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

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

Author
Discussion

rat rod

4,997 posts

64 months

Thursday 3rd November 2022
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DeejRC said:
If it makes you feel any better Rod, the mint perfect Grale, just driven from Walkers after paying them to sort EVERYTHING which I sold for £11k to act as the deposit for buying our first house together - are now being sold for x8,9 times the price only a mere 15yrs later frown
Did get in touch with Amazon today but they have sold out of crystal balls. rolleyes



Zadkiel

390 posts

145 months

Thursday 3rd November 2022
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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.
To all of those saying "there are other options apart from shares", this sums it up perfectly. If you can generate post tax returns of over 8% with close to zero risk and high liquidity then you should be doing that for a living, not as a side bit. If you have managed to luck into successful solid double digit gains on the open market over the last few years, especially 2022, then congrats and I'm glad for you but you are a sample size of 1 that I dare say probably wasn't independently audited. The reality is that professionals who do this can't show a proven track record of capital reserved year on year gains like that over all time frames. So what I'm saying is mathematically it doesn't make sense. This never means certain scenarios aren't outliers. Person with a business who needs to keep capital in it blah blah, the usual PH examples. Of course person with a business that is killing it and can grow exponentially with every dollar invested/left in would be better off not buying a supercar on finance and investing that amount in their business each month (and the deposit) mathematically too.

So to re-iterate, it does not make financial sense to finance as a rule of thumb so it should not be suggested as such. Certain relatively rare circumstances may see it suit and good for them. But most of life's decisions don't make financial sense so anyone can feel free to do as they see fit with zero judgement from me. Not trying to go down this rabbit hole or distract from OP's question. I just commented it was nice to see some posts here there ran counter to the PH mantra for a change and now am just responding since I've been quoted a bit.

NorthernUproar

69 posts

119 months

Thursday 3rd November 2022
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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
Very similar to my situation albeit not quite exclusively supercar territory, I’ve had a 991, Portofino, 992 Turbo and currently watching very closely the Urus market. I’ve been very lucky that the original £30k I put into my very first 991 back in 2016 has came back out again at the point of each vehicle sale and post COVID, including a very lucky purchase of a new portofino is now closer to £50k

I have a budget of £1-1.5k that I’m happy to allocate each month to running a car and stay in the habit of dealer network and selling them before the manufacturers warranty expires, avoiding the risk of any large bills.

It’s a system that once you’re in is pretty easy to maintain and you get to scratch many an itch.

murphyaj

610 posts

74 months

Friday 4th November 2022
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Zadkiel said:
To all of those saying "there are other options apart from shares", this sums it up perfectly. If you can generate post tax returns of over 8% with close to zero risk and high liquidity then you should be doing that for a living, not as a side bit. If you have managed to luck into successful solid double digit gains on the open market over the last few years, especially 2022, then congrats and I'm glad for you but you are a sample size of 1 that I dare say probably wasn't independently audited. The reality is that professionals who do this can't show a proven track record of capital reserved year on year gains like that over all time frames. So what I'm saying is mathematically it doesn't make sense. This never means certain scenarios aren't outliers. Person with a business who needs to keep capital in it blah blah, the usual PH examples. Of course person with a business that is killing it and can grow exponentially with every dollar invested/left in would be better off not buying a supercar on finance and investing that amount in their business each month (and the deposit) mathematically too.

So to re-iterate, it does not make financial sense to finance as a rule of thumb so it should not be suggested as such. Certain relatively rare circumstances may see it suit and good for them. But most of life's decisions don't make financial sense so anyone can feel free to do as they see fit with zero judgement from me. Not trying to go down this rabbit hole or distract from OP's question. I just commented it was nice to see some posts here there ran counter to the PH mantra for a change and now am just responding since I've been quoted a bit.
As a cash buyer myself I feel it's also a mentality thing.

As the disclaimer always goes; the value of investments can go down as well as up, and past performance is no guarantee of future returns. I could easily pick a fund that has returned 10% over the last few years, but that doesn't mean it won't go down over the next year. Plus we're about to head into a pretty bad recession, and interest rates are only going to go up. If you can guarantee a 10% low risk return in 2023 then you are clearly much smarter than I am. People on a web forum saying how they've made 25% over the last 3 years is just an example of survivor bias; those who made a pitiful return (and there will be lots of them if you check how financial markets have performed) won't be on here crowing about it.

