At What Point Would You Be Comfortable with Dropping $60K into a Car ?

RobotWizard on 06/01/2021 - 02:33

Evening ladies and gents,

I am in mid 20's and have been a massive fan of performance cars since my teen years and have owned a few good cars in past, I would blindly spend money on cars or parts without thinking about consequences, I currently own a car which would have market value of between $20K-$25K if I sold it.

I recently became obsessed with CLA45 AMG and the ones I like are between $60K - $80K.

I do currently own a place and have some savings aside but think it's still a stupid decision to spend all this money on car and not on investment property but would love to hear your feedback ! at what point of life you would be comfortable with spending that sort of money on (High Yield Investment) Car ?

Financial Car

Comments

  • bazingaa on 06/01/2021 - 02:36
    +151

    never

    • havebeerbelywillsumo on 06/01/2021 - 02:37
      +3

      ditto

    • Ryanek on 06/01/2021 - 08:09
      +78

      If you're making 100K a month why wouldn't you? It's all relative.

        • Ryanek on 06/01/2021 - 08:40
          +58

          Like I said its relative. I'm sure there are people in 3rd world countries who think it's ridiculous we spend 25K on a car.

          • lunartemis on 08/01/2021 - 08:23

            @Ryanek: "Developing" countries

            • capslock janitor on 08/01/2021 - 11:16

              @lunartemis: Some of those lesser countries actually pay more markup for new cars
              They tend to buy second hand actually

            • Chchnu on 08/01/2021 - 13:35
              +1

              @lunartemis: Do we assume if a country is 3rd world they developing? Some stay 3rd world because of war/resources.

              Alot of 3rd world in Africa thats not really developing.

              • afah0447 on 20/01/2021 - 09:53

                @Chchnu: It just suffers from world-class corruption and cronyism.

          • WilliamDGH on 10/01/2021 - 19:08
            +1

            @Ryanek: You do know the term 'third world countries' is not used to describe a country's wealth right? It simply means a country is neither aligned with the West (NATO) nor with the East, the Communist bloc.

          • Yepseh on 07/01/2021 - 19:13
            +10

            @Viper8: Per month?

          • entropysbane on 11/01/2021 - 09:39

            @Viper8: The average doesn’t mean much. The median, where half the country earns less, is about $57k

            • Viper8 on 11/01/2021 - 10:57

              @entropysbane: That includes part-time and casual.
              Median full-time wage is 71.5k.
              I used average as that's what OP used.

              • entropysbane on 12/01/2021 - 20:40

                @Viper8: Half the country still earns less though. Many people can only do part time.

      • netjock on 08/01/2021 - 11:18
        -4

        If you're making 100K a month why wouldn't you?

        Because a lot of that money might be already spoken for. Lifestyle inflation. You're not making $100k a month eating cheap meals everyday. There would be expenses attached.

        • Ryanek on 08/01/2021 - 11:31
          +4

          Ryan from Ryans Toy Review made 2.5 million a month last year. I'm pretty sure their family can afford a 60k car.

        • Jaystea on 08/01/2021 - 19:32
          +2

          You would know because you're making that sort of money? The insinuation that just because there are expenses attached to a 100k/month income therefore a 60k car is somehow irresponsible is laughable.

          • netjock on 08/01/2021 - 19:37
            -2

            @Jaystea: Someone is feeling salty.

            Just check on those who won the lottery. Lifestyle inflation is real.

            • AncientWisdom on 08/01/2021 - 19:42
              +5

              @netjock: lifestyle inflation is certainly real, but not to the degree that someone making $100k/mo can't afford a $60k car.

              Put it a different way, if I made $10k a month, I could easily afford a $6k car.

              Making more money makes it MORE likely that I can afford something, not less.

              • netjock on 08/01/2021 - 19:44
                +1

                @AncientWisdom: You would be surprised at rich people living pay check to pay check.

                I was working at a top ASX company and the IT guys were talking about how they struggle to make ends meet on $250k pa.

                We all assume of the best because we're on ozbargain.

