Help with Buying a Car....

In My Humble Opinion
1

I have recently landed a job making about $1250 a month (damn good money for a teenager) so I am going to get a new car. I have been looking at several different options that I would not beable to afford without a paycheck like this.

-1999 BMW 323i - $27,310
4-Door sedan, leather, CD, power windows/locks
*lease - $275 a month with $2500 down
-1999 Mercedes C-Class C280 - $30,170
4-Door Seda, leather, CD, power windows/locks
*lease - $325 a month with $3000 down

Now, I have driven both of these cars and I like the BMW a bit more. But this is where I need some input. The 2000 models on both of these cars looks much better, and in the case of the BMW especially, performance is substantially better. Should I hold off until the 2002 models come out so that the 2000s will be as cheap as the 99s are now? I can wait a while because I have a car, I would just like something like this.

2

IMHO (hint, hint), you should be damn sure you’ll have this job (or an equivalent) for quite a while before you commit to years of payments. Will you be in college in two years, scraping for money? On your own, in an apartment, which needs rent? What happens if you get fired next week, or break a leg? Do you have disability insurance? Will you be “upside down” if you are forced to sell the car (that is, you owe more than you can get selling the car)?

Car leases are especially tricky – will you get screwed on the terms because you don’t have much credit history, or job history?

Anyway, back to the OP:
If you wait until the 2002 models are out, you’ll then be drooling over the improvements in the 2003 models :slight_smile: I doubt the prices of the 2000 models will come down to the current 1999 levels very quickly (and when they do, the 1999 models will be even cheaper …)

If you’re determined to get one of these two, get the BMW, and put the extra $50 every month into a mutual fund.

Arjuna34

3

I think I like that idea, but what about a rothIRA?

4

Well yeah, a Roth is a nice idea…but you can still invest in mutual funds within your Roth account. I would say to save your money and get a cheapo car while you are in college. It’s hard to believe at your age, but it is well worth it. With the money I invested through high school and college, I was able to get a nice condo.

Seth

5

One other thing…leases are generally pretty silly ideas. You don’t own anything after making all those payments; all you get is the right at the end of the contract to overpay for a used car. I would suggest that you buy a cheapo car outright, or get a loan from your bank. At least you own something then.

6

$1250 per month? Is that before or after taxes? If it’s before, then you can probably expect to have less than $1000 take-home. So if you decide to go with the BMW (which I would choose if I HAD to choose between the two), that leaves you with about $700. If this is okay with you and you can get by with $700 per month, then I say go for it. But I think you’re getting in way over your head. Buying a cheaper, used car for about $10,000 and investing the rest of the money is the way to go, IMHO. You will need that money later, trust me.

Anyway, the only reason I’d choose the BMW is because it looks better. I have no idea how it handles. Myself, I’d get a pickup truck, like a Tacoma.

7

IMO, leasing is basically renting… you drop $300/month into it, and you won’t see any of that $300 again.
at the end of the lease period, you’ve paid the car’s value (or close enough to it), and you’re left without the car. If you want to keep driving after that, you have to either buy something then, or take another lease… you’re basically renting the car…

also, you only want to commit yourself financially for as long as you know you’ll be in that same financial situation, as has been stated earlier. if this is just a temporary gig, until you go to college, get something you know you can get paid off within a year (no lease). then, you have something dependable, that you’re not sinking money into anymore, aside from gas and insurance. then, you can concentrate on other fun stuff… I wish I were in that situation, where I had a nice income, and didn’t have any bills… I’d get my pilot’s licence in a heartbeat…
sigh

Glenoled

8

If you lease, you have to return the car in pristine condition & watch your milage allowance! Its’ usually 10,000 miles per year which isnt much.

Insurance at your age on cars like those is going to eat up a lot of your salary!

9

Not for nothing, but someone of whatever age who makes ~$25K and spends $300/month (plus gas, plus insurance, plus repairs, etc.) on a luxury car pretty much deserves the lifelong poverty to which he is dooming himself.

Off to IMHO.

