"Affordability" and a new car

[Closet_Gamer]

I generally don’t want more than 1-2% of my net worth depreciating in my driveway.

That said, I love nice cars.

This is why I buy used and shop very hard for them. I currently have a 2017 Porsche, 2018 F150 and 2017 Mazda CX-5 Grand Touring. Picked up the CX-5 and Porsche in 2022 and the F150 this year.

Each had about 30k miles on them. And they were pristine. Not a scratch inside or out. All had clean Carfaxes. None of them had major model changes in the intervening years. Features depreciate faster than cars, so by buying what were the high end 2017/2018 packages, you get most of the same stuff as an upper mid-range package today. Not all, but most.

They were essentially new vehicles and I got multi year bumper-bumper warranties on the Porsche and CX-5.

Vs new pricing?
Porsche 25% less
CX-5 25% less
F150 50% less

But … I shop very hard for my cars and have twice driven 50 miles to more rural Porsche/Audi dealers because I found the right car at the right price.

So … to the original question …

1-2% of net worth but I drive nicer than that with research and some shopping.

 

[SecondCor521]

How will you drive this car? How often?

It would be my daily driver.

Do you have any other criteria outside of % of net worth?

Yes, but I didn't need input on those. Thus this sentence in the OP, emphasis added:

"Setting aside all the other factors, there is the key question of how much I could spend / want to spend on this car."

The Lexus I drive now, by the way, was a hand-me-down gifted from my parents in 2014. Before that I drove a 1995 Toyota Corolla, before that a 1985 Oldsmobile Cutlass Ciera, before that a 1973 Chevrolet Impala. So I'm not exactly a car guy.

 

[Midpack]

"Setting aside all the other factors, there is the key question of how much I could spend / want to spend on this car."

NW isn’t good for a rule of thumb. If your NW is low, you’ll have to spend more as a % - and the converse. If cars are important to you (any number of reasons), you’re likely to spend more as a % - and the converse. It you’re a one car household, you should probably spend more than a bare minimum. If you have 3+ cars, you’ll most likely have a higher % of net worth. You can spend as much as you are comfortable with, that amount means nothing to many/most others. It appears you’ve never spent anywhere near your means in the past, do you want us to approve a Ferrari now?

 

[Dtail]

My BMW Z4 is slowly breaking down, so driving it only 4k miles a year. Still love sports cars, so we shall see.

 

[Route246]

I generally don’t want more than 1-2% of my net worth depreciating in my driveway.

That said, I love nice cars.

This is why I buy used and shop very hard for them. I currently have a 2017 Porsche, 2018 F150 and 2017 Mazda CX-5 Grand Touring. Picked up the CX-5 and Porsche in 2022 and the F150 this year.

Each had about 30k miles on them. And they were pristine. Not a scratch inside or out. All had clean Carfaxes. None of them had major model changes in the intervening years. Features depreciate faster than cars, so by buying what were the high end 2017/2018 packages, you get most of the same stuff as an upper mid-range package today. Not all, but most.

They were essentially new vehicles and I got multi year bumper-bumper warranties on the Porsche and CX-5.

Vs new pricing?
Porsche 25% less
CX-5 25% less
F150 50% less

But … I shop very hard for my cars and have twice driven 50 miles to more rural Porsche/Audi dealers because I found the right car at the right price.

So … to the original question …

1-2% of net worth but I drive nicer than that with research and some shopping.

I shop cars like you. We have two normal cars and I have one "supercar" in the garage. It is rare and slowly appreciating in resale value so I don't disclose the make/model as I wish to remain anonymous here since we are stealth with our wealth. I'm curious about your Porsche experience. I have no experience with them but I am interested in getting a nice 911-class car. There is no budget and a GT3 would be nice but the waiting list is too long so it will probably be one with a reasonable waiting list. A colleague just got one but he had to pay top dollar for a used one. I don't want to go that route since this one will be a garage queen and only driven sparingly and I want to maintain resale value. I plan to tune and modify if necessary, especially the exhaust and suspension. Do I just go online and configure and order one or should I go to a dealer (a very unpleasant thought) and waste time with a sales rep? I've been playing with the configurator and I sort of know what I want but is an in-person sales call necessary? I detail my own cars and our vehicles, like yours are all in pristine condition.

 

[Aerides]

I don't worry so much about setting a budget, and it's not an affordability question - as few things really are.

It's more "what am I willing to spend" and that's very different from my financial picture. I have a mental hurdle on some things, which is probably set from too long ago, ie, a nice car should cost around $30-$35. So, even knowing this is outdated thinking, I'd still have a hard time going over $50 even if I really wanted the car.

