12-01-2014, 05:49 PM | #1 |
Private
27
Rep 70
Posts |
Can I afford a M235i?
Hi,
I'll be graduating from college with an Engineering Degree, and 70k starting in Houston. I was wondering if you guys think I can afford a M235i (M3 is my dream car). I will have $0 debt. Built a M235 how I want it and the lease with 36 months, 12k miles w/ 2800 down is $576. With tax and everything, I'm assuming $615/month. This is a rough calculation, 70k after tax is like $59k, or $4,900/month. Rent: $939 Utilities (Gas, Internet, Cell Phone, Electricity): $450 Food: $450 Car (lease payment with gas, insurance for 22yr old): $1000 Clothes: $150 Health Insurance: $550 Entertainment/Gadgets: $300 Saving: $1000 Total: $4839/month Was wondering if you guys in the real world think this is an accurate estimation for a 22yr old. |
12-01-2014, 08:20 PM | #2 |
Major
56
Rep 1,464
Posts
Drives: 2009 BMW 335xi
Join Date: Feb 2012
Location: Maryland
|
So taxes (fed + state) + social security and Medicare is more than 11k per year. It will be closer to 25% all together so take home pay will be ~$52k. Also don't forget 401k and other company benefits.
That being said I would wait at least a year so you can determine your actual cash flow. Real life never works quite as well as a spreadsheet. $600/MO is a big chunk of change. |
Appreciate
0
|
12-01-2014, 08:36 PM | #3 |
1Addict
3233
Rep 7,894
Posts |
No you really can't. I'd wait a year and try to get one used. Plus IMO paying down on a leased (rented) car is a horrible financial decision at your stage.
__________________
|
Appreciate
1
|
12-01-2014, 08:55 PM | #4 |
Private
27
Rep 70
Posts |
Thanks guys.
I redid my tax estimates, and my monthly should be 4,485. I plan on saving 1,500/month (includes 401k on my part), rent will be 1,000. Utilities 500, health insurance 300. That leaves me with ~1485/month. What would you reccomend spend monthly on cars if they're a car enthusiast? I was thinking 500month payment + 120 gas +120 insurance leaves me with $700 after everything, but I don't think this is smart. This will be my first time living (other then college) in the us. Thanks |
Appreciate
0
|
12-01-2014, 09:39 PM | #5 |
Major
56
Rep 1,464
Posts
Drives: 2009 BMW 335xi
Join Date: Feb 2012
Location: Maryland
|
I have been out of college for 10 years and have never had a car payment over $400. I have also owned a prelude, sti and two 335s during this period. In all cases, keeping my payment low allowed me to mod the cars, take up other hobbies like mountain biking, pay for a wedding and still save money. I would recommend saving up enough so you can put 20% down on a used car that meets your needs and wants.
|
Appreciate
0
|
12-01-2014, 10:03 PM | #6 |
Oh rly?
46
Rep 339
Posts |
Why is your health insurance so much? Are you paying by yourself out of pocket?
Also what is the point of having a nice car if your monthly gas allowance is $120, it should be at least twice that... And yes as others have mentioned, lease is a horrible idea for someone in your situation. Oh and being out of school, living in Houston and owning m235i I can guarantee you insurance will be more than $120 a moth. Living in the loop in Houston is very expensive, when I lived there I probably couldn't afford my 335i before I moved out to suburb ... And got a better job |
Appreciate
1
|
12-01-2014, 10:29 PM | #7 |
Lieutenant General
2286
Rep 12,565
Posts
Drives: Z4 M, X5, GX460
Join Date: Apr 2008
Location: CT
iTrader: (99)
Garage List F15 X5 xDrive35i [8.75]
E86 Z4 M [10.00] F10 550i (Retired) [9.17] F25 X3 xDrive35i (R ... [9.43] E82 135is (Retired) [9.50] E85 Z4 M (Retired) [9.41] E90 328i xDrive (Re ... [9.25] E86 Z4 3.0si (Retired) [9.24] |
Unless you count the $1000 savings towards retirement, you need to fund your 401k first before any lux car.