10

First, I highly recommend you take the same money you’d spend on a car, and sock it away, where in 10 years you will have something more than a status symbol.

Please take a look at a site I did for Nippon, one of the 20 largest corporations in the world, and review what happens with money invested wisely. The specific page I’d suggest is: http://www.nlia.com/retire/frameset.html Go to the retirement education services page. Learn what that money is REALLY worth, and what that car will really cost you and your future family.

Buying that BMW now can easily cost you the ability to retire very well off.

Remember that the car will take away a great deal of your freedom. You will no longer be as able to quit your job, take two months off, or buy a house. You are destroying your debt to income ratio, which is very important when you decide to buy a home.

As a teenager, a fancy car seems super important, maybe. Trust me, it’s not—people will not genuinely like you more, you will have to wonder if people are dating your car, and you will have class envy to deal with.

The insurance will be high, unless you take a huge deductible. That means that when somebody keys your car because they resent a young person driving it, you have to let insurance fix it and watch your premiums go up, or accept the damage. Door dings are a real part of life. How are you going to have them fixed?

All that said, I drive a Mercedes SLK 230 Kompressor, and I’m pleased with it. If you bought one used, you could probably get into the price ballpark you’re looking at. The Kompressor has the convertible hard, not soft top, and looking at it with the top up, you wouldn’t suspect it’s convertible. The handling is fine, and the super charged engine purrs along nicely. Drives well, looks great, and will probably resell nicely. Quad air bags are standard.

I know some BMW Z3 owners (I live in SC) and have heard unfortunate stories. I was driving with a friend in his 6-mo old car, and it stalled TWICE in parking lots. As far as I know, BMW never got it fixed. That, however, was a year or two ago, and I can’t say it wasn’t a fluke.

YMMV. I hope you keep the money, but if not, I hope whatever you buy, you’re ecstatic—because at that much of an investment with that big of a cost opportunity loss, you deserve to be.

11

On that “recently landed” job—are you CERTAIN it will be there throughout the life of your payments?

12

Have you discussed this with your parents? What do they think about your plans for leasing a new car? Will they co-sign? You should know that nobody is going to lease you a thing when you are making just under 15K a year! Do you have any idea what your insurance rate will be for a car like this? Astronomical.

It sounds to me like you’ve read some newspaper adds but you haven’t really gone out and done the real homework. My guess is that you won’t even get a test drive from a dealer unless your mom or dad come along with you.

You are in over your head kid. This will be a great learning experience for you. :slight_smile:

13

dwala I’ve got a Z3, and am fairly active in the Z3 message boards, and I’ve never experienced or heard that the Z3’s had any stalling problems. The only issue with the Z3 that tends to pop up quite frequently is that the paint chips fairly easily. Whether that’s caused by the shape of the body (not very aerodynamic) or bad paint is not certain.

That said, Evnglion was looking at a 323i, not a Z3.

Anyways, Evnglion, I was 30 years old and making 6 figures before I even thought about buying a flashy car. I know, I know, everyone is lecturing you. But have you thought about:

  1. Insurance. Insurance for a teenager on a $27K - $30K car is probably along the lines of $250 - $300 month. I don’t know for sure, but I do remember paying $150/month on a $3500 Ford Escort in 1987, when I was 17. Do check on it before you buy the car.

  2. Leases. Leases were designed so that people can drive cars they can’t afford. I desparately wanted a new car about 4 years ago, and ran the numbers on several leases. All of them came down to me giving the dealer a LOT of money and getting NO equity or investment out of it. Remember, in 3-4 years your lease is going to be up. At that point, you either give up the car, or you buy it and continue making payments on a car you’ve already made 3-4 years of payments on. It pretty much sucks to make payments on a car for 8 years. Think about it.