That said, I won't skimp and I have some things I will always like and want:
Leather seats with heating, but not black, I'm partial to the kind with the little pinpricks
A sun/moonroof
Good security features and rearview camera
No built in GPS

I like to keep cars about 10 years, and I like comfort, so I'm willing to spend what is needed to drive a car I'm going to like for a while.

 

[Closet_Gamer]

I shop cars like you. We have two normal cars and I have one "supercar" in the garage. It is rare and slowly appreciating in resale value so I don't disclose the make/model as I wish to remain anonymous here since we are stealth with our wealth. I'm curious about your Porsche experience. I have no experience with them but I am interested in getting a nice 911-class car. There is no budget and a GT3 would be nice but the waiting list is too long so it will probably be one with a reasonable waiting list. A colleague just got one but he had to pay top dollar for a used one. I don't want to go that route since this one will be a garage queen and only driven sparingly and I want to maintain resale value. I plan to tune and modify if necessary, especially the exhaust and suspension. Do I just go online and configure and order one or should I go to a dealer (a very unpleasant thought) and waste time with a sales rep? I've been playing with the configurator and I sort of know what I want but is an in-person sales call necessary? I detail my own cars and our vehicles, like yours are all in pristine condition.

Curious what the other car is!

A used Porsche takes time to buy in my experience.

I was looking for Boxster.

I probably spent 90 days on it. In that time I looked online at every used boxster in every configuration within 100 miles of the house. I also visited four car dealers (two Porsche and two who specialize in high end used cars).

After about 30 days I had nailed my “must haves” and understood how the feature packages had changed over time. I also had a decent sense of the market price. Then it was a game of waiting for the right car.

The right one popped up at a third Porsche dealer in a rural town about 50 miles from my house. Did a test drive (where I almost spun the car accelerating onto a freeway ramp LOL) and then went two rounds of negotiation via email. I was happy with the final terms of the deal and it is the nicest Boxster I sat in through the whole experience. I took it to Porsche for scheduled maintenance and even the Porsche staff went to the window to look at it.

My experience with the Porsche dealers was all first rate. Super professional and all people who seriously like cars. Top marks to one sales guy who told me that the used Porsche market is fickle. He told me straight up that if I saw what I wanted I should grab it whether it was from him or not. He didn’t get the sale but his dealership will get to do all the work on this car.

Hope that helps!

 

[38Chevy454]

Buy something that puts a smile on your face, instead of just a transportation appliance. A smile when driving, or when looking at it.

 

[RunningBum]

I've never thought to use a % of NW or anything like that for a new car once I could afford anything I want. I've generally bought a new car every 7-9 years. I figure out what I need and want, and look at cars that match that, and compare them. I don't mind buying a more expensive car, but only if I'm getting something worthwhile out of it. Subaru Outback fit the bill for me last time. I'd have been willing to spend double or triple but I don't think I'd have liked it any better. I could rationalize spending more for an Outback over cheaper cars. More expensive cars had drawbacks to me or didn't offer me anything more than I'd have with the Outback.

 

[Lagniappe]

I just picked up my new car today. I am one of those people who puts a monthly amount in a sinking fund for the next car purchase. I assume I will buy a new car every 7-8 years with no trade in value, and budget accordingly. The amount set aside is approximately 4% of my spending. Therefore 4% of the withdrawal from my portfolio each year. Based on your personal withdrawal rate, you can calculate how much of your portfolio that represents.

By the way, I got a Volvo EX30 Extended Range Ultra. My first electric car, and there is quite a learning curve, but so far it is really fun to drive.

 

[Wyoming Car Guy]

Retired car dealer here-Personally I would go right back to a Lexus! Reliability and service on new is unmatched from what I seen. Lexus is basically a high end Toyota with a lot better fit and finish ( I like Toyotas also).

 

[DrRoy]

We spent what we needed to. Got what we wanted - Toyota Highlander Hybrid.

 

[Out of Steam]

There's been significant safety improvements in cars since the early 1990's - anti-lock brakes, better air bags, side air bags, tire pressure monitoring, improved crash testing, back-up camera, collision avoidance systems and more. So think of it as an investment in safety.

Over the years, two of my brothers-in-law have ended up in intensive care after crashes where they were using a decades-old car as a daily driver. In both cases, I suspect that their injuries would have been minor in a new vehicle.

Safety improvements add up over the years. IMHO, at about 20 years old, a car should be limited to being a weekend or spare vehicle, rather than a daily driver.

 

[Out of Steam]

I generally don’t want more than 1-2% of my net worth depreciating in my driveway.

That said, I love nice cars.

