Should I buy a sportscar as an incoming analyst?

Hi all,

I signed a FT offer a few months back in a LCOL city. The firm pays street comp so I should be looking at total compensation in the 150-200k range as an AN1. I don't have a huge connection to the city, but I know I don't want to be in NY/SF long term so I thought going this route made the most sense for me. 

I love corvette's and have never been a big car guy before. Given the opportunity I have as a young, single guy making a decent salary, I think that now makes the most sense to buy one if I am ever going to. I don't think I could justify having multiple cars while I have a young family, so my thinking is that I either get the car before I have a family, or wait many years down the road. 

I love the new C8's but they are unfortunately out of the price range as they are all around 100k. I will most likely be looking at used 2014-2017 c7's that will probably be around 40-50k. My plan would be to resell it in a few years without losing too much value to depreciation. Is this unreasonable as an AN1? Part of my thinking is that it will just be impractical as my only car if I have to move stuff or take people around/ mundane tasks. But I really want it and think this might be the best time do it.

Any thoughts?

Comments (54)

Most Helpful
  • Intern in PE - Other
Nov 8, 2021 - 7:23pm

The real sign that we hit the top is is the poster below you telling OP to put all his savings into Crypto, TQQQ, and UPRO instead.

  • Analyst 1 in IB - Gen
Nov 8, 2021 - 12:19pm

Hey, I'm a current AN1 in a similar position (Lucky I discovered the LCOL life hack too). While the money is very nice, I still drive a piece a shit because for me I personally rather invest the money into vehicles like Crypto, TQQQ and UPRO and get something really nice when I'm a bit older. But that is just my personal values. You won't be like all the other foolish guys in their mid-20s in your city driving their leased BMW on 80k salary. You could actually reasonably afford it, so it's your choice if it makes you happy life can be short. But one thing I would keep in mind is as an analyst (even WFH) you may not have much time to really enjoy the car and may be swamped pretty often. Just keep that in mind and congrats. Banking in a LCOL and being at the top of the chain as a 22 year old is a blast. 

  • Analyst 1 in IB - Gen
Nov 8, 2021 - 1:51pm

Yeah, exactly analysts typically live near the city center so I tend to walk even though everywhere is pretty drivable

  • Incoming Analyst in IB - Cov
Nov 8, 2021 - 1:02pm

There are plenty of enthusiast cars in the sub 20k and sub 15k range that are not as flashy as a Corvette. I love cars, too, but plan to daily a nice sedan and have a fun weekend car just for myself.

Nov 11, 2021 - 3:07am

Sub 20 I'd highly recommend a Miata for strictly recreational use. Those things can be thrown around as much as you want and are an absolute ball to drive on normal roads. As a heavy car enthusiast who has done Ferrari's and R8's, the Miata is still the most fun for your auto-enthusiast fun on most roads given you can thrash it around and not worry about some messy accident ever given how little power it has - but you'll never think of that.

  • 2
Nov 8, 2021 - 1:08pm

Depending on the car and your situation, it might be more optimal to rent it for a few days when you need that "kick". No need to worry about car loan, depreciation, parking cost, gas, etc. Enjoy dating before marriage. 

VP
  • 1
  • Associate 3 in PE - LBOs
Nov 9, 2021 - 3:24pm

You never have to be 25, it just costs more if you're under 25. The mininum age is almost always 21, sometimes 18

Nov 8, 2021 - 1:55pm

You can definitely afford it, and if it's important to you, go for it.

You can always penny-pinch throughout life and never enjoy the money you make. Think about the top 2-3 things that really matter to you, and that's where you want to spend some of your money. If having a nice car is one of those things, nothing wrong with that. 

Nov 9, 2021 - 12:38pm

I got a mid-2000's 911 Turbo for ~$50k that will rise in value over time to offset the increase in mileage. Should be able to put on 60k miles over 6 years and exit for what I bought it for. Smart path if you're down to find an older, semi-collectible sports car.