  3. Living Expenses. If you want to move out of your parents house and get your own place, you can do it with $1250/month in most areas. Can you do it with your car payment? Remember, it’s going to cost you twice as much as you think to live on your own. I remember doing those calculations when I was 18 - “I bring in $1200/month, my car payment is $150, my insurance is $150, my rent is $450, utilities/phone/cable TV comes to another $150, whoooaaa, that leaves $300 a month for food/clothing/partying! I’m rich! Whooohooo!” Then I actually tried living on $300/month, and got mighty tired of ramen noodles and cheap beer. And remember, this calculation was with $300/month in car expenses, not the five or six hundred yours would be.

Me, given the choice, would always go for the cheaper car and being able to live on my own.

14

Evnglion:

You need a BMW like you need a hole in the head.

Let’s face it: you’re a teenager making $1250 a month. The dumbest thing you could do is spurge on a fancy vehicle at this time in your life. And leasing?!?! Leasing is usually the most costly method of driving a car. Why do you want to put yourself in that position?

(Hell, I’m a 33-year-old electrical engineer and I drive a 1985 Mustang with 150,000 miles on it. So it really cracks me up when I see these young’ns who insist the must have a new BMW.)

If you want a car, buy one from the classifieds for about $2500. If you absolutely must have something a little nicer, then take out a loan. But make sure you can pay it off in 2 years or less (no 5 year loans!!). You’ll thank me in about 5 years.

15

Great! As I mentioned, this car could have been a fluke. Regardless, when I thought about purchasing a Z3, I couldn’t quite get past the basically new car stalling twice.

In this case, I’m very glad your mileage varied.

[offtopic]What do you discuss on a car message board?[/offtopic]

16

Thank you all very much for the input. I have already tested out the 323i, and I like it a lot. But then I went down to the insurance place. $250 a month. No way, so I am thinking of getting a jetta for $150 less per month, and $100 less in insurance. I have also opened up a RothIRA and I am pretty secure in how I am going to be making the deposits into that. In response to OneChance’s post

This is after the taxes. I have taken a lot of looks down the financial-security road, and I realized that having a performance-car at this early stage in my life, I have no need for such a thing. I should wait until I am no longer a fledgling. Thanks guys…

17

A Jetta, huh. Smart man. You’ll love it. Go for the 1.8T if budget allows. Get a manual tranny. Don’t bother with climatronics. It works fine but not worth the nuisance to operate. Go for the Monsoon stereo unless you plan to put a custom system in later. Oh and of course, get it in Silver.

18

Let me give you an example… You know how heated debates about religion get around here? Well, we get into the same kind of frenzy over dyno vs. synth oil. Then there’s chipping the engines, suspension mods, tires, exhaust, intakes, tinting, radar detectors… I’ve seen debates on what the best colour is for a car. You’ve got to be a car enthusiast and just a little bit crazy to really grok it.

19

…with most on this board.

There’s only two reasons why you would want a car like this:

  1. You want to look cool.
    A brand new BMW or MB would make you stand out because that’s what every artist on MTV/VH-1 is cruising in, and they’re always loaded with gorgeous women in those videos.
  2. You have an appreciation for cars.
    You know the marques of BMW and Mercedes Benz, know that they’re well-built performance sedans and want to appreciate them while you’re still young.

So I want to go on the record as saying that there is nothing wrong with either of these reasons. Both are reasonable and legitimate reasons for considering your thoughts. And, when I was your age (some would even say that I haven’t grown up much since :)), I thought along the same lines.

But let me let you into my head:
The ONLY reason why I would EVER consider leasing is if it’s a company car and the company’s buying. Leasing is the most ridiculous way I’ve ever seen to “own” a car… because you never own it! It is the biggest rip-off scheme of car companies for a loooong time. And they love it. Why? It is the biggest Win-lose situation (and if you think you’ve got the ‘win’ on this… dude, drop your pants and assume the position, because that sensation you’ll feel is just the first of many to come!)