                • ankor on 09/01/2021 - 12:18

                  @netjock: I wonder how much of that income is tied up in mortgages.

        • mahdoo on 10/01/2021 - 16:42

          Like a 100k+ car for example?

    • Mortal Krumpet on 07/01/2021 - 23:34
      +12

      Yea all depends on what makes you happy and what you personally value. I love driving manual high power performance cars. It’s worth it to me personally without question, to spend that kind of money, because it’s what I enjoy. To others it may be entirely different, so I don’t feel I can answer for someone else. I’m lucky enough to be able to spend it, but the reality is that it comes down to how much you are willing to sacrifice (now or in the future) for what you want to pay - everyone will have a different answer.

      • entropysbane on 11/01/2021 - 09:47
        +1

        Sometimes it depends on your circumstances:
        Live in rural areas and pretty much $50k is the minimum price for a decent 4WD. The benchmark for these people is a GXL Prado about $65k.
        Ditto anyone thinking of towing anything. Even if you go large SUV you are talking that kind of price.
        Three kids + and need a seven seater?
        People Movers? The carnival is the best option and it tops out at $65k before on roads
        A decent sports car?
        Anyone wanting a prestige brand.

        I am looking at a three row large SUV to fit my family’s needs. You can get a povo pack below $50k, but interestingly all manufacturers seemed to have positioned the models with a decent amount of kit around the $60k mark (non German brands I mean). Top end Mazda, Hyundai and Kia are nudging $70k. A Q7 Audi with similar kit is around about $130k.

    • hothed on 08/01/2021 - 10:38
      +1

      Max out your super 25k/yr. Play with the rest of the money.

      Super is a low tax environment(15%), rather than your salary. You can have a much much nicer car / overseas holiday / retire early in the later stages of live. Takes a small pebble to create a snow ball then turn into an avalanche.

      • netjock on 08/01/2021 - 11:19
        +11

        Most people would rather pay the extra tax and spend it now. No point being 55 and driving a nice car.

        • [Deactivated] on 09/01/2021 - 02:03

          Agreed. Also some people don’t mind paying a bit more tax.

        • serpserpserp on 09/01/2021 - 19:55
          -2

          Yep. Don't want to drive a rice rocket in your 40s even.

      • stringbean402 on 08/01/2021 - 18:39
        +11

        There is also every chance you may die before you see your super. Life is for living… if you enjoy driving performance vehicles and have a passion for it then go for it !!

        You only get 1 chance on this big rock.

        • Chandler on 08/01/2021 - 22:01
          +14

          There is also every chance you may die before you see your super.

          if you enjoy driving performance vehicles and have a passion for it then go for it !!

          There's also probably some small correlation between these two statements

        • acersaurus on 09/01/2021 - 16:13
          +2

          Statistically there is a very high chance you will live to see your super (for those who don't have a life threatening illness).

          And if you're 65 with little to show for it, the idea of YOLO thinking when you were younger will be cold comfort if that was the cause of ending up with little. Potentially there is still a lot of life to live from 65.

          • [Deactivated] on 14/02/2021 - 05:40

            @acersaurus: You can access super from 60. :) And with the tax you can save you’re probably better off with a car loan + extra super vs paying for the car in cash and no extra super. Assuming you’re in a decent tax bracket..

            But hey you could die next week so spend all your money on hookers and blow.

    • acersaurus on 09/01/2021 - 16:08
      +1

      Ditto, because if I was ever that rich to justify it - even if I was a billionaire, id still rather buy a 30k car and give 30k to charity.

      That said cars aren't my hobby.

    • unhuman on 09/01/2021 - 16:51

      Depends on income. If you made 10 million after tax, you would drop 60k for a car.

      • acersaurus on 10/01/2021 - 07:48
        +2

        Well no I wouldn't.

        Did you know Warren Buffet lives in a house he bought for $31,500 in 1958 and eats breakfast from McDonald's every day.

