuesday 1st November
quotequote all
My first supercar a Ferrari was bought privately with a crap warranty and required a new clutch and engine re-build after only 20k miles ish on the clock. So with a purchase price of circa 50k the 20k repair bill was a bit of a shock. 15 years or so on and about 15 supercars further on, basically one every 12 months plus a few sports cars, Porsches etc. I have always from then on bought within the main dealer network every time and only had very minor issues that wouldn't have been more than a couple of hundred quid to sort. Some I have financed to get a better deal and then paid off the finance after 3-4 months. Finance wouldn't worry me as long as I have plenty of equity in the car and it's properly insured.

rawenghey

Original Poster:

69 posts

5 months

Tuesday 1st November
quotequote all
Thanks for the replies everyone. It's interesting to note people's views.


fflump said:
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.
I think this is probably the nail on the head, isn't it? Suck up the dead money of the monthlies, but know that the blast radius of the car is much more contained; or be patient and wait until you can purchase it outright. Despite my hoping for pearls of wisdom that is the reality of the situation laugh. I think I'll just kick the arse out of the mortgage for another year or two and reconsider.


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..
To be honest, I agree with this.

I'm assuming we're all here as we love cars, and supercars represent the pinnacle of that passion. For me they also represent success, achievement, determination and so on. When I imagine sitting at a dealership, clasping that prancing horse-adorned steering wheel about to drive away, it won't feel the same for me if it's leased. I want to know it's all mine. And for purchases as emotional as supercars, everything has to be right to commit to it. Appreciate everyone's different. No judgement here.

Alexandra

313 posts

176 months

Tuesday 1st November
quotequote all
rawenghey said:
When I imagine sitting at a dealership, clasping that prancing horse-adorned steering wheel about to drive away, it won't feel the same for me if it's leased. I want to know it's all mine. And for purchases as emotional as supercars, everything has to be right to commit to it. Appreciate everyone's different. No judgement here.
It sounds like you're chasing something you don't need to in that perfect purchase. After a few, you will find that a Ferrari is just as imperfect as any other car. It's easy to become jaded to that feeling as well though, and then what? Looking for a yacht will bring a whole new level of adventure/frustration/chasing the next dream...

WCZ

9,697 posts

178 months

Tuesday 1st November
quotequote all
business was good, made enough money where I thought i'd spent it whilst I had it

my mentality now is different and I feel as i've got older i'm more sensible with money as I've seen the downswings of business too smile

supersport

3,657 posts

211 months

Tuesday 1st November
quotequote all
This is a bit like the house thread.

At the end of the day it's how you chose to spend your money. You might live in a tent and drive a Ferrari.

There is a world of people who sit between that and outright ownership. Personally I hate camping.

I suspect that most supercar ownership experiences are fairly short and the "owner" has gotten out the other side with their skin intact. Just look at the number of cars with one owner per year. And all those who buy them but too scared to drive them incase they devalue.

I am sure there are plenty of people who decide they can afford a year (or six months in reality) of fun they are prepared to pay £20K+ for that time.

I don't actually think there is a right or wrong way about it. However, personally the thought of owning one of these cars and not driving it seems to like an utter waste of time. Hand in hand with this goes the thought of only having use of it for a year, it's just not long enough to get to know it.



I also don't think finance is an evil thing.

Griffith4ever

2,092 posts

19 months

Tuesday 1st November
quotequote all
I agree, the Op hasn't made any judgements at all. He simply asked - how do you pay / how much have you got / do you finance / how does it sit with you?

Some of the other comments above are investigating the "experience" when renting - which to be fair, are very valid points. You really don't get to know a car properly until it's there at your disposal whener you want it, and you use it, properly. Leasing - well, I don't see it as any different to buying cash and selling. Just another way of making your money work for you how you want it to. It's still "your car" until you hand it back. My cash bought car is mine, until I sell it. I can't see a fundamental difference.

There certainly will be less people who can finance these type of costs going forward with rising interest rates.

There is no "wrong", for sure. If you want to finance youself up to the balls to buy a dream car, then so be it. Whatever works for you. We are only here once. Don't forget that :-)

DeejRC

4,340 posts

66 months

Tuesday 1st November
quotequote all
Have you stopped worrying about how much the wife/daughter/MiL are spending on 4 legged horses? Then you can afford a prancing pony.