After all that money you drop into this lovely piece of German Automotive Engineering
(down payment

  • {monthly payments x months}
  • extra charges for ‘wear and tear’
    {trust me: EVERY dealer knows how to overcharge on every
    ding and scratch they see. There are reports on this}),

you have to hand the keys back at the end of the lease and say “bye bye”. The dealer, of course, smiles, thanks you for your money, and then sells off the used car as (and this makes me chuckle) “previously enjoyed”.:rolleyes:
Now, not only that… but all those things you were thinking about in regards to making the car “your own”? (Sweet 3-piece alloys / Aftermarket body kit / Engine chip upgrade / Tuned exaust / Pimpin’ Blaupunkt Stereo / Tinted windows / Momo steering wheel / upgraded suspension / whatever you have in mind.)
Forget it.
Remember: The car isn’t yours.

Athena hit on something which I’m going to take to the next level:
‘Buying’ a car is not ‘affording’ a car.
If $30,000 droppped on your lap right now, you could say,
“Wooohoo! I can afford to buy a Beamer!”
Sure. Then you’d have a nice-looking, shiny driveway ornament. Because you need it to “go”, right? So… gas.
No problem.
Ask you parents how much they spend on gas on a monthly basis. (Being who you are with a flashy new car, I suspect you could multiply that figure by 1.5 - You wanna “cruise”, right? You wanna go to friend’s parties, right? You’ll be out driving more often than your parents-I was at your age.)
Oop. But then a cop pulls you over because you have no plates.
Right. Plates.
And insurance. (Now I don’t know how much that is, but I do know that teenagers in the US are targeted harshly on this. Check your local insurance agent to realistically look at the numbers)
Now when you go downtown, you have to pay for parking.
…
After all that… you will need to set aside some cash for “unknown inevitables”:
Parking Tickets.
Speeding tickets.
Oil.
Tire patch stuff.
New tire. (Most warantees do not include a flat tire. Check this)
Auto Club. (Although both MB and BMW have 24-roadside assistance programs, but check if they have some monthly cost on that.)
Wiper Fluid.
Car wash tokens. (Or soap and sponges if you’re doing it at home)
Fuses.

…and if, Diety forbid, something MAJOR happens to the car that ISN’T in the warantee. The parts on German cars (even VWs) are NOT cheap.

Trust me on this. I want a nice toy as much as the next guy, but I’d seriously reconsider the value of an off-the-lot car.

You want a new toy? Go out and find a classic. Get another car that may not be so shiny around the wheelwells. See if you can find an old MG, convertible 'Stang, Austin Healy, or some other just-this-side-of-rustbucket that’s got some character to it. Even an older Beamer or Benz (with a more powerful engine). If you’re going to dump money into a car anyway, why not have it be your own? After two years, YOU can decide what you want to do with the car (keep/sell/upgrade), and while you own it, YOU can decide what you want to do with it (repaint/upgrade suspension/powerboost engine-install nitrous/install stereo).
Besides, the look on the face of the guy who DID lease the Benz is just priceless when you leave him at the lights in your NO2-ed older Miata.

Of course, that’s just my opinion, and you can feel free to ignore it. If you choose to do so, that’s fine, it’s your decision and only you have to be cool with it.
In that case, I’d opt for the 323 Coupe. 2-doors always look better.
OLT:
The cars you see on music videos? Most of them are rented for the vid shoot. That’s right. It’s all part of the image they sell to people like you and me.

20

dwala: What do I discuss on a car message board? Oh, things like common problems with the car (thankfully few with the Z3), maintenance & cleaning, great drives, what the best color is, speculation on what the new model year will be like, etc. etc. etc. If you’re into your car, find the message board for it. I’ve learned a TON of stuff, from “What’s the must-have dealer options?” to “Can I really trust BMW when they say I can go 15K between oil changes?”

Evnglion: Good choice. My cousin bought a jetta on a lease when she was around 17. She really likes it. The only thing she complained about is that she did have to go ahead and buy it outright after 3 years, which means she paid WAY more for the car than what she would have paid if she bought it outright. Also, she was very surprised at the change in insurance rates when she moved from Wisconsin to Colorado. They went WAY up.

Another thing - have you thought about the cost to register the car every year? It’s based on the car’s value. I’m guessing about $400 for a new Jetta - not a trivial sum.