        • dimes on 10/01/2021 - 11:44

          McDonald's isn't cheap nowadays

  • salrock on 06/01/2021 - 02:46
    +38

    Someone I known spent alot of money on cars when young. He regrets that now as he is near retirement and does not even fully own one small appartment .

    • apsilon on 06/01/2021 - 08:21
      +5

      I spent a fair bit on cars when I was younger and do regret some of it (did buy a $70k car in my mids 20s and that's one that does fall in the regret column) and would definitely advise others against it but I've been lucky enough to always have high disposable income and at least own my house in Sydney outright, managed my super and investments fairly well and am probably still 15 years away from typical retirement age yet could probably semi retire now if I wanted to.

      Any amount is relative to an individuals circumstance. Even today I certainly wouldn't be spending $60k on a used Euro vehicle but $60k on something new with the intention of keeping it long term is something I'd consider.

      • ihbh on 07/01/2021 - 18:36
        -4

        How old are you now?

        • Kamsi on 07/01/2021 - 20:58
          +3

          You can roughly guess.

    • oztite on 08/01/2021 - 13:24
      +1

      Depends… If you think about it very very carefully, allocate fund that you can def afford, take v good care of the car, buy as new (<1 y.o.) rather than brand new, and sell no more than 1-2 yrs later before next model release, then it may be worthwhile. I did exactly that in my 20s, lost about 10-20k in total driving 2 different $70k sports car, best decision ever. No regret whatsoever. I now make more and can prob afford it but have lost interest. I get more excited about the upcoming Kia carnival - something I had zero idea why anyone would ever buy when I was in my 20s.

    • The-Kremlin on 08/01/2021 - 23:38
      -2

      LoL his regret should not be regarding his cars, but his mindset. Even if he had no cars he'd still be in a very similar position…being near retirement and not fully owning his own small apartment.

  • Hybroid on 06/01/2021 - 03:10
    +106

    Beyond this website's hivemind, $60k isn't actually a lot of money for a car. It's a personal decision based on your needs, wants, living situation, income and choices. There's no right or wrong answer that suits all.

    I would be comfortable spending that much on a car as long as it's paid in cash (i.e. no loans) and have plenty more reserves that there's no current opportunity cost of being able to reasonably buy something else.

    Having said that, a 45 AMG looks impressive in your 20s but it really isn't. At the end of the day, it's a small car (albeit with decent engine), extremely stiff ride, high running costs, the pops and bangs get old quick and isn't a real AMG in many people's eyes.

    Focus on career and get a proper 63 AMG when you feel the time is right.

    • FocusRider on 06/01/2021 - 06:46
      +6

      I'd aim for an E63

        • FocusRider on 06/01/2021 - 09:22
          +39

          People who can afford these type of cars don't worry about fuel prices.. lol

          • picket23 on 08/01/2021 - 12:25
            +2

            @FocusRider: The ones that buy 10 yr old ones do

            • knasty on 09/01/2021 - 00:27
              +1

              @picket23: I picked up an early E63 to satisfy my midlife AMG 6.2L desire. <10L/100ks on the highway but around town is nasty; may have something to do with the constant acceleration and braking. I chit chat with the guy at the local service station to take my mind off the cost when I fill up but it's worth every cent having bought sensible cars for the last 20 years.

        • sd4f on 11/01/2021 - 06:00
          +1

          The true mark of being able to afford a mercedes is in being able to afford the maintenance. If you're worried about fuel, then yea, definitely gonna scream at an AMG. Generally your wearing parts cost a lot more; sporty brakes, expect to pay something like four times the cost of the regular model.

    • [Deactivated] on 06/01/2021 - 08:29
      -5

      $60k isn't actually a lot of money for a car

      The only time $60k doesn't seem like a lot of money for a car is when your property went up in value by hundreds of thousands of dollars thanks to continued government intervention in a broken market.

      But those who haven't been lucky to profit off an ever more exclusive property market don't have that kind of spare cash floating around.