  • Intern in IB-M&A
Nov 8, 2021 - 10:30pm

Incoming analyst at LCOL getting a long range Model 3. Ik it's expensive but at least no gas and almost no maintenance

Nov 8, 2021 - 10:52pm

If you want to save a few pennies and still get the excitement of a corvette, highly recommend a c6 z06. Car is an absolute beast and makes nearly 600whp out of a naturally aspirated engine (with simple bolt ons). Will pull on most super cars on the highway. By far the most insane car I've owned.

Nov 9, 2021 - 12:57am

If you have no student loans or other debt (e.g., CC debt), and your family is comfortable, absolutely. Plenty of people will talk about focusing on investing and getting the best IRR but if you worked your ass off to get a great job and are making bank in a LCOL city, I dont see why not. This is assuming you live a relatively frugal lifestyle otherwise and truly love cars. If you are going to wake up early on a Saturday morning to wash and wax your C7 and then drive it out of the city down some nice snake tail roads, why not. If it will give you extreme satisfaction every time you walk into your garage, then make it happen. 

If you have worked out the total cost (including insurance, premium gas per month, garage parking and your monthly payment of course), and are ok with it, then why not? As long as you budget well within the other areas of your life, you should be fine.

99% of the folks on here will tell you no, but 99% of them view cars as just a form of transportation and maybe a way to flex. If you love cars, have always been fascinated by them, and have dreamed of having a beautiful car to call your own since before you can remember, do it. If you are a true enthusiast and have budgeted properly, it is a no brainer. 

Edit: one other thought regarding the C7. If you find a decent specced one with low mileage, you shouldnt lose too much on your purchase. If you care for it properly (e.g., only drive it on weekends and not in the snow), it is hard to imagine a scenario in which you put more than 10k miles on the car per year. Therefore, you probably wont lose much at all, relative to the fact that you get to play around with a 40-50k asset whenever you're in the mood. 

Nov 9, 2021 - 2:53am

If you're worried about people giving you shit you could go with something more discrete like an rs3. To most non enthusiasts it looks like a normal Audi but very quick stock and stage 1 can easily make close to 500hp. Can pick one up for low 50's.

  • Associate 1 in IB - Gen
Nov 9, 2021 - 8:58am

This is the right answer to me. Get something that to the average person is just an entry-level Audi/BMW but is actually stupidly fast and fun.

Nov 9, 2021 - 11:11am

I disagree as a stage 1 tune will heavily depreciate the value of the car and void all warranties. OP doesnt want this car for the next 10 years, just for a couple while he stays in this LCOL city. He wants something that wont depreciate heavily, and a modded car is the fastest way to lose value. I have owned multiple modded cars and am considering modding my current one further, but you have to know what it does to the value of the car. 

A C7 would be way more enjoyable than an RS3. If you are worried about how your firm views you, you shouldnt be getting either. 

Edit: To the guys recommending a stage 1 tuned RS3, that advice should be saved for serious enthusiasts only. Simply put, no one else seeks out those types of cars, and then takes it a step further and starts modding it. Picking out the optimal software, intake, and exhaust requires some level of specialized car knowledge. This advice would only be appropriate if OP asked for the best performance car with a quasi-low profile for under 60k, and stated he was into modifying his cars. Most people simply dont know the first thing about modding cars. 

Nov 9, 2021 - 8:33am

Dont buy a sportscar. Unless your an actual enthusiast you'll just come off as a total tool. Where are you going to drive it anyway? It's not like you can really open it up on roads in the U.S unless your willing to risk tickets and taking it to a racetrack is so expensive. Buy a motorcycle. You'll be able to afford a brand new bike and you'll get much more out of it. The depreciation on motorcycles is almost non existant especially for sought after models plus you'll get the opportunity to develop an actual skill and hobby that you can take all over the world. I just planned a motorcycle trip through the swiss alps for next summer.