I am well aware that over a long enough term, if you are prepared to ride out the dips, there is a good chance you'll end up better off borrowing the money to buy cars and investing your savings assuming interest rates are low enough. But the peace of mind I have going into this upcoming downturn knowing I'm not leveraged against my car is worth a lot to me in itself. I enjoy the car more knowing I don't have any money borrowed against it, and I am prepared to forego some potential returns for that. It's just how my brain is wired.


Edited by murphyaj on Friday 4th November 09:44

rat rod

4,997 posts

64 months

Friday 4th November 2022
quotequote all
murphyaj said:
As a cash buyer myself I feel it's also a mentality thing.

As the disclaimer always goes; the value of investments can go down as well as up, and past performance is no guarantee of future returns. I could easily pick a fund that has returned 10% over the last few years, but that doesn't mean it won't go down over the next year. Plus we're about to head into a pretty bad recession, and interest rates are only going to go up. If you can guarantee a 10% low risk return in 2023 then you are clearly much smarter than I am. People on a web forum saying how they've made 25% over the last 3 years is just an example of survivor bias; those who made a pitiful return (and there will be lots of them if you check how financial markets have performed) won't be on here crowing about it.

I am well aware that over a long enough term, if you are prepared to ride out the dips, there is a good chance you'll end up better off borrowing the money to buy cars and investing your savings assuming interest rates are low enough. But the peace of mind I have going into this upcoming downturn knowing I'm not leveraged against my car is worth a lot to me in itself. I enjoy the car more knowing I don't have any money borrowed against it, and I am prepared to forego some potential returns for that. It's just how my brain is wired.


Edited by murphyaj on Friday 4th November 09:44
Makes a lot of sense, i've never had finance or bank loan on any of my cars,

if i can't afford it i i don't buy it even after my ex/wife cleaned me out,

just had to be patient for a couple of years till i got back on my feet,

Nothing wrong with borrowing the money to have it now especially if a high

earner and can be offset against your business but just not for me.nono

Griffith4ever

4,139 posts

34 months

Friday 4th November 2022
quotequote all
rat rod said:
murphyaj said:
As a cash buyer myself I feel it's also a mentality thing.

As the disclaimer always goes; the value of investments can go down as well as up, and past performance is no guarantee of future returns. I could easily pick a fund that has returned 10% over the last few years, but that doesn't mean it won't go down over the next year. Plus we're about to head into a pretty bad recession, and interest rates are only going to go up. If you can guarantee a 10% low risk return in 2023 then you are clearly much smarter than I am. People on a web forum saying how they've made 25% over the last 3 years is just an example of survivor bias; those who made a pitiful return (and there will be lots of them if you check how financial markets have performed) won't be on here crowing about it.

I am well aware that over a long enough term, if you are prepared to ride out the dips, there is a good chance you'll end up better off borrowing the money to buy cars and investing your savings assuming interest rates are low enough. But the peace of mind I have going into this upcoming downturn knowing I'm not leveraged against my car is worth a lot to me in itself. I enjoy the car more knowing I don't have any money borrowed against it, and I am prepared to forego some potential returns for that. It's just how my brain is wired.


Edited by murphyaj on Friday 4th November 09:44
Makes a lot of sense, i've never had finance or bank loan on any of my cars,

if i can't afford it i i don't buy it even after my ex/wife cleaned me out,

just had to be patient for a couple of years till i got back on my feet,

Nothing wrong with borrowing the money to have it now especially if a high

earner and can be offset against your business but just not for me.nono
When I lived in London I borrowed a fair chunk (around £30k IIRC) over a handful of years (mostly on low interest card deals) to enjoy living the London experience until my salary caught up, and then I paid it all off over 12 months. I was very confident I'd earn enough eventually in the work I did.

Worked well for me.

murphyaj

610 posts

74 months

Saturday 5th November 2022
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Griffith4ever said:
When I lived in London I borrowed a fair chunk (around £30k IIRC) over a handful of years (mostly on low interest card deals) to enjoy living the London experience until my salary caught up, and then I paid it all off over 12 months. I was very confident I'd earn enough eventually in the work I did.

