Underwater on a Luxury Car!

[@stephendibari5010]

BMW = Broke My Wallet. After the warranty is over, especially after 50k miles/and or 5 years old you better have deep pockets! Get a pre-owned toyota or an older Lexus, they last a very long time and require very little maintenance. My 2002 Lexus ES300 with 185k miles is like new, build quality, fit & finish is amazing. Every button/switch still works.

[@aliali-ce3yf]

Always go for a used Corolla for commuting. Reliable, low cost of maintenance, cheap to fill up. They last up to 300k miles. Anything else and you're falling for marketing. No is impressed or cares about what you drive. And if they do, they're the wrong people to have in your life

[@Joenzinator]

Bit of a stretch saying ANY car other than a Corolla is a mistake. But an affordable, reliable car is important when trying to build wealth. I drive a 10 year old Honda Odyssey because I have several kids. A Corolla wouldn't work for me.

[@1byrdman007]

Little bit dramatic, sounds like you fell for the Toyota marketing. I fill up my Leaf for about $2 and that low cost of maintenance for a Corolla sounds expensive when you've got oil changes, engine air filters, spark plugs to change, exhaust to rust, etc. In other words, there's more cars than just a Corolla lol.

[@Joenzinator]

@@1byrdman007 Agreed. The Corolla is a great car for a single person commuting to work, but it's not the only affordable, reliable transportation out there. And it's not going to meet everybody's needs.

[@aliali-ce3yf]

@@1byrdman007 EV's are horrible value. not to mention if you're ever in an accident, those EV fires are incredibly hard to put out. Plus an EV. Besides Nissan is an awful brand, I doubt it survives much longer , probably going out of business soon

[@Chris-xt8io]

@@aliali-ce3yf eh, the leaf is a pretty good little car, especially for commuting. Nissan will stick around. The only thing I’d recommend is parking it outside because I have friends that are firefighters and they let your house burn down if it’s an EV fire because they cannot put it out. So their rust comment doesn’t hold because usually suspension rusts first

[@justgaming6245]

There's no chance they left the dealership without knowing what gap insurance exists, they just thought they didn't need it.

[@tckiefer]

I'll say I've bought two cars from dealerships and no one tried to sell me gap insurance.

[@yentsch]

If it is a new BMW, they come with 3 years or 36,000 miles of included maintenance (brake pads, clutch, wiper blades are not included but most other things are). Brian and Beau are obviously knowledgeable about the beyond 3-year costs, however. These are not inexpensive to maintain. If the “friend” isn’t driving on a racetrack, the maintenance costs will be low for the first 3 years so they aren’t in a huge hurry to transition to the used Camry. The large portion of the depreciation curve has already occurred.

[@Joenzinator]

Anything over a 5 year loan is just asking for trouble, especially on a new luxury vehicle because they depreciate so fast in the first few years. Sadly, the most common car loans are 6 and 7 year loans!

[@IrisP989]

Not everyone cares about depreciation. We are not planning to sell our only car. Not sure how our 72 month car loan at 2.49% with 50% down that we are choosing to not pay off all at once (or just faster) is asking for trouble.. We owe less than what it is worth so we are not underwater.. What we have left to pay is 1% of our net worth.

[@Joenzinator]

@@IrisP989 If you are putting 50% down, then you aren't who I'm talking about. Most consumers are putting down 10-15%, and quickly become underwater with a long loan term. A lot of consumers are also rolling negative equity into the new loan, so they are underwater as soon as they roll the car off the lot. For people living paycheck to paycheck, a 3-5 year loan keeps them in check on buying a car that won't financially ruin them.

[@chukuemekaoje1015]

At 15k of negative equity, that BMW owner isn't gonna be able to roll it into anything below 45k. Lenders won't do auto loans above a certain LTV of the newer car (it might vary from lender to lender). Honestly, this is a crap situation all around.

[@darellhunter2205]

I was thinking about this as well. Banks typically will let you finance up to 120% of the new car price. Rolling 15k into a new Camry/Carola may still put them beyond 20/3/8.

[@avpubynf]

Yep, it's typically around 130% LTV. The BMW owner has $15k of negative equity so at minimum they would need to buy a $50k car to roll the negative equity over. This obviously doesn't fix the problem. They will probably have to get a personal loan or get $15k some other way.

[@last9up]

I have an F Sport Lexus. New tires cost me $1200 and new brakes cost me $800. That wasn't a fun weekend 😅

[@victorbaird8220]

😂😮😊

[@aktm4u]

Bring My Wallet

[@2744ducksdman]

"My friend" or "asking for a friend"?

[@chrisharris4223]

I have sympathy to a point being a massive petrolhead. But I did at least have the restraint to not indulge in my passion until I was 40 and had some decent money available. It is very tempting though and I have to fight the urge of upgrading constantly! It is by far my biggest weak spot in an otherwise very frugal and money mutant-like lifestyle 😀

[@saulgoodman2018]

"His friend"

[@John-d2d8q]

What Is the 8% rule? 100k gross income means buy a 8k car?

[@Chris-xt8io]

20, 3, 8. Twenty percent down, 3 year term, and payment is no more than 8% of gross. So a long as your car payment is

[@John-d2d8q]

@ what is the rule of thumb for luxury cars?

[@stocksxbondage]

@@John-d2d8q20/1/8. Pay the luxury vehicle off in 1 yr. They made Japanese vehicles the exception (Lexus, Acura, Infiniti)

[@John-d2d8q]

@@stocksxbondage what is exception? back to 20/3/8?

[@stocksxbondage]

@@John-d2d8q yes, exactly! Essentially trying to discourage using the rule to justify luxury spending.

[@Dre2Dee2]

How much money does it cost to buy a decent mustache? Obviously you cant afford it

[@carlgarrett5142]

😄😄 As JP Morgan once said, if you have to ask, you can't afford it.

[@Lolatyou332]

Just cut your losses and sell the car.. Buy a beater

[@raym9890]

Mitsubishi mirage

[@ChickenFriedCorgi]

Mom damaged my tesla model 3 bumper when pulling out of the garage. Full replacement with sensors cost well over $1800 lol. Something to think about if you are thinking about saving money with an ev.

[@sasukesuite1]

This is not a maintenance cost, it’s what Dave would refer to as stupid tax.

[@tomiasthexder7673]

Bavarian Money Waster are the most overrated vehicles along with the 3 pronged swastika

[@admiralmurat2777]

LOL BMW gay

[@chadparks9810]

Please keep pushing Bo to get rid of that nappy mustache! 😊