      • Muzeeb on 06/01/2021 - 09:38
        +9

        It's only cash profit if you sell the property

        • macrocephalic on 07/01/2021 - 17:59
          +1

          Exactly. Your house going up in price allows you to borrow more, but it doesn't actually give you any money unless you can sell your excess house - that means either downsizing, moving somewhere cheaper, or selling an investment property.

        • zestorer on 08/01/2021 - 18:44

          Agreed, buy shares and sell a portion if you need the cash.

      • Jaystea on 08/01/2021 - 19:34
        -4

        You can always tell who the poor, lazy person with a self-serving entitled attitude is.

        • Griffindinho on 08/01/2021 - 21:47
          +1

          Just pull yourself up from your bootstraps

    • trapper on 07/01/2021 - 18:27
      +8

      $60k is a lot for a car, any way you look at it.

      • kaleidoscope on 07/01/2021 - 23:00
        +5

        it’s all relative

        • netjock on 08/01/2021 - 11:20
          +4

          Only 1.5 BTC if you actually have 1.5 BTC

    • RobotWizard on 08/01/2021 - 10:06
      +17

      Thank you, after giving it a bit of thought I think hat it's not a very wise decision so I'll happily drive the car I have hopefully for few more years

      • Logical on 08/01/2021 - 13:07

        You can consider getting it wrapped professionally and that will give you that boost to fall in love with what you got and be enough to cool a new purchase for a few years. Money well worth spent IMHO. Other cheap but effective ways to fall in love with the car again is to Plasti dip the wheels, a few pin stripes etc.

        • abb on 10/01/2021 - 17:55

          You said "stickers", but all I heard was "bolt-on turbo kit"…

      • [Deactivated] on 08/01/2021 - 21:07
        +1

        Get an i30n.

        Does all the same stuff cheaper, more reliable and without biting 30k of depreciation.

    • [Deactivated] on 08/01/2021 - 15:00

      I've seen 2015 c63s for mid 80s.

      If you're buying a cla45, I would get 2014 model for 40k!

      I've seen m4s for mid 50s and they were 180k new!!!

    • The-Kremlin on 08/01/2021 - 23:39
      +1

      Yes very much hivemind mentally especially when it comes to cars on this forum.

    • MementoMori on 11/01/2021 - 14:32

      Agree 1000% with the pops and bangs. Very tacky. It's quickly turning into the w@nkers car IMO.

  • GnarlyKnuckles on 06/01/2021 - 03:43
    +11

    Invest in (buy) property, and I mean primarily dirt/land (house optional on that land, but defo' do not buy an 'apartment' or anything that involves a 'body corporate' of any description). 'Muck around with' cars for fun/sh*ts and giggles. There's a very big difference between the two. The land you buy steadily goes up in value over the years. Sometimes, if you're lucky/buy well, it can go up a whole heap in just one or two years. Conversely, any car you buy goes down in value over the years … or costs you thousands to maintain/drive/retain its sale value, or both.

    • hoey888 on 07/01/2021 - 19:24
      +1

      another spin to it is when you buy property, you are buying the land. the house (structure) is free and a bonus. some are a bigger bonus/freebie than others.

      • Yawhae on 07/01/2021 - 23:31
        +1

        That's just stupid. Using that logic two houses next door to each other on the same size land should be equal value. One is a run down, asbestos riddled shit hole. The other is a 5 bed 3 bathroom with high end furnishings… I wonder which would cost more.

        • Munki on 08/01/2021 - 02:26
          +7

          Nah mate it's the vibes and the serenity. And Mabo.

        • GnarlyKnuckles on 08/01/2021 - 20:34
          -1

          That's just stupid.

          No offence hozmo, but it is a tad … erm … 'simplistic'. Think about somewhere where land is relatively 'dirt cheap', for example. On beautiful Russell Island (or thousands of other similar non-capital-city locations around Australia) you can buy a decent block of land for 20K. That same block with a new house on it though, will cost you an absolute minimum of 200k.