Worked well for me.
I knew people who did the same thing. Except they tried it in the mid 2000s, and when the financial crisis hit they found themselves with stagnating wages, or a redundancy letter, and big pile of debt to be serviced. It's a risky move to make; clearly that risk paid off for you and I'm glad for you that it did, but I wouldn't want someone reading this to see these anecdotes and assume everything will play out the same way for them.

Fessia fancier

980 posts

182 months

Saturday 5th November 2022
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I too have never understood the greater investment returns theory, especially bearing in mind you will be likely to be taxed on the profit. To make 8% after tax must be 10-12% ish before tax. Unless you have a good small business with limited access to funding that must be an unusual scenario.
I am also wondering how often, in practice, the large unexpected repair bill comes up. Admittedly my cars are old and then might enter the “is it a super car” debate, but over many years I can’t recall a really large unexpected bill. Planned renovations or major services are different, but you know they are coming.
In terms of finance, I guess it depends on how confident one is about future income.
Most importantly, rat rod should start a separate thread on his 58(!) Ferraris and other cars. I would very much like to read that!

browngt3

1,409 posts

210 months

Saturday 5th November 2022
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Fessia fancier said:
Most importantly, rat rod should start a separate thread on his 58(!) Ferraris and other cars. I would very much like to read that!
+1
The petition starts here! biggrin

Fessia fancier

980 posts

182 months

Saturday 5th November 2022
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I think we only need another 99,995 signatures and we can get it raised in parliament!

willy wombat

906 posts

147 months

Saturday 5th November 2022
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Obviously I agree re the petition. I am also always amazed by how many contributors to the supercar forums appear to have been "cleaned out" by ex wives.

rat rod

4,997 posts

64 months

Saturday 5th November 2022
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Fessia fancier said:
I think we only need another 99,995 signatures and we can get it raised in parliament!
Better sit down with a nice cup of tea as this might take a while,well you did ask yes

Think you will be disappointed ,well with the Ferrari's ,mostly 308's GT4's,GTB/GTS's ,365's and 400's when nobody wanted them,a couple of Dino's

yes even a few Monidials for the school runs and just one 465, Sorry to say never could afford any of the great Ferrari's like a Dayton,Lusso's or 275's

not even a one owner ,19.000mile Daytona for £19.995 by Maranello's,to busy buying £8K/£12K 308's ,should have sold the house and bought four of

them, thought i had Jim Davidson's 1979 Boxer in the bag putting my name to it at Maranello's for £16,500 but he cancelled his new car and kept it.

Only four Lambo' s ,a Urraco owned for a month,Espada,Jalpa and a Countach , The rest is a eclectic mix of older Aston's ,E types ,Healeys ,Jensen's

many Rollers and Bentley's 50's/60's /70's up to the 80's, lots of yanks,50's /60's land yachts,muscle cars,hot rods and trucks, five Cosi's one being a

tarmac rally car high end replica's, three Cobra's ,D Type,C type Lotus 11, lots of Porsches from 365's,924's,944's '928's to 911's including two turbo's one

which i run out of talent and totalled it in the New Forest.

A mix of track day cars including a monster of a Poniiac Firebird that run in the AMOC Intermarque series and some single seaters , a Formula 3 that

won the 85/86 F3 championship later to win the ARP series for older F3's in the early to mid 90's unfortunatly not with me behind the wheel , took a lovely

2 litre Formula Ford with all the wings and slicks in p/ex on that ,it was full proof unlike the F3 ,any fool could drive it fast even me. Getting fed up with
falling over a trailer and a mostly unused 4x4 i went on to Caterhams,

Most of them i could drive to the track and the pub on a Sunday morning unlike the single seaters,

Probabably having almost every engined 7 they did, BDA's, BDR's,Lotus twin cam's,Red Tops twin cam Vauxhall engines with twin 45's and throttle bodies ,
Still got a track one now with 235 bhp but it's being rebuilt after having a mishap ,

