Will I be able to afford an M3?

[leonardman]

Hi guys.

I'm new to the country and I will be living in Florida and will be earning approx $80,000 annually.

I know I have to build my credit score first. But when I finally do build up and get a great credit score, will I be able to afford a 70K M3? What is the best way to purchase/afford such a car? Cash, lease or finance?

I don't have any student loans. No debts, Rent will be around 800-1000 a month

Profession is Physical Therapist.

Thank you!

[MaynardZed]

If you're single, I would say yes (just barely). Whether it is financially wise for you to buy a $70K car is another question, but the new country you moved to is free and you can do what you want.

[mrToucan]

No one can really answer that question but you. If you're asking "Does anyone out there drive a $70K car while making $80K a year and have $10-12K rent a year" then the answer is YES, there are people out there who work three jobs just to be able to drive a nice car and show it off.

Lease: Can you afford $850-900 a month payments while paying for life expenses, car insurance, etc...?

Since you mentioned that you have no credit and are going to build it up to have a great credit then you may be making more money by the time you build a 750+ FICO score.

Good Luck!

[golovko]

After taxes you're really making closer to $50-60,000/year. That paints a very different picture.

[guarnibl]

No one is going to give you a loan on a $70,000 car for your first car loan in the US. You will need to move slowly up over the course of a few years to that price point, or have a TON of cash to put down.

[DocWeatherington]

You can afford it, but as guarnibl stated, if you have no credit in the States and don't have a large deposit, its highly unlikely any bank will give you a 70k loan. I don't know if you could even lease something without paying out the a## and a really large cash deposit.

If you have low living costs, no reason you couldn't afford a 780-1000 lease or car payment with your salary.

Don't be shocked if you have to do a "starter" car to build credit and a history.

But, don't let this stop you. Ask as many banks, loan officers as possible.

[leonardman]

I really don't mind if I have to get a "starter car" at first. I'm just wondering if in the future, when I finalyy have good credit etc. if i will be able to afford it. thanks for the input guys!

[ano0oj]

Originally Posted by golovko

After taxes you're really making closer to $50-60,000/year. That paints a very different picture.

This.

While rent is $800-1000, your living expenses may double that amount with bills, groceries, gas, insurances...may be a better route to find one in the used market closer to the $55k mark

[stooker]

Originally Posted by leonardman

I really don't mind if I have to get a "starter car" at first. I'm just wondering if in the future, when I finalyy have good credit etc. if i will be able to afford it. thanks for the input guys!

If "finally" is a long ways from now, hopefully by then you will be earning more at your job. Also by then, there will be other cars that might interest you. Or, if your heart is set on an F80, keep in mind that 2018 is the last year for the F80. Unless you are ready to buy within the next year or so, you'll be too late to buy new. Used F80s will be a lot less than $70K.

Biggest thing, though, is to be sure to live within your means. Make sure you are putting enough away for retirement before looking to blow a ton of money on a car. There are many "fun" cars that cost way less than $70K.
Are you single now? If so, are you planning on getting married in the near future? Kids? More schooling for you? Just some no brainer questions to consider, but I've seen too many people get way over their heads financially with cars and other toys/hobbies.

You can likely "afford" a $70K car when your credit is established (and with a decent down payment), but I'd hate for you to be swamped with car payments, insurance, etc., and then have a major life event come up and bog you down even further. Good luck, OP.

[GrussGott]

Originally Posted by stooker

Biggest thing, though, is to be sure to live within your means.

+1 - save to build up money while you don't have time, so that when you have time, you have lots of money.

Otherwise, life will suck.



"The problem with wisdom is that, as a product, everybody likes to window shop, but nobody's willing to buy"
-- Grussgott

[bd307]

Originally Posted by leonardman

I really don't mind if I have to get a "starter car" at first. I'm just wondering if in the future, when I finalyy have good credit etc. if i will be able to afford it. thanks for the input guys!

No one knows the future, but without an average credit the car you are thinking about will be around $1500/month with little to no down (Don't think you can lease it with no history).

Insurance will be easily another $300 a month if you are inexperienced/high risk. You are looking into the neighborhood of $2k/month just to drive the car around.

Worth it?

BTW welcome to this wonderful country.

[FC]

I'm sorry, I know a lot of people get excited about cars, but the while the answer might be yes (at crazy-high loan rates or lease payments) the advice is a strong no.

I'd be thinking about it hard if you were asking if you could afford a $35k on a $80k salary. A $70k, high performance car? That is just irresponsible.

Save for a house, for emergencies, pay off other loans, etc.

I should mention I am not one of those people who suggest your cars should always be paid for in cash, or that it should cost only 10% of your gross income, etc. But buying a luxury car that's nearly 90% of your income? That's crazy. Get yourself at most a GTI if you must have a new car.

