Fiscal Irresponsibility

So I was fucking around on cars.com and ebay motors and stumbled across an '07 Aston Martin Vantage for about $63K. Considering '09 Vantages go for about $150K and brand new '07 Vantages go for about $120K, I thought this would be a pretty good deal if the car was exactly as represented in the ad (which I think is a pretty safe bet, since it's through a dealership). I also think there's a little room for negotiation. I already have an SUV that is completely paid for and it's in excellent shape - I would not get rid of it. The AM would be a fun weekend car to have. I've asked a few of my friends for their opinion about purchasing the car and have gotten varying opinions.

Honestly, the only thing stopping me from getting the car is that we're in a massive recession. It's more of an optics point of view. Aside from one of my fellow associates at the fund, I would not tell anyone at work about the car, that's obviously not my style. I have a bonus burning a hole in my bank account earning a ridiculously low interest rate, and I've been saving as cash because it's difficult to decide what to invest in in this environment - and I've been hording it for co-investment opportunities with my firm, but so far no new deals have been done, and it doesn't look like anything will be done for quite some time (I have about 10-20K committed to discounted portco debt repurchases, however). Without going into detail, I have enough to buy this car outright in cash and still have a good amount left over.

Friends have mentioned that we're in a recession, I could lose my job, I have business school looming, etc. I can only say I'm on contract until 2010, with two more bonuses forthcoming. It's been expressed to me that bonuses are not tied to fund performance or the marketplace conditions. It's also been expressed to us that our jobs are completely safe. Business school is expected in 2010 and honestly, I'm covered in the tuition department.

The fact is, I'm simply in love with this specific vehicle. I could care less about Ferrari's, Porsches, Lambos, or whatever. With my current base salary I think if I watched my day to day expenses, I could afford to pay the monthly payments, storage, and insurance and still break even on a month to month without dipping into my bonus savings. That being said, anyone want to try talking some sense into me?

 

believe me the chicks will stimulate you. will no longer need bottles.

..on that end, when i make extravagant purchases, i feel guilty. but another way to think about it is that you're making a purchase and helping someone else out.

in all honesty, who the hell is going to be selling a used 07 vantage for 50% the brand new price, unless they were in a cash strapped position. then again, my idea of extragavant purchase is $500 weightlifting set from Bowflex.

btw, now that circuit city is liquidating, anyone know if iPods/cameras/laptops are selling at huge discounts?


The world has changed. And we must change with it.

------------ I'm making it up as I go along.
 

35k here.

But dude...pick that car up! I know it may sound irresponsible to spend so much money on a car when you would only be 'breaking-even' with your salary, but its fun to throw responsibility out the window sometimes.

If it was me, I'd go get it tonight and be ripping it down the streets by midnight.

 

Don't buy it, dude. You said you are going to buy it as a weekend car. Well, not sure where you live, but after the first excitement you might not use the car every weekend. So basically you will have that car sitting in a garage at least 5 days per week and then some weekends too when you decide to do something different. So your depreciating car will just sit there and cause you expenses. You could have a lot more fun on weekends with that amount of money doing something else....like renting that same type of car for those weekends when you actually want it. Much less hastle and expenses than actually owning it.

If you were going to sell your other car, I would say go for it. But just as a weekend car? Come on, you can do better things with your money.

 

My thoughts:

The Vantage is a great car, but I think you can get a high performance, great looking whip for less.

I'm a big fan of the Audi S5 and the BMW M3. Granted, the M3 will probably put you in a similar price domain, but you could probably get better terms and it would be a brand new car (which also happens to do 0-60 in around 4.5 seconds). If your heart is set on the Vantage, go for it, but I think there is a great deal of satisfaction that could be derived from either of these, somewhat more reasonable, choices as well.

 

If you were to lose your job in a month would you regret the purchase? Remeber - it is in your employers best interest to lead you to believe you will be gainfully employed and well compensated (even if that is not the case). This happened to me. Literally on a Friday after a few meetings I got a lot of praise from my MD and things were going great, by Tuesday basically everyone was fired.

If you have enough to support yourself for 6-9 months while job hunting and you wouldnt regret the purchase during those times, then I say go for it. It is a badass car.

Beyond does have a good point. The utility you have from the purchase will decline (fairly rapidly). In a year, when you've used the car a few dozen times, it probably wont be as cool.

 

I think there is a huge divide in ballerness between an M3 or S5 and an Aston Martin.

The Vantage is definitely an amazing car and after imagining myself in your situation, I think it would take a great deal of restraint to not buy one. That being said, why would you pay cash for it? Also, as I said above, I would definitely not buy it if I didn't own my current apartment since 65K+Tax would be a nice supplement to a down payment.

 

Make sure this is a legit deal too. I'm sure you've done your homework and everything, but I know from experience how dangerous eBay can be. Just a word of caution from a frequent eBay visitor. Otherwise I say get it. If you do get laid off in the near future I'm sure you'll be able to sell it and not take a loss.

 

Let's address the job security point first - I'm at a private equity fund where we're 90% deployed and have 12 portfolio companies, the associates are needed because if you got rid of one or two guys, it would be too much work for the remaining associates. As far as bonus is concerned, I spent the majority of 2008 in the midst of the same market conditions we're experiencing today, and still received the full bonus that was stated to me and this year's was orally stated to me when I signed on for a third year mid-2008.