My favourite is the 1700 X flow which in a high state of tune kicks out huge flames ,popping and banging, did have a couple of K series engine cars but

they didn't do much for me preferring the more old school lumps .The good thing about a 7 is you can scare yourself at 80/90 mph where as you need to be

the wrong side of 150 mph in a modern Ferrari ,Lambo or Porsche to get any bum clenching moments so making them safer and more chance to keep your

licence, Sorry this was meant to be a quick abbreviated version just as well i've forgotten more than i can remember,rolleyes

Don't think somehow i got any chance of changing ,been like this ever since my dad handed me the keys to his Healey 3000 at a disused aerodrome in the

New Forest and then said i could drive us home ,not sure if he was brave or stupid, that's how i 'm sure i ended up with this incurable disease,

Like most of us there's that moment that changes your life and interests or in my case obsession, would be interesting to hear how you guys got the bug

and cars owned past and present,:scratchchin

PS-------- You know you are getting old when you fail to remember that you owned a manual Gallardo for six years.

having only sold it in November last year, perhaps i better back track on my statement i made the other day

about having a nineteen year old brain in a seventy year old body ,nerdnerd






























































Edited by rat rod on Saturday 5th November 19:23

rat rod

4,997 posts

64 months

Saturday 5th November 2022
quotequote all
willy wombat said:
Obviously I agree re the petition. I am also always amazed by how many contributors to the supercar forums appear to have been "cleaned out" by ex wives.
The power of the pussy far outweighs the intelligence of a mere man might have something to do with it yesrolleyes

MDL111

6,895 posts

176 months

Saturday 5th November 2022
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That is very cool - a series of pics of all of them would be amazing - I’d probably have that on a wall somewhere

My car history
Some type of fiat transporter without working wipers - so when it rained I had my head out the window to see the road. It had an old mattress in the back and generally looked like the vehicle of an opportunistic rapist ...
A seat Ibiza with a non-turbo , 60hp Diesel engine - that was a car you pretty much drove full throttle at all times
A BMW Z3 M Coupe - regret selling that bitterly. Luckily my brother bought one a few years ago, so I can drive his on occasion now
A 355 used for commuting in London - loved that car and had to sell it sometime in the early ‘10s thanks to redundancy (kept it about a year longer but at some point it was getting ridiculous to crash on my sister’s couch while spending a fortune to run a car I could no longer afford)
I spent a lot of time driving a 525 ix Touring, loved it but was not technically my car (belonged to my mum)
997 GT2 - crashed that in spectacular fashion 4 months to the day after I got it. Managed c 10k km in it on Cup 1s from December to April ... spring and overconfidence caught me out there
Ferrari FF - still have that and done c 85k km in it so far
Renault RS Clio - still have that, lovely little car
430 Scuderia - been at a dealer for the last 3-4 months for sale. Missed the boat on the market. Will take it back for next spring if it does not sell
G63 AMG - still have it and love it, bought to tow
43 Challenge car - sold that earlier this year to release some cash for living expenses and I got bored of trailering the car to track days / didn’t use it enough for what it cost to run
997.2 GT3 RS - love it but rarely use it as it is mostly not where I am
996 CLR - built by a member on here and will never be sold. Might freshen up the interior and get it color changed - project for 2023

Edit to add: the first super car I guess was the 355 and I bought that when I was still working in banking / private equity. Purchase price was only 33k though, so less then a nice 3 series (the running costs of course made me cry a little from time to time ...)

Edited by MDL111 on Saturday 5th November 15:34

Hedgeman

661 posts

230 months

Saturday 5th November 2022
quotequote all
Fessia fancier said:
I too have never understood the greater investment returns theory, especially bearing in mind you will be likely to be taxed on the profit. To make 8% after tax must be 10-12% ish before tax. Unless you have a good small business with limited access to funding that must be an unusual scenario.
I think we can simply conclude that (in most cases) the "finance and make my money work elsewhere" is the translation of "I can't afford it" in powerfully built director speak smile

rat rod

4,997 posts

64 months

Saturday 5th November 2022
quotequote all
MDL111 said:
That is very cool - a series of pics of all of them would be amazing - I’d probably have that on a wall somewhere