Zadkiel

373 posts

130 months

Tuesday 1st November
quotequote all
Hedgeman said:
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.
I'm glad to finally see someone post something like this in here, because I'm always baffled by all the people saying the originally quoted. To use the Legal and General example (not to pick on that specific one), if Mr Financial Genius had decided to buy a bunch of those shares on Jan 1st and finance his supercar instead of using the cash he had then he'd be down 25% on his shares plus worse off by the interest rate he'd been paying the whole time for his clever move. Sitting there ruing the decision I imagine. I'm not passing judgement on the decision to use finance or pay cash based on people's individual circumstances but the whole "clever people finance even if they have the money" always seemed more like a thing people say who think that is correct rather than an actual truth of people in the position.

mwstewart

7,130 posts

172 months

Tuesday 1st November
quotequote all
Zadkiel said:
Hedgeman said:
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.
I'm glad to finally see someone post something like this in here, because I'm always baffled by all the people saying the originally quoted. To use the Legal and General example (not to pick on that specific one), if Mr Financial Genius had decided to buy a bunch of those shares on Jan 1st and finance his supercar instead of using the cash he had then he'd be down 25% on his shares plus worse off by the interest rate he'd been paying the whole time for his clever move. Sitting there ruing the decision I imagine. I'm not passing judgement on the decision to use finance or pay cash based on people's individual circumstances but the whole "clever people finance even if they have the money" always seemed more like a thing people say who think that is correct rather than an actual truth of people in the position.
Ditto. Add in the fact that if one isn't particularly interested in economics then it's also quite tedious - just another daily overhead.

I separate the above from financial planning which is of course a necessity.

MDL111

6,535 posts

161 months

Tuesday 1st November
quotequote all
Hedgeman said:
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.
Yeah I lost a substantial amount on my investments (unrealized, but will never recover), so I’d rather not worry about asset return and liability cost matching and leave the big money returns to others who are smarter than I am. It would suck to have to sell a car because I had a down year and couldn’t afford the monthly cost anymore (especially if that coincides with everybody else having a down year and therefore not keen to buy my car).

I bought one car on finance and paid it off. The rest I bought for cash - I do spend a very large proportion of my income on cars though, just don’t have many other hobbies. One or two years I calculated my car running costs were more than my base salary (post tax) - that hurt a bit ... they can throw big bills sometimes

Drl22

681 posts

49 months

Wednesday 2nd November
quotequote all
Zadkiel said:
I'm glad to finally see someone post something like this in here, because I'm always baffled by all the people saying the originally quoted. To use the Legal and General example (not to pick on that specific one), if Mr Financial Genius had decided to buy a bunch of those shares on Jan 1st and finance his supercar instead of using the cash he had then he'd be down 25% on his shares plus worse off by the interest rate he'd been paying the whole time for his clever move. Sitting there ruing the decision I imagine. I'm not passing judgement on the decision to use finance or pay cash based on people's individual circumstances but the whole "clever people finance even if they have the money" always seemed more like a thing people say who think that is correct rather than an actual truth of people in the position.
I think the fact that you seem to think stocks is the only place to invest your money seems to say enough about this comment.

MDL111

6,535 posts

161 months

Wednesday 2nd November
quotequote all
Drl22 said:
Zadkiel said:
I'm glad to finally see someone post something like this in here, because I'm always baffled by all the people saying the originally quoted. To use the Legal and General example (not to pick on that specific one), if Mr Financial Genius had decided to buy a bunch of those shares on Jan 1st and finance his supercar instead of using the cash he had then he'd be down 25% on his shares plus worse off by the interest rate he'd been paying the whole time for his clever move. Sitting there ruing the decision I imagine. I'm not passing judgement on the decision to use finance or pay cash based on people's individual circumstances but the whole "clever people finance even if they have the money" always seemed more like a thing people say who think that is correct rather than an actual truth of people in the position.
I think the fact that you seem to think stocks is the only place to invest your money seems to say enough about this comment.
I read it as he just used that as an example. It is ultimately I question of having the right risk-return mix (and taking into account how liquid your investments have to be for you to be comfortable).

Drl22

681 posts

49 months

Wednesday 2nd November
quotequote all
MDL111 said:
I read it as he just used that as an example. It is ultimately I question of having the right risk-return mix (and taking into account how liquid your investments have to be for you to be comfortable).
Perhaps. If so it was a weighted biased pick that served only to highlight their point, so either way….

rawenghey

Original Poster:

69 posts

5 months

Wednesday 2nd November
quotequote all
DeejRC said:
Have you stopped worrying about how much the wife/daughter/MiL are spending on 4 legged horses? Then you can afford a prancing pony.
Fortunately no kids and the misses has a job, so she can cover her own expensive hobbies laugh