To Elan's point and to address TheKing - I love the S5, as well, but there is a huge difference. And for the same amount of money (actually a fully equipped new S5 would be more than 55 or 60K) I would much rather have the AM Vantage.

Elan - would not pay cash for it, I would probably put 5-10k down and then finance the rest over 4 or 5 years, depending on the rate, and I rent right now because like I said, no idea where I'll be in 2010.

d52strick9 - yes, I would have six months expenses left in the account even if I decided to pay up front in all cash, which I won't. The fact is, I think I could manage my monthly expenses to where I broke even on my base salary without dipping into my savings the majority of the months (unless I had a big expense like a trip, etc.).

The one point I did feel was valid is beyond_brilliant's. At call it 1500 all in monthly cost, if I drove the car 2-3 weekends a month, you're paying 500 dollars per drive. That's something I need to think about, especially since I won't be driving it much during the winter. I'm also out of town on the weekends a LOT, so it might be more than that...

Also, it's a legit purchase. It's being sold by a Ferrari/Maserati dealership in NYC and I'd make sure they put a 1 year (at least) dealer warranty on it for free as part of my negotiations. According to the dealer, it's a trade-in that a guy made in order to buy a Ferrari. My main concern is that with the amount of miles on the car, I'll have to buy new tires soon which could cost 2K+. Again, another negotaiting point.

 

500 dollars per drive...I gues that would even be a low estimate then. Again, don't know where you live, but since you said you won't drive it much during winter, you probably can completely count out November-February. If you travel a lot on the weekends, then you will maybe drive the car 2 weekends a month tops. So in the end, it will be quite a lot of money for a few drives. Adding to that, since you said you don't know where you will be after 2010, and if there is the possibility that you could go overseas after 2010, then you might end up selling the car after 1.5 years or so for probably less than you bought it, so in the end you will loose money on a car that sat in the garage 85% of the time.

I can tell you are in love with this car, but still, my recommendation stands, don't buy it unless you can use this car as your every day car. This way you could enjoy it every day...not like 1 or 2 weekends a month....which seriously might make you feel guilty about having bought it. Otherwise, just rent yourself the car for those (few) weekends when you want it.

 

Well in my defense, this is not a car you really drive every day. You're not taking the Aston Martin to Costco to pick up wholesale toilet paper.

Even if I was in town every weekend, I'd still probably put 2-3K per year on the car, at the very max. If you look at the listings, most people that have '07's have about 2-8K milage on it.

So you're right, is it worth it? Maybe not from a dollar standpoint. But am I going to use it any less or any more than your typical AM owner? Probably not.

 

Yeah, sure, point taken, you're not going to drive it for every day errands. So I suppose it boils down to whether 500+ dollars per drive are worth it to you.

Personally, I think it would be cool at the beginning, but after a while it would loose it's excitement. Really depends on how badly you want it.

 

Hmm... interesting quandary. Have you considered just joining the car club? You get more variety that way, keep your working cap up and don't watch your assets depreciate in your garage. Not to mention the hassle of insurance, maintenance, etc.

There are a ton of good investments out there right now if you have capital to deploy. I was in a similar position, but decided to go a slightly different route... PM me if you want more details.

From an optics perspective, who gives a shit? Obviously I have no idea about your firm's culture but as long as you're relatively discreet about it I would guess no one would get too worked up; i.e. leaving the car keys on your desk all day, loudly offering rides to the HR chicks, etc.

Another thing to consider is real estate - the two biggest reasons is a) depressed prices b) lowering your effective financial aid base for b-school.

Another option, ask your boss to take a 6 month sabbatical and go live on a houseboat in Amsterdam.

 
GameTheory:
Car club is 10,000 a year to join - payments on this car would total about 13,000 a year, and I'd own the car...

But with the car club, you're not exposed to the depreciation, opportunity cost of the cash, or maintenance expenses (which can add up quick for a quality sports car).

Plus, if you suddenly need the money (laid off, etc) - you can quit the car club. Selling the car will be a lot tougher.

  • Capt K
- Capt K - "Prestige is like a powerful magnet that warps even your beliefs about what you enjoy. If you want to make ambitious people waste their time on errands, bait the hook with prestige." - Paul Graham
 
Best Response

Sounds a bit ridiculous, and I'd feel like a tool driving a sick car like that around, but I'm a simple guy. And I don't drive that much. Are you in NYC??? If you were in LA or something, I might spring for it if I were you.

And I'm in MC, so...haha. I might use my bonus for...10 days at the car club, but that's about it. The most important things are that 1. you make sure it works and get someone who knows something about cars to check it out with you and 2. you figure out how much you'll have to cut back on day-to-day prices.

Not to mention, if you're leasing/making payments, no one here needs to tell you that paying interest on a depreciating asset....just seems like a waste to me, personally.

Condos on Miami beach are going for 60-100k right now. Buy one of those, rent it out, and tell people you've got a condo in Miami, haha.

Let us know how much of a boner you have for it after you drive it. Good luck, man.

 

Would definitely not get the car. If you're like me, or any other human being I know, you'll get sick of it, and fast. Cars are one of the unique assets that decrease in value rapidly. Once the initial buzz wears off, it will be just another car for you.

I agree with Alphaholic's approach -- go real estate. In the current market there are a lot of opportunities out there that someone with liquid assets can take advantage of.

That said, can I interest you in one of these timeshares I'm selling???

~~~~~~~~~~~ CompBanker

CompBanker’s Career Guidance Services: https://www.rossettiadvisors.com/
 

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