  • Analyst 1 in IB - Gen
Nov 9, 2021 - 12:03pm

Bruh literally everywhere does this now for years it isn't new. NYC prestige whores brainwashed you.

Nov 9, 2021 - 9:40pm

Yes, but if this is your primary car I would do some DD on where your office is located, where you plan to stay and research those neighborhoods a little bit. If you're staying or working in a rough area (note downtown in a LCOL city can often be a rough area) be aware that car jackings/break-ins are more common than you think and a lux car is going to grab a lot of attention. If you have a parking garage at your workplace and apartment and actually have proper security in both places then you should be fine. If you have to park in a lot or shady garage I'd advise against it.

I understand the enthusiasm that you have, but it's helpful to have a dose of reality before you move. 

Array

  • 2
Nov 9, 2021 - 9:41pm

Do it. I'm thinking about getting a 60-100k weekend car in a LCOL city and make less than you. No loans on my head and working remote in my childhood home is why I am able to do it. Besides, depreciation on cars isn't crazy anymore if you buy the right one at the right point in the depreciation curve. Don't let the frugal doomers convince you to wait for prices to fall because it's not happening. I saw a 2006 E46 w 130k miles selling for $25k which is crazy to think when they were $20k with 70k miles just 3 years ago. You won't lose much if you splurge a little. I got my ISF for $20k in the beginning of the pandemic and can sell it for $28k right now. I don't even know what boring or unreliable junk I would even get for $28k anymore. $40k - $50k on a car is not as much as it sounds like. The top of the line, fully-loaded new Camry is going for $43k. Not saying I would ever buy a quad exhaust camry with red leather, but 40-50k isn't crazy by any means if you are passionate about cars and don't end up buying some stupid British car or a Ghibli that's gonna shit the bed at 60k miles

Array

  • 2
Nov 10, 2021 - 6:36am

You just got to check out tv series "Silicon Valley" 
Especially the 4-the season, where one of the characters buys himself a corvette 

Money makes money
  • 1
Nov 10, 2021 - 11:12am

If you've never been a big car guy before then don't blow a huge amount on a sports car. Start with something for more like 20-30k, see if you like it first. You can get into a really nice C6 grand sport vette for that much and they're not going to depreciate much. 

Nov 10, 2021 - 1:37pm

Do it! I'm a huge car enthusiast and an incoming associate in a LCOL area that will be making street pay. By the time I start, my only debt will be my mortgage, which is a paltry $1250 a month payment (modest townhome and will be there at least a couple more years). Already preparing my wife mentally for my splurge. I saw Toyota made a one-off targa version of the new Supra, so if they announce that they are going to make one, I'll be the first in line. Otherwise, I'm eyeing the new Nissan Z, M2 Comp, C6Z, etc. It's too bad gen 2 Viper GTS's have skyrocketed the last few years.

As far as what people think, screw it. I've been driving an 08 Civic with now 331k miles for 4 years. I worked my ass off to get this offer and will 100% be getting my shit pushed in as a junior banker. Might as well enjoy my commute.

  • Analyst 1 in IB - Gen
Nov 10, 2021 - 1:51pm

Just reading these as another LCOL analyst who drives a piece of shit makes me feel I should get something better idk hope I won't be judged 

  • Associate 1 in PE - LBOs
Nov 10, 2021 - 5:06pm

Similar to OP - moved to low cost city and picked up an Audi R8 (before prices went bonkers during COVID). Got a great deal, low miles and absolutely love driving it to / from work every day (it's my only car). I've put ~20k on the clock on it over the last 14 months (few charity rallies and road trips up north - put snow tires on, have a ski rack for it etc.) It's a great way to network too for people who share similar passions. 

Life is short and you never know when a life-changing event might happen. If you got the cash, enjoy it. Good luck in ownership.  

Nov 23, 2021 - 12:26pm

What you're really asking is "should I purchase a depreciating, luxury, non-essential asset for an exorbitant price tag while generating less annual cash flow than 1/3 of what the asