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I'm no financial advisor, but I wouldn't spend $140K on a car in your shoes. You could do more with your money to make more money (i.e., investments, real estate, etc.) than buying a car that will depreciate, at a high interest rate now, with likely a dealer markup. Lot's of very cool cars out there for 1/2 the price. Some will say YOLO, and that's true too. Just my 2 cents.
Yeah that's a really good point. Even though I have the cash I'm definitely leaning towards financing if I do get it. Should that DTI be after tax or before tax income?
I currently have a BMW 335i, the most natural next car would probably be the new M3 or M4 instead, but really not liking BMW's latest designs. So trying to figure out if I should get a 911 instead
That's after deductions but pre tax. If you're 1099 and your gross revenue is $500k and your deductions are $200k then you have $300k of taxable income and that's what it's based on.
If you're scared of doomsday scenarios then don't buy a $140k car with your income. But then also think of what level of financial security you WOULD be comfortable with and if that's reasonable. If it was me I'd be all in. I'd have a 911. You could always map out the depreciation and put enough down so that you'd never be upside-down on your loan so you could ditch the car in an emergency.
Whatever you do, my advice is don't pay cash for toys. Save your cash for investments and emergencies. If something comes up that you want to invest in that you have to sell your car, unless it's financed. If the **** really hits the fan in a bad way I'd rather have the banks take my toys than scramble to get cash together
You have to figure out what works for you - but one of the keys things to rembember in life is to always buy in your comfort zone. Once you get out of that zone and over-extend, the joy of ownsership is lessened by the financial stress imposed.
I have owned Porsches since 1977, and and am financially conservative. I can tell you with great certainty that the joy of owning and driving a Porsche is not in the model you drive, but in the experience it gives you - the adventures - the drives - the people you meet. Your first track day, the first autocross, the first time you place top three in one of those auto crosses, the gimmick rallies you run in your car and the friends you make along the way. Do you need a 992 for that? No, you don't.
I owned a 2008 Boxster S for several years. I did not have the cash for a newer 997 and didn't want to finance a toy. Some looked down upon it, but who cares? I would eat many of those 911 owners alive on the Auto cross circuit or even track days in this machine. It was a wonderful car and I sometimes which I would have just kept it.
That car was fast, fun, handled like it was on rails and gave you everything Porsche other than the ego of being a flagship model. You don't have to spend $ 100K or more to have fun, a clean used Boxster or 996 will get you into the fold for under $ 40K. It will give you all those experiences easily. Ask yourself WHY you need a 992 and be honesnt with yourself. You may be far better off buying that. house with a garage and putting a older Porsche in garage, then buying a high end car that sits out in the weather. Get any Porsche, join PCA - and go to the Chapter Events. They don't care what you drive, and you'll have tons of fun, and make lots of memories.
The Real Key however, is to not put your money into cars at a young age. Put it into investments. Real Estate, Stock Market, that sort of thing. You can take $ 30K and turn that in $ 1 mil over time, and when you do that - you can buy whatever snazzy Porsche you want without ever leaving.your comfort zone.
honestly I'm thinking of the 992 because for some reason I just really like the look, can't exactly pinpoint it down, even though I know I'll have fun with the other models too as you said
Some background: I grew up quite poor so I have been frugal all my life.
Fortunately I do quite alright right now and make about ~$300k living in HCOL area. Currently have a small modest condo with very manageable mortgage due to covid rates. Eventually I would want to buy a bigger house with a dedicated garage for my car, but not sure when that will be with the current housing prices and rates.
I've been eyeing the 992 base for a while now, and ordering a new one with the specs I want would be ~$140k.
I can pay all cash for it, but that would deplete nearly all of my cash savings.
I could go for a CPO 992, but those are ~$110k and difficult to find the exact specs I want, not sure really worth the savings.
So essentially my options boil down to:
1) just get the new 992 and enjoy life
2) keep shopping around for a CPO one, never mind the specs and just enjoy the car + savings
3) wait a few more years and focus on getting a house with dedicated garage first
Sorry if these are dumb/ridiculous questions for an internet forum, don't really have any friends/family I can get these kind of advice from...
I'd respectfully disagree with the "if you're asking, you can't afford it" crowd since it's easy for many people, regardless of their means, to have a mental block around spending over $100k for a car. Most people without any interest in cars, even with net worth enough to reduce the spend to a rounding error, wouldn't dream of spending that much. Even as an enthusiast, from a pure value for performance perspective it's very difficult to justify purchasing anything more expensive than a new Corvette or M3. If you're spending the premium for a new 911, you're willfully paying significantly more for a very specific driving experience, not really much more performance (outside of the Turbo S).
With your income, living expenses, and savings, you can certainly afford to spend $140k on a base 992 in pure cash flow terms. The question to ask yourself is whether the opportunity cost of that spending, in relation to your other financial goals and priorities (buying a larger house, building wealth), is justified by the enjoyment you'd get from it compared to all other alternatives (buying an older Porsche, buying a new Corvette or M3, etc.). Only you can answer that question for yourself. Do the math to see how much this purchase would delay your attainment of other goals and compare it to alternatives to find the right balance for you.
If you decide to move forward with a 992: As others said, I would recommend financing the bulk of the purchase as opposed to spending all your cash savings (assuming you can borrow at under 6% interest or so and would invest the money you didn't spend). I would also recommend holding out for an S if you decide to buy new, since those depreciate meaningfully less than base Carreras--so your total cost of ownership would be lower than if you purchased a base model. Add fewer options if needed to stay in budget.
I'd respectfully disagree with the "if you're asking, you can't afford it" crowd since it's easy for many people, regardless of their means, to have a mental block around spending over $100k for a car. Most people without any interest in cars, even with net worth enough to reduce the spend to a rounding error, wouldn't dream of spending that much. Even as an enthusiast, from a pure value for performance perspective it's very difficult to justify purchasing anything more expensive than a new Corvette or M3. If you're spending the premium for a new 911, you're willfully paying significantly more for a very specific driving experience, not really much more performance (outside of the Turbo S).
With your income, living expenses, and savings, you can certainly afford to spend $140k on a base 992 in pure cash flow terms. The question to ask yourself is whether the opportunity cost of that spending, in relation to your other financial goals and priorities (buying a larger house, building wealth), is justified by the enjoyment you'd get from it compared to all other alternatives (buying an older Porsche, buying a new Corvette or M3, etc.). Only you can answer that question for yourself. Do the math to see how much this purchase would delay your attainment of other goals and compare it to alternatives to find the right balance for you.
If you decide to move forward with a 992: As others said, I would recommend financing the bulk of the purchase as opposed to spending all your cash savings (assuming you can borrow at under 6% interest or so and would invest the money you didn't spend). I would also recommend holding out for an S if you decide to buy new, since those depreciate meaningfully less than base Carreras--so your total cost of ownership would be lower than if you purchased a base model. Add fewer options if needed to stay in budget.
Thank you very much for the detailed response, yeah I need to think more about what is right for me
That's after deductions but pre tax. If you're 1099 and your gross revenue is $500k and your deductions are $200k then you have $300k of taxable income and that's what it's based on.
If you're scared of doomsday scenarios then don't buy a $140k car with your income. But then also think of what level of financial security you WOULD be comfortable with and if that's reasonable. If it was me I'd be all in. I'd have a 911. You could always map out the depreciation and put enough down so that you'd never be upside-down on your loan so you could ditch the car in an emergency.
Whatever you do, my advice is don't pay cash for toys. Save your cash for investments and emergencies. If something comes up that you want to invest in that you have to sell your car, unless it's financed. If the **** really hits the fan in a bad way I'd rather have the banks take my toys than scramble to get cash together
Thanks again for explaining! I found a couple of car depreciation calculators on google, is there any you would recommend when trying to map out the depreciation?
Buying a car that amounts to nearly half your annual income sounds insane to me. Get yourself a nice CPO Cayman/Boxster, you'll have just as much fun.
Best advice of the bunch. As someone who also started poor but bought my first Porsche (a year old Cayman S) as a retired millionaire , I strongly suggest your first step is a good financial planner.
07-23-2023, 11:06 PM