Zadkiel said:
Hedgeman said:
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.
I'm glad to finally see someone post something like this in here, because I'm always baffled by all the people saying the originally quoted. To use the Legal and General example (not to pick on that specific one), if Mr Financial Genius had decided to buy a bunch of those shares on Jan 1st and finance his supercar instead of using the cash he had then he'd be down 25% on his shares plus worse off by the interest rate he'd been paying the whole time for his clever move. Sitting there ruing the decision I imagine. I'm not passing judgement on the decision to use finance or pay cash based on people's individual circumstances but the whole "clever people finance even if they have the money" always seemed more like a thing people say who think that is correct rather than an actual truth of people in the position.
Ditto. I think it's fuelled by misinterpreted ideas like "if it appreciates buy it, if it depreciates lease it." Anyway, I was looking at the finance calculator on the Porsche website and that was the nail in the coffin for me. I couldn't stomach that. The answer is simple then - when I can afford to buy it in cash + warranty/slush fund. If those effing 458s would stop rising in price I'd have a chance of catching one laugh

Edited by rawenghey on Wednesday 2nd November 08:39

DeejRC

4,340 posts

66 months

Wednesday 2nd November
quotequote all
Oh goody, another thread has turned into a my financial ball bag is bigger than yours. Yay. We are all in awe at the size of your monetary schlong. etc etc

okgo

34,521 posts

182 months

Wednesday 2nd November
quotequote all
I don’t have one, for the record, though did for the first time walking round Lyndhurst Ferrari the other day and wonder this exact thing.

But my thinking on cars of note (super of just expensive and less sporty but willing to throw a bill, Bentley perhaps?) is that it probably depends on your life stage, where you live, and your attitude to money. A lot more than reaching some arbitrary income. People that are properly wealthy need not worry about most of the above. There’s not many of those, even on this forum I’d have thought.

All IMO of course

Your life stage - many people only begin making enough money to warrant such things just as they reach the age where buying houses, paying for weddings, paying for nursery etc come into the fore. All of that for someone in London is a super car with relative ease in stamp duty and wedding alone, let alone nursery (what car could I lease with 2k a month?) - so straight away this leads to my second points.

Where you live - ironically the place that pays the money to be in a situation for buy said car overwhelmingly (although clearly not exclusively) is the worst place to drive and most likely not to have a garage or off street parking. Cars therefore take a back seat - there are streets and streets of millionaires in large swathes of London and generally the most interesting car you’ll ever see are 4x4. Cars would personally go much higher uK the agenda if I was in a position to enjoy one.

Attitude to money/finance - I kind of think what Alexandra said would be my attitude to buying one, but perhaps even 3x - I wouldn’t want a significant portion of my net worth tied up in something that can be stolen, damaged, or suddenly outlawed by legislation changes.

Can easily see however if you don’t have kids or are single and you have well paid income and have a YOLO type attitude then it would be really quite easy to justify something exotic.

murphyaj

423 posts

59 months

Wednesday 2nd November
quotequote all
okgo said:
Can easily see however if you don’t have kids or are single and you have well paid income and have a YOLO type attitude then it would be really quite easy to justify something exotic.
I agree life stage is important especially regarding kids. Not a supercar, but I bought my first Aston Martin 12 years ago for cash, a DB7 Vantage which at the time was fairly exotic, and my salary was about £30k. I was doing well enough, but far from wealthy, and my colleagues didn't understand how I could afford it. Simple fact is I kept my living costs low, didn't smoke, didn't drink much, didn't buy fancy clothes, and lived in a reasonable priced house. As such I was able to direct a very large percentage of my income into the car. I was fairly young (late 20s) and had no responsibilities, so was free to do so. I was married, but my wife knew my car obsession before we tied the knot, and I was always upfront that I wanted to buy exotic cars as soon as I could and she trusted me never to overstretch our finances to do so, thus she never took issue with it.

I do disagree with the idea that being single makes it easier though. This isn't the 1950s, and I don't go out to work and leave my wife to lounge around all day spending my money. She has a job, and that job contributes towards our household expenses. I have more disposable income because I am married, not less. (I do, however, have a st-ton less disposable income because I have a child!)

okgo

34,521 posts

182 months

Wednesday 2nd November
quotequote all
murphyaj said:
I do disagree with the idea that being single makes it easier though. This isn't the 1950s, and I don't go out to work and leave my wife to lounge around all day spending my money. She has a job, and that job contributes towards our household expenses. I have more disposable income because I am married, not less. (I do, however, have a st-ton less disposable income because I have a child!)
It was rather that there is one fewer person to convince that spending a lot of money on something is a good idea hehe