My car history
Some type of fiat transporter without working wipers - so when it rained I had my head out the window to see the road. It had an old mattress in the back and generally looked like the vehicle of an opportunistic rapist ...
A seat Ibiza with a non-turbo , 60hp Diesel engine - that was a car you pretty much drove full throttle at all times
A BMW Z3 M Coupe - regret selling that bitterly. Luckily my brother bought one a few years ago, so I can drive his on occasion now
A 355 used for commuting in London - loved that car and had to sell it sometime in the early ‘10s thanks to redundancy (kept it about a year longer but at some point it was getting ridiculous to crash on my sister’s couch while spending a fortune to run a car I could no longer afford)
I spent a lot of time driving a 525 ix Touring, loved it but was not technically my car (belonged to my mum)
997 GT2 - crashed that in spectacular fashion 4 months to the day after I got it. Managed c 10k km in it on Cup 1s from December to April ... spring and overconfidence caught me out there
Ferrari FF - still have that and done c 85k km in it so far
Renault RS Clio - still have that, lovely little car
430 Scuderia - been at a dealer for the last 3-4 months for sale. Missed the boat on the market. Will take it back for next spring if it does not sell
G63 AMG - still have it and love it, bought to tow
43 Challenge car - sold that earlier this year to release some cash for living expenses and I got bored of trailering the car to track days / didn’t use it enough for what it cost to run
997.2 GT3 RS - love it but rarely use it as it is mostly not where I am
996 CLR - built by a member on here and will never be sold. Might freshen up the interior and get it color changed - project for 2023

Edit to add: the first super car I guess was the 355 and I bought that when I was still working in banking / private equity. Purchase price was only 33k though, so less then a nice 3 series (the running costs of course made me cry a little from time to time ...)

Edited by MDL111 on Saturday 5th November 15:34
Loved the part of sleeping on your sisters couch with a F355 outside, that's what you call passion.

Looks like you have turned it around for the better by the looks of your interesting collection,

Lovely story,no silver spoon here. .thumbup



Edited by rat rod on Saturday 5th November 18:08

MDL111

6,895 posts

176 months

Saturday 5th November 2022
quotequote all
rat rod said:
Loved the part of sleeping on your sisisters couch with a F355 outside, that's what you call passion.

Looks like you have turned it around for the better by the looks of your interesting collection,

Lovely story,no silver spoon here. .thumbup
Yes that was good fun and used my sudden spare time to drive it on better roads than London commuting ... 20k very happy miles in that. Probably still the most fun I had in a car is it was just fast enough to be fast, but slow enough to also just enjoy the sound on Country roads.
I used the money from the sale to pay for my living expenses while launching my company with a partner - priorities and all that.
Am tempted to sell cars though as I just don’t use them enough, but every time I drive one I can’t bring myself to do it ... that’s why I sold the Challenge car before driving it again after the winter track day break - otherwise it would still be with me and I’d be paying a fortune to store the huge trailer somewhere ...
Just love cars and don’t care if they cost me more than I can really afford - carpe diem and all that

Eatpies99

142 posts

53 months

Saturday 5th November 2022
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What an interesting thread. For comparison to some posts here....
I bought my 458 in January. £135k. I earn less then £100k. It costs me about £1000 a month. I don't invest any money other then my pension. But man I love driving that car.....
  1. pistonhead

MDL111

6,895 posts

176 months

Saturday 5th November 2022
quotequote all
Eatpies99 said:
What an interesting thread. For comparison to some posts here....
I bought my 458 in January. £135k. I earn less then £100k. It costs me about £1000 a month. I don't invest any money other then my pension. But man I love driving that car.....
  1. pistonhead
Agree - you get a very varied mix of views and affordability.
The nice thing is that it is a car forum, so mostly it is people who care about cars. Why else would you spend your spare time on a car forum ...

Eatpies99

142 posts

53 months

Saturday 5th November 2022
quotequote all
MDL111 said:
Eatpies99 said:
What an interesting thread. For comparison to some posts here....
I bought my 458 in January. £135k. I earn less then £100k. It costs me about £1000 a month. I don't invest any money other then my pension. But man I love driving that car.....
  1. pistonhead
Agree - you get a very varied mix of views and affordability.
The nice thing is that it is a car forum, so mostly it is people who care about cars. Why else would you spend your spare time on a car forum ...
Exactly that smile