|
Appreciate
0
|
12-01-2014, 11:22 PM | #8 |
Banned
1130
Rep 4,686
Posts
Drives: L'Orange
Join Date: Jul 2013
Location: Brooklyn, NYC
|
get a used 135. way more direct and entertaining than the bloated 235 and waaaaay cheaper.
|
Appreciate
0
|
12-01-2014, 11:52 PM | #9 |
Captain
145
Rep 917
Posts
Drives: 2015 BMW M Sports Convertible
Join Date: May 2005
Location: Auckland New Zealand
|
Get a house first and pay cash for your cars. Their is a lot of really great second hand BMW's out their.
Paying rent and car payments is dead money. If you save and buy a house you can rent out the spare bedrooms and you'll enjoy having the freedom later on to buy what you like. |
Appreciate
0
|
12-02-2014, 02:16 AM | #10 |
Captain
157
Rep 965
Posts |
Do you get a year end bonus? You'll need to work for a while and build some credit before BMWFS will lease this car to you. First auto loan is the hardest to get.
If you haven't graduated yet...I'm a bit surprised $70k is starting for an engineer...is this a petroleum company? No offense but it seems a bit in the lower end. Maybe it's because cost of living and no state income tax in Houston is so favorable. Or maybe my expectations are out of whack. I'd say the paltry amount you can save now pales in comparison to how much money you can save when you're making substantially more. You're young and I'm assuming you're in good health. Live it up now while you can because there's no guarantee about tomorrow. People wait their whole lives for this idea that they can be happy one day. Why not be happy now. Granted 9 out if 10 ppl will tell you that's bad advice but the ones who decide to think out of the norm are the ones who either become mega rich or bankrupt and either way they'll have more fun doing so Last edited by onatuesday; 12-02-2014 at 08:56 AM.. |
Appreciate
1
|
12-02-2014, 03:39 AM | #12 |
Colonel
232
Rep 2,643
Posts |
A used 128i or 135i could be option if you must have a BMW.
128i is probably cheaper to maintain, so I would look at that. If you're slightly creative, I think you can find lots of fun ways to spend the money you save. Eg: travel and socialising. |
Appreciate
0
|
12-02-2014, 07:03 AM | #13 |
Private First Class
22
Rep 119
Posts |
I was curious and built a M235i. Can probably get one for 45K before TTL.
Any new nice car you get now will cost close to 30K. 15K difference is hardly much, with perhaps $200/month difference in the lease note. That shouldn't make or break a guy that makes 70K(before taxes). Going out on a couple of dinner dates with a chic could easily cost that. With that said, I would rather plan to purchase rather than lease. |
Appreciate
0
|
12-02-2014, 07:57 AM | #14 |
Major
469
Rep 1,320
Posts |
I think you should wait on it and actually start living down here. You'll find out that even though you budgeted for some things, other things are going to cut in.
I moved down here 6 months ago also with an engineering position (Petroleum engineering) and I do make more than you do (not trying to be a dick, only trying to prove a point), but still I find myself always having to re-adjust my budget, because i went over on some things i shouldnt have. So making payments on my M3, paying rent, utilities, groceries, gas, insurance, taxes, restaurants + bars really does cost alot down here. Be carefull, because your budget sounds a bit tight. PM me if you wanna talk about it, we're sorta in the same boat! |
Appreciate
0
|
12-02-2014, 08:23 AM | #15 |
Banned
472
Rep 928
Posts |
I took on an engineering job about 700 miles from my hometown. When I first moved here I was looking at an E90 M3, but I hadn't really established what my take home was actually going to be after taxes, as well as all my living expenses. I ended up selling my Rsx-S and buying the 128i. It's a great all around car and has been very reliable, although maintenance has still been costly.