        • sakurashu on 10/01/2021 - 15:33
          +2

          It's simplistic but accurate when looking at an increase or decrease in asset value which is what the discussion was about - the actual value of a house is pretty static and will depreciate over time as it gets older/more run down but the value of the land is appreciating. If you're looking at it from purely an investment perspective the house is almost irrelevant…

    • 10fps on 08/01/2021 - 17:06
      +1

      Any car goes down in value over the years ? This is not a true statement at all. Many cars have appreciated. Even some early 2000 cars have appreciated.

      • GnarlyKnuckles on 08/01/2021 - 20:27
        +1

        10-frames

        Even some early 2000 cars have appreciated.

        That's interesting, can you tell me a few of them?

        I am absolutely not doubting you (I know jack about cars, virtually all I know is that I like my old Ford MKII; fragile ignition system and now essentially absent 'central locking' system and all) … I would genuinely like to know which cars that are less than 20 years old have actually appreciated in value though. Are you talking about a select few high-end limited-issue sports cars?

        • spacemannn on 08/01/2021 - 23:27
          +7

          The only cars appreciating in value would be the sports cars. Nissan Silvias are appreciating like crazy, s15's being the early 2000's version of the Silvia range, they were going for $13,000-$16,000 a few years ago, now they're worth $35,000~+. one of the most popular cars that has absolutely skyrocketed is the Skyline GTR34. If you owned one when they were 30k a few years ago (people were saying it's ridiculous to pay that much for an old sports car) you'd be laughing all the way to the bank. They're worth upwards of $200,000~ now. The more basic versions, R-34 GTST's were worth around $15,000 back then. Now they're at $35,000~ plus, assuming it's a Coupe and a manual. Hell, even the non Turbo R34 GT version is expensive as hell now if you get it in a coupe/manual combo.

          • MrFunSocks on 11/01/2021 - 09:42

            @spacemannn: I really regret not buying a near stock R32 GT-R 15 years ago when I was looking. Bought a ~4 year old WRX instead as the GT-R was already ~15 years old. The only ones on car sales now are pushing 100k for a car that was <$20k then.

        • whitelie on 08/01/2021 - 23:44
          +3

          HSV's have gone up for sure. Combination of Holden closing and COVID. Depends which model but the rarer ones have gone up substantially. I've got a 2002 GTS which I've had for about 15 years. Purchased for 45k back then, probably went as low as 30k over time but now would easily sell for 80+. Rarely see them for sale, last couple went over 100k.
          Late model (2013 onwards) Gen F's have turned around quickly. I was looking at getting a GTS or Senator a few years ago, could grab one for about 60k. Now they're 90-100k. 2017 GTSR's were about 100k new, now they're fetching north of 150k. 50% gain on something that should have dropped 50% in that time is pretty crazy!

          • GnarlyKnuckles on 09/01/2021 - 00:59

            @whitelie: OK wow, thanks for the information you two. Assuming that it's all true/legit, my answer to the OP has now changed completely, to this:

            'At what point would you be comfortable with dropping $60K into a car ?

            Answer:

            At the point where I thought I knew enough about the car to have a reasonable expectation that it would actually appreciate in value substantially every year, rather than depreciating in value.

            There is a proviso though. I wonder how much $$$ the owners of these very select few 'appreciating sports cars' have been required to spend on running them day-to-day, maintaining/servicing them, and insuring them over the years … but in turn, I guess that also has to be weighed against the joy they have had driving them …

            Anyways, what recent model sports cars do you two (Spaceman and Whitelie) 'tip' are going to increase in value over the next decade or so?!?

            • whitelie on 09/01/2021 - 01:22
              +1

              @GnarlyKnuckles: HSV's are a hard one, I think the price has driven up substantially in a very short period of time, so no idea if they will keep trending up or come back down before going up. They don't make them anymore, so long term I think they will go up but not sure I'd buy one now for investment. IMO it's very hard to gauge what may go up and if you've already missed the boat on some models. I don't think it's wise to purchase a car to make money on, purchase it for the enjoyment it brings. Better off throwing the money in the stock market somewhere if you want to make money but that's just my 2c.

