News

Budgeting towards a super car

Discussion in 'General Automotive Discussion' started by Speedy 33, Jun 28, 2020 at 1:56 AM.

  1. Speedy 33

    Speedy 33 Rookie

    Saturday
    3
    Full Name:
    Glen
    Hey everyone,

    I wanted to ask about budgeting towards a super car, I have a full time job and a house and ever since I was a kid I always wanted to aspire to owning a super car one day. I actually want something that is practical that you can drive fast and comfortable and I am thinking of either a F-12 or Hurican. I am wise with money but don't come from a family back ground where I am rich. I am guessing some of you have been in my same shoes, honestly is there any tips or guidance towards saving for super car. Honestly I would like to own both in the ideal world because to me they are both nice cars.
     
  2. EastMemphis

    EastMemphis Formula Junior
    Silver Subscribed Owner

    May 25, 2019
    541
    Memphis, TN
    Full Name:
    John
    I've pretty much always had a fun car to play with. My rule, throughout my life, has been to only buy fun cars with "extra" money. Buying fun cars is like gambling. If you can't afford to lose it all, don't play.

    So if you want my advice, it would be this: Only step into this world if you have the cash to buy one without a loan, and, have at least 20% of the car's value that you can hide away for when things aren't working right. These cars can suck out a large wad of cash from your wallet at the drop of a hat. Be prepared for that and it won't hurt so much when (not if) it happens.

    Some argue that it's better to take a loan for a fun car and use that cash to work for you. To me, regardless of the reason, if you need to take out a loan for a fun car, you're making a mistake. It should be costly to buy one of these cars. It should put a dent in your cash reserves. It should be something you think twice about. And when the day comes to sell it, you shouldn't have to worry about recouping your loan value. It likely isn't going to happen.

    Fun cars are a sunk expense. Consider it that way and you'll enjoy it far more.
     
    Shark01 likes this.
  3. ttforcefed

    ttforcefed F1 World Champ
    Rossa Subscribed

    Aug 22, 2002
    12,910
    how old are you and how much disposable money do you have to put towards the cars?
     
  4. ferrariwithsnowtires

    Dec 17, 2005
    119
    I am a top line kind of guy
    That means building income
    Can you do this within your profession?
    If so great, promotions and company switches help. I am late in my career, 15 years ago I changed companies, and a couple of years later took another job with a relocation and make nearly 4 times what I did 15 years ago.
    I also started my side hustle 21 years ago in rental real estate. That hobby job grew to dwarf my day job
    In wealth creation (that is the big message), If you can increase how much you have coming in, you improve your ability to save/invest in general.
    Last category, letting the market help. I am no great stock picker but I look for situations that make sense. About 8 years ago I bought Apple as their price seemed low to me ($140, which then split 7 to 1 and is now like $350). Sometimes this **** is staring at you. At work we have some terrible IT systems. I figured the ones that aren’t terrible would be worth looking into. I started by watch and waiting on Concur. Oops it got bought out. So maybe my idea is ok. I start watching Workday but the price jumped too far and I passed (oops again). Next up was Veeva System. I bought that at $40 and it is now around $240. My current play is Ping ID.
    Bonus round. Maybe some one you know is at a really good company or a hot industry/segment. My in-laws invested in Genzyme when I started there in the 80s. In 25 years their return was about 52X. Now move to this generation. Our older son is in big data. So I come up with a short list of companies with Trade a desk as the top candidate. He disses them and I don’t buy. They were at $50 and now $400. After they started climbing I was like this is a good space, let’s keep looking and I found Alteryx. I bought at $30 and it went to $160.
     
  5. Shark01

    Shark01 F1 Rookie

    Jun 25, 2005
    3,524
    I am very similar to you in background. My first job out of high school was a janitor. Even today, I'm just a rank and file Engineer....nothing special.

    But I currently own 2 supercars, a 1999 Lamborghini Diablo Roadster and a 2005 Ford GT. So looking at my choice of cars is my first piece of advice:

    1. Don't buy cars undergoing massive depreciation (F-12 and Huracan fit in this group) - I can't afford to lose 10s of thousands of dollars to depreciation every year, and I suspect the same is true for you.

    2. Buy the most special car you can afford - Sorry to say, but neither of your choices are special for an exotic in any way. My Diablo is just 1 of 142 ever made in this configuration (one year design), and while they made 4,000 FGTs its one of the most sought after modern collectibles. I caught the Diablo at the right time and its value has risen 75% since I've owned it......compare that to the current value of the brand new 2012 Gallardo I almost bought at $208k.

    3. Pay cash if at all possible - Buying one of these on a working man's salary requires a buttload of work.....and it should be hard and painful. It took 9 years of sweat and saving for the Diablo and 6 years for the Ford GT....paid cash for both so I have no worries....except picking which one to choose for a drive.

    Image Unavailable, Please Login
     
    anunakki and Natkingcolebasket69 like this.
  6. Ianjoub

    Ianjoub Formula Junior

    Dec 22, 2019
    496
    Homosassa, FL USA
    Full Name:
    Ian Joubert
    I am retired and have a pretty good passive income. I bought my 458 with 25% down because I didn't have a $200k lump sum. I will have it paid off in under 1 year though. I was always a save money then buy guy, but now my time is short. I am willing to pay a few $$ in interest to have what I want now while I can still enjoy it.
     
    Shark01 and Natkingcolebasket69 like this.
  7. Natkingcolebasket69

    Rossa Subscribed

    Good advice that being said a couple things:
    1-his car choices are different than yours, like for me the ford and the diablo don’t do much and he might from a different generation so maybe the f12 and The huracan appeal to him the same ways those olders Cara appealed to u
    2-why but cash if right now he wants a newer model? Seems to me that putnam leasing and PfS are better suited , plus he won’t lose all the depreciation


    Sent from my iPhone using Tapatalk
     
    Shark01 likes this.
  8. ferrariwithsnowtires

    Dec 17, 2005
    119
    Nat,

    I loved that you brought these points up

    The OP might help us by outlining if these are going to be life keeper cars or entry points to be moved out of later (2yrs, 5yrs, pick a number)

    Leasing could certainly allow an earlier entry point in time. We just have to understand if that is his desire

    Since he started with the "budgeting towards" point, my assumption is that he wants to both have some cash to put into the transaction and understand how to swing the ongoing costs (loan or lease payment, insurance, maintenance, loose cash for an unforeseen catastrophic failure, etc..). I loaded up on points about how to get yourself from today, to I don't give a **** what it costs, give me the keys.
     
    Natkingcolebasket69 likes this.
  9. ttforcefed

    ttforcefed F1 World Champ
    Rossa Subscribed

    Aug 22, 2002
    12,910
    does anyone find it odd that a guy wants to buy an expensive car but doesn't know how to spell its name?
     
    EastMemphis and SirPouyan like this.
  10. Shark01

    Shark01 F1 Rookie

    Jun 25, 2005
    3,524
    #10 Shark01, Jun 28, 2020 at 9:37 PM
    Last edited: Jun 28, 2020 at 9:43 PM
    Point taken and understood on #1, and his final choice can be whatever of course, but when a guy asks about budgeting, the natural assumption is that he needs to make every dollar count.....in that case you don't buy a car that bleeds money. I like the newer cars, its just not smart for a guy in my financial position to buy one.

    I personally think financing a depreciating car is just madness unless someone has a level of wealth that is akin to me financing a Kia Soul, or a special circumstance health wise as mentioned above. And make no mistake, the guy that leases a car is paying every dollar of depreciation over the term plus more. These leasing companies aren't in the game to break even.

    Any why strive to pay cash? Do I really have to go into that for a guy that inquires about budgeting help?
     
  11. Shark01

    Shark01 F1 Rookie

    Jun 25, 2005
    3,524
    Sorry to hear, hope things turn around for you.
     
  12. Ianjoub

    Ianjoub Formula Junior

    Dec 22, 2019
    496
    Homosassa, FL USA
    Full Name:
    Ian Joubert
    No, sorry for the misrepresentation. It isn't all that grim. I am 50. Congestive heart failure runs in the men in my family. I am healthy, but don't imagine I have 20 more years...
     
    Shark01 likes this.
  13. Shark01

    Shark01 F1 Rookie

    Jun 25, 2005
    3,524
    You are indeed the man.....I didn't even notice that....so should that be step #1 on the exotic car buyer's list?

    I was watching you tube SUV review videos with the wife when we came across a Alfa Romeo Stelvio Quad....Quadr......Quadrif.......aww hell, just forget about it.
     
  14. Shark01

    Shark01 F1 Rookie

    Jun 25, 2005
    3,524
    Glad to hear you are healthy today.
     
    Ianjoub likes this.
  15. Speedy 33

    Speedy 33 Rookie

    Saturday
    3
    Full Name:
    Glen
    Sorry I was never the best at spelling at school, There is some really good advice and appreciate the advice. Shark 01 I am glad you managed to work towards getting your dream cars and can enjoy them. I am in my late twenty's and a little over 6 foot tall and I can appreciate that the vehicles over time will lose money, looking at the market I see they reach a certain point and will hold its value and even may go up in value. In terms of how long do I wish to hang onto the cars. I am guessing if i do happen in my life to own them maybe 6-7 years then move on to the later models if I like them. I am just trying to work hard, save so one day in my life. I was just wondering how other people manage to do it, like Shark we don't all have huge paying jobs or come from wealthy families.
     
  16. Shark01

    Shark01 F1 Rookie

    Jun 25, 2005
    3,524
    In short, my car fund has been funded as much as possible from what I term as “Free Money”, which is money outside my normal income, that has no effect on family needs.....My total free money from the 6 year saving resulting in the Ford GT purchase was $153,952.....or 77% of the total purchase price including tax.

    My % free money from the Diablo purchase was like 54%, it don’t have the exact figure anymore.
     
    Natkingcolebasket69 likes this.
  17. Face76

    Face76 F1 Veteran
    Rossa Subscribed

    Aug 21, 2006
    6,945
    The Other Oz
    Full Name:
    M Wilborn
    I budget by expected cost per mile to purchase the car then sell and move on to the next purchase. Try to keep it in the low $1.xx per mile.
     
  18. Shark01

    Shark01 F1 Rookie

    Jun 25, 2005
    3,524
    Does this include depreciation?
     
  19. Ianjoub

    Ianjoub Formula Junior

    Dec 22, 2019
    496
    Homosassa, FL USA
    Full Name:
    Ian Joubert
    I would assume so by his description.

    I felt the same way so I determined that I would put 100k plus miles on my car to keep the cost per mile average down :D
     
  20. Shark01

    Shark01 F1 Rookie

    Jun 25, 2005
    3,524
    Yeah, but I can't think of too many true exotics that could be true for over a decent time period. Just the difference between buying retail and selling wholesale might eat up 10,000 miles or more at $1 per mile (10% of a $100k car). Then here in Texas we pay 6.25% just in tax.
     
    EastMemphis likes this.
  21. Natkingcolebasket69

    Rossa Subscribed

    Are those both keepers or maybe one day sell to take profits and reinvest?


    Sent from my iPhone using Tapatalk
     
  22. Face76

    Face76 F1 Veteran
    Rossa Subscribed

    Aug 21, 2006
    6,945
    The Other Oz
    Full Name:
    M Wilborn
    I don't count sales tax but I do count depreciation in the calculation.
     
  23. ferrariwithsnowtires

    Dec 17, 2005
    119
    Can you tell us an example of one of your cars where this worked for you.

    I keep thinking it would have to be something at appreciates like an air cooled 911 or a 3 pedal Ferrari
     
  24. Shark01

    Shark01 F1 Rookie

    Jun 25, 2005
    3,524
    I want to see several examples to see if that can help me.....
     
  25. Shark01

    Shark01 F1 Rookie

    Jun 25, 2005
    3,524
    The Diablo is a keeper for sure (owned it 6 years, 4,500 miles), until I can't drive it anymore. I'm still working on bonding with the Ford GT (2 months actual road time, 800 miles), but so far so good.

    But you're right about profits, I paid $182k for the Ford GT in February....but just last week a wrecked totaled car (not a fixed salvage car) you're buying in pieces sold for $168k....crazy
     

Share This Page