In all honesty, I probably could have gotten an E90, but I enjoy doing a bunch of other activities that cost a bit of money, like going out to nice dinners, buying clothes, going out and buying a round of drinks for all my friends at the bar on the weekend. Things like that can tally up, and next thing you know, you are living paycheck to paycheck because you wanted a brand new car. It might be gratifying at first, but I feel way better about myself that I can max out my 401k as well as still put away money in my personal account week after week. Now that I've actually been here about 2 years and am comfortable with where I'm at, I'm now finally looking at a Cayman to purchase next year since I have everything in order, and I'm still young to enjoy it. Best of luck! |
Appreciate
0
|
12-02-2014, 08:23 AM | #16 | |
Major General
2452
Rep 7,341
Posts |
Quote:
http://www.bmwusa.com/Standard/Conte...teProgram.aspx
__________________
The views and opinions expressed in this post are those of the author and do not necessarily reflect the official policy or position of Bimmerpost.
2018 Jeep Grand Cherokee High Altitude Hemi | 2010 S4 Sold | 2010 BMW 135i Retired | 2006 Lotus Exige Sold |
|
Appreciate
0
|
12-02-2014, 08:57 AM | #17 |
Captain
670
Rep 987
Posts |
I make $72k 2 years out of college but have to pay income tax. My 135 is $551/month + $100/month insurance, and I financed for 4 years. Rent and health insurance are a little cheaper, so I have a similar car budget.
I think the payment is doable, but making that kind of payment on a lease with your income is ridiculous, especially if you are renting. Buy a GTI (or better yet a real cheap Fiesta ST), save for some inexpensive real estate (or expensive depending on your circumstances when you're ready to buy) and then you can get yourself a new BMW. Last edited by fcman; 12-02-2014 at 09:04 AM.. |
Appreciate
0
|
12-02-2014, 09:00 AM | #18 | |
Captain
157
Rep 965
Posts |
Quote:
|
|
Appreciate
0
|
12-02-2014, 09:02 AM | #19 |
I'll get back to you
7562
Rep 2,132
Posts |
I thought engineering students were smart..
__________________
2018 Stinger GT
2009 E90 N51 /Active Autowerke Stage 2 tune/BMW Performance Exhaust/ Countermeasure enthusiast. |
Appreciate
0
|
12-02-2014, 09:13 AM | #20 | |
Banned
753
Rep 1,208
Posts |
Quote:
To the OP: you will get a wide variety of advice on personal financial management on this, or any, forum. In my experience, I graduated undergrad with a business degree and didn't make enough money right out of the gate to live in Chicago comfortably AND make car payments (and parking spot payments). I waited until I made about ~$70k and leased a G25 (~$350/mo). It was a great little sedan and my first new car, but it got pretty boring. After about 1 year on the lease I swapped it on SwapaLease, got a promotion and got a 2012 Z4 on SwapaLease with 25 months left (~$550/mo). I absolutely loved that car and had so many great times in it, thus I ran the lease out and just recently returned it to BMW. Now that I want a new car and make more money than I did 2 years ago, I am financing a new M4 (~$1,100/mo). Throughout this process I bought a condo and paid of student loans as well as started savings a good amount of $$. I wanted to share my experience just so you have a point of reference. However, everyone's experience will be different. IMO, wait at least 3 months and track your spending vs. budget. When I started to track my spending, I noticed some areas I was spending more than budgeted and some that I was spending less (somewhat obvious, but alcohol at dinner/bar/home can cost $400+/mo if you are not careful). If you are pretty close to your budget and still feel comfortable / excited about the M235i then do it. You will be working hard and to have something nice that gives you enjoyment is necessary to motivate you in some situations. |
|
Appreciate
0
|
12-02-2014, 09:18 AM | #21 | |
Captain
670
Rep 987
Posts |
Quote:
Last edited by fcman; 12-02-2014 at 09:24 AM.. |
|
Appreciate
0
|
12-02-2014, 09:26 AM | #22 |
Captain
157
Rep 965
Posts |
To the person who said pay all cash for cars...with interest rates as low as they are that's actually not necessarily the best financial decision. Why? Because you can invest your money at a higher rate than you'd borrow at if you financed. Make your cash work for you.
To the person that said wait 3 months, I also agree. And I think a loan company will want to see a few paychecks in any case. |
Appreciate
0
|
Post Reply |
Bookmarks |
|
|