              • GnarlyKnuckles on 09/01/2021 - 01:28

                @whitelie: LOL, okay cheers … not sure about the stock market (the word 'crash' scares me!), so I guess I'll stick with the old faithful idea of 'dirt' (property/land; in my case cheap stuff with no house on it).

                Nowhere near as fun as a flat car though :(

                I was hoping you would be able to direct me to a reasonably new-model sports car that I could 'invest in' AND 'rip up the streets' with … no such luck I guess … :(

                • Toneszzz on 09/01/2021 - 12:15
                  +3

                  @GnarlyKnuckles: My best guess for a reasonably new sports car that would appreciate or at least hold value well would be the new GR Yaris. If you were lucky enough to pre-order the first 1000 cars @ $40K, you would've 'made' around $10k as people are already selling theirs on Carsales for $50ish K (as the normal price starts at $50K after the introductory offer). The good reviews that have come out have also built hype and demand for it. E.g. TopGear gave it a 10/10 (only 6th car to get that score, joining cars like the LaFerrari, McLaren P1). Also for WRC homologation, Toyota are only required to produce 25000 cars (may make more) and apparently dealers are already struggling to meet demand in Aus (cannot confirm anything as I only saw forum and fb posts about this).

                  So good reviews + high demand (?) + limited quantity (?) + Japanese = IMO a car that will at least hold value/ not depreciate as fast, or possibly appreciate but that's just my opinion.

                  • GnarlyKnuckles on 09/01/2021 - 21:26
                    +1

                    @Toneszzz: You're a legend Tones, thanks for this insightful/knowledgeable response. This forum has really taught me something about buying sports cars … it is not necessarily a 'money sink'.

                    I bet there's some good mechanics out there who specialise in working on sports cars, and actually make bulk cash by buying them, tuning them up, then flipping them sometime later at a good profit … all the while getting to spin around in them …

                    Man, I chose the wrong profession :-(

        • 10fps on 10/01/2021 - 11:36
          +3

          @GnarlyKnuckles

          All these replies are spot on, they are future classics. In basic, some factors that help with the appreciation are but not limited to; being an honest fun car to drive, discontinued product lines, limited models and a plethora of highly raved reviews. However with these future classics, they will depreciate to a point where there is a "bottom" in price before it rises and that may take a few years or decades to realise or even see.

          In regards to the cost of owning one, It is definitely heavily in favor of joy and entertainment. Some of these early 2000 cars will reach 25 years soon which the VIC state will allow the vehicle to be registered for club permit which is defined "to make limited non-commercial use of eligible historic vehicles on the road network", thus reducing the yearly registration substantially. I am sure other states have something similar.

          And with all classics, you cant walk into a dealership and buy them new.

        • surg3on on 11/01/2021 - 10:09

          There is a reason the Tax Office does not let you claim cars as an investment as they almost always lose money.

  • garetz on 06/01/2021 - 04:32
    +9

    When i had 20x the investment capital.

    • od810 on 08/01/2021 - 01:00

      Ha! I have similar thing. I wont spend more than 5% of my networth on car.

      • AncientWisdom on 08/01/2021 - 11:39
        +5

        My net worth is 400k in debt. Should I sell my car?

        • bio on 08/01/2021 - 12:10
          +8

          Yes, but don't sell it for more than 20K.

        • The-Kremlin on 08/01/2021 - 23:41

          Are you serious?! That's your net financial position? ie. Selling all assets and paying off all outstanding debt…that is what your financial net worth is.

  • Jugganautx on 06/01/2021 - 06:14
    +17

    When 60k isn't a house deposit anymore.

    • [Deactivated] on 23/01/2021 - 22:49

      Just enough for stamp duty in Sydney, might be some change left for a Honda Jazz.

  • ilikeradiohead on 06/01/2021 - 07:14
    +14

    The first car I bought was $16k and I was making like $64k, so… If I had a $240k income?

    Alternatively I would also purchase a $80k car on my $50k graduate salary as an investment in myself 😁

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