New car Prices

[turbomangt]

Today when I was dropping a car off at the Lambo dealer, I guy was trading in a 2003 Mercedes S500 with 7,000 miles on it (THIS CAR WAS MINT) and he was writting a check (Yes writing a check) for $177,000 for a new Gallardo. My question is WHY? Their ia a waiting list for the new Ferrari on a first come serve basis at $250,000. The new Benz, posted here, I see is around $400,000. Who are these people buying these cars? Now I like cars as much as anyone, but even if I had that kind of money, how do you justify any car is worth that much. ? I heard that the gentleman in there today, was taking a $35,000 hit on a car he drive for 3 months? I don't know, maybe I'm just too grounded, or just too poor. Bottom line, I'll take my Cruiser, thank you. [?]

[Rolo]

Do not look at cost in absolute dollar amounts, but rather as a percentage of income. It's funny, today a co-worker and I were looking at the new Aston Martin and he pretty much said the same thing, hehe.

That is the same mistake people make in thinking of our national debt: they only think of this astronomically huge number getting even larger and think that our debt is getting larger when, in fact, as a percentage of our GDP income, it is getting smaller.

Also, money management is more of a factor than actual income. How much did I pay for my car? Zero. My bank paid for it. I agreed to pay my bank, but over a long period of time. How much per month do I pay for it? $400. How much am I making off of the cash that I did not spend? About $1,000 per month. In a sense, my PT will have been "free".

[IRPT]

quote:Originally posted by Rolo

How much am I making off of the cash that I did not spend? About $1,000 per month. In a sense, my PT will have been "free".

Rolo, you need to come up here and give me a hand with my finances!

[bigdogdad]

Rolo is welcome down here also.

[quicksilverdon]

quote:Originally posted by Rolo


That is the same mistake people make in thinking of our national debt: they only think of this astronomically huge number getting even larger and think that our debt is getting larger when, in fact, as a percentage of our GDP income, it is getting smaller.

I was with you up to that paragraph - That's "voodoo economics". Going from a surplus to the largest debt ever is not good. If you are saying it's not the largest debt ever as a % of GDP income, granted, but it is far from a mistake to be alarmed and concerned about it.

[bobs turbo pt]

hey rolo, how about helping us all out!![^]

[R.E.]

Hey Rolo,
Don't know what the price of your Cruiser was but if you're making $1000 per month off that money, after paying the bank their interest rate, can't help but wonder. You don't by any chance work for ENRON do you? [8D]

[KingKole02]

Rolo,
You are right about the precentages of income thing.
Thats the only way you can tell if your able to afford the vehicle and the insurance plus gas/maintance cost involved with owning the vehicle.

[Rolo]

R.E.: LOL!

KingKole: Yup! All part of the financial schedule, aka "Budget".


Finances...my newest hobby before the PT, so I enjoy talking about both extensively, both sharing knowledge and learning. I started investing one year ago this month, so I am fairly new at that as well.

To clarify:

My PT's sticker was $27,757, invoice was $23,300 or $23,800, I paid $21,500.

I could have paid cash, but that would have cost me dearly. Here is why: the best way to make money is off of other people's money. I borrowed $21,500 at 4.5%.

I kept the $21,500 in my brokerage account. As of this moment, I have earned 143% on my active trading of stocks, 61% on my entire portfolio over the past year (stocks and mutual funds). I blundered a bit this past week or two--normally my return is always around 75%. hehehe, the Market is probably the only place where you can regularly make bad mistakes and still make a killing.

My car loan interest rate is lower than my margin rate (5.45%), so the car loan money is cheaper and more irresistible. I am usually 90%+ margined. (A margin account is one in which you can borrow the same amount that you have, so if you have $2,000 in your account, you can invest $4,000 by instantly borrowing another $2,000. This gives you leverage to double your gains, but doubles your losses as well; I call it "amplify".) This means that $21,500 gives me $43,000 of buying power at an effective interest rate of 4.975% (4.5% on half for the car loan, 5.45% on the other half on margin). By having good control of finances, I have $43,000 working for me at zero cost to me (it is all borrowed!). Is that freakin' cool or what?

So, the bottom line, monthly:

$21,500 @ 61% = $1093
Car payment - $ 400

Surplus cash $ 693

Now, keep the cash in the account, month 2:
$22,193 @ 61% = $1128
Car payment - $ 400

Surplus cash $ 728

Can someone do month 60 for me? snittykitty?


Albert Einstein was asked, "What do you think is the greatest discovery of the twentieth century?"
He, the man who may have unlocked the secrets of the physical universe, replied, "Compound interest"!

[PTucker]

I dont think I could have much fun in a lambo for more than a day or 2. If you think about it, the lambos have like 3-4 other cars it can really race. Racing a riced out civic in a lambo wouldnt be any fun. None of the sports cars(SS, Cobra, Sti, Evo) even have a shot of beating an exotic. So they wouldnt even try.


I would rather a debadged SS or Cobra than a $100k+ car. You would have much more races.



I have the most fun when I beat a car that thought he could win.