That's my advice.

[shiv.nandak]

Originally Posted by guarnibl

No one is going to give you a loan on a $70,000 car for your first car loan in the US. You will need to move slowly up over the course of a few years to that price point, or have a TON of cash to put down.

To add to this, i believe most banks do not allow a loan term past the visa expiry date. I am not sure if OP is on visa or not though.

[mazharracer]

Originally Posted by guarnibl

No one is going to give you a loan on a $70,000 car for your first car loan in the US. You will need to move slowly up over the course of a few years to that price point, or have a TON of cash to put down.

That is not true, I got a loan on my first car which was 78k
as long as u have a steady job and good down payment you are good

[M3Fahrer]

I know my 2015 M3 with MSRP of $75,000 is probably worth closer to $50,000 now. I have low miles and still has a factory warranty through 2019. If you can find a pre-owned one with low miles, warranty, and in great condition, you could save a bunch going that route.

[skyline408]

I will speak from experience. Check insurance rates FIRST, before getting excited about the car. When I was young, I purchased a new E46 M3 right when they came out w/o checking insurance. My rates doubled from my 330ci.

[Draper]

Buy a used E93 M and enjoy the Florida sun.

[paliknight]

Originally Posted by bd307

No one knows the future, but without an average credit the car you are thinking about will be around $1500/month with little to no down (Don't think you can lease it with no history).

Insurance will be easily another $300 a month if you are inexperienced/high risk. You are looking into the neighborhood of $2k/month just to drive the car around.

Worth it?

BTW welcome to this wonderful country.

Insurance is also based on credit score and his driving history in the US, which are non-existent at the moment. I can't imagine insurance being less than 300-400 dollars a month in the beginning on this car in his name.

[paliknight]

Originally Posted by mazharracer

That is not true, I got a loan on my first car which was 78k
as long as u have a steady job and good down payment you are good

You're right. There is always a bank out there willing to give out loans. But the greater the risk, the greater the interest rate. It'll probably be around 8% at least on this loan. That could add hundreds of dollars alone.

[SD ///M4]

For most of my life (65+ years) the common wisdom was to spend no more than 1/3 or your annual gross income on the purchase price of a car. That was why when I was 21 and bought my first car, I made $6,000/yr. and bought a brand new car for $2,000, which was all I could afford. This increased with my income so other cars I bought were $4,000 ($12K income), $6,000 ($18K), $12,000 ($36,000) and $16,000 ($48k), and so on. The last car I bought before I retired (at age 50) was a Honda S2000, which cost $32,000 and I had a $90K salary. I also worked at a tech company that was a Wall Street darling in the late 90's and l and made a huge amount of money on stock options and a generous stock option plan for three years (which allowed me to retire).

Another barometer for me was the base price of a brand new Porsche 911, which always cost, no matter how much I made, about the same as my annual income. For example, when I was 21 and could afford a $2,000 car, and made $6,000 annually, a 911 cost $6,000, and so on. When I bought my S2000, a 911 cost around $80,000+. I never felt like I could afford a Porsche because it was almost as much as my annual salary, which is the situation you would be in. These figures were just for my income and don't take into account previous girlfriends that I shared cars with and my wife (for the last 25 years). Two incomes definitely helps, and my (much younger) wife currently makes way more money than I did.

However, the more money you make, the more disposable income that you have, and the larger percentage you could put towards a car, is this is what you choose to do. Another factor is that rent will always go up, but a mortgage stays the same for 20 years, in addition to the fact that your home will almost always appreciate. Buying a house is generally a much better investment than buying a car that you desire, rather than a car you just need. If your job was in the tech industry and you worked at a company that had stock options, and they hit it big, you might be able to increase your income, but not with a job as a physical therapist. Probably not even bonus money there.

In terms of financial balance, at your age, a $70,000 M3 would not be affordable on a $80K salary. My last physical therapist, mid-30s, drove a VW TDI. Note that no one that has replied has identified themselves as a financial adviser.

[dzvero]

Originally Posted by leonardman

I really don't mind if I have to get a "starter car" at first. I'm just wondering if in the future, when I finalyy have good credit etc. if i will be able to afford it. thanks for the input guys!

No need to worry now, It will take you few years. Whatever we tell you now will not be the same in 3-5 years.

[aX3Man]

Take your current lifestyle and list out all your expenses. The most important part is to be honest about what you actually spend every month on things not related to a car. Then add in an M3 payment, insurance, gas and see if you're able to still maintain that lifestyle. If you can afford an M3 but have to eat canned tuna and ramen for lunch and dinner then maybe you should wait. And there is nothing wrong with waiting to get an M3. I waited 16 years for mine.