This is why I buy used and shop very hard for them. I currently have a 2017 Porsche, 2018 F150 and 2017 Mazda CX-5 Grand Touring.

We have cars costing close to 5% of our net worth in our driveway right now, and it seems like a failure of planning. Though we're enjoying both, one a Mazda CX-5.

I've always been inclined towards a lot of driving, including a long commute for my last 12 years at work. The habit seems to be intensifying, as I've only been on one domestic airline trip in five years of retirement.

 

[old medic]

Setting aside all the other factors, there is the key question of how much I could spend / want to spend on this car.
For those of you who have been retired for a while and are financially comfortable, how did you approach the question of budget? Percentage of NW? Percentage of taxable? Just spent whatever?

We have only ever bought 2 "NEW" cars... 1988 and we got a 2012 Jetta that now has 175K miles on it. Other current truck 2005 Silverado that's pushing 300K miles. I have invested time and money into this "tool" over the years, and considering replacing the engine over the truck.
The question about how much? Easy... What you need to spend to get what you want and need.
We just bought our grandson a new dirt bike, Have the cash available. In looking around, NEW vs USED didn't save much, plus much better warranty. And a 1.95% interest offer made us let them pay now, and leave our money at the bank.

 

[Wyoming Car Guy]

We spent what we needed to. Got what we wanted - Toyota Highlander Hybrid.

Great choice-They get really good mpg

 

[CO-guy]

We drove a Subaru Forester for a decade as our only vehicle. When it met its fate one evening, along with a deer, we purchased the least expensive 4x4 available on the market new. That was nearly 7 years ago and it's performed great as our only vehicle. Now that it's getting older, I'm looking at a PHEV minivan as our second vehicle. It's a small enough battery that I can build my own solar charger, and most of our trips are either under 10 miles in town or long road trips, so a PHEV minivan would shine for both.

 

[Texas Proud]

Which minivan are you looking at?

 

[monte1022]

My BMW Z4 is slowly breaking down, so driving it only 4k miles a year. Still love sports cars, so we shall see.

Was the Z4 worth it? I'm yearning for a sports car while it can still be fun for us. I had a 325is in the early 90s and absolutely loved it, but practicality finally won out and it was replaced with a Subaru Legacy. Used Z4s can be had for high 30s low to low 40s which is ok by me.

 

[jollystomper]

We spent what we needed to. Got what we wanted - Toyota Highlander Hybrid.

That is also the main new car I am looking at. Supply in our area has increased over the last several months. How do you like it so far?

At age 66, I am looking less at "affordability" and more at "this could be the last car purchase I ever make", as I tend to hold onto cars as long as I can. So why not "Blow that dough"? ?

 

[Koolau]

That is also the main new car I am looking at. Supply in our area has increased over the last several months. How do you like it so far?

At age 66, I am looking less at "affordability" and more at "this could be the last car purchase I ever make", as I tend to hold onto cars as long as I can. So why not "Blow that dough"? ?

Heh, heh, elsewhere on the Forums, I've told the story of my friend, who around age 70 bought his first "Last new truck." He died at 86 on his third "Last new truck."

 

[Dtail]

Was the Z4 worth it? I'm yearning for a sports car while it can still be fun for us. I had a 325is in the early 90s and absolutely loved it, but practicality finally won out and it was replaced with a Subaru Legacy. Used Z4s can be had for high 30s low to low 40s which is ok by me.

Yeah was worth it. Have it since 2010. Basically one can expect around 90 to 100k miles without many issues.
Very good acceleration plus hard top convertible. Accommodates a 6 footer with no issues.

 

[CO-guy]

Which minivan are you looking at?

The Chrysler Pacifica. Barely a year ago they were selling over sticker. Now you can get them with low-miles off-lease for around $30k.

 

[MarieIG]

Well, I don't think I ever thought about it in terms of percentage of NW or WR. Also, I not a car-gal, and have driven some amazingly run down vehicles (formerly known as bombs) back-in-the-days-of-next-to-no-money. I have always paid cash. My general guidelines are:

- pay cash;
- have liquid cash available in case there is an urgent need to purchase a vehicle;
- look for something safe and reliable.





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[walkinwood]

If you're spending 1% of your stash each year, IMHO, you're over thinking this.
Option 1: Get today's version of your current car. You'll be sort of familiar with it, but cars have changed a lot in 30 years.

Option 2: If you don't drive a lot or do long distance driving and have a garage, consider an electric car.

Automobiles are in a transition. Today's electric cars will probably not last 30 years though there are some very old Priuses still on the roads. On the other hand, it may be difficult to keep gas cars, with all their computerized controls, going for 30 years too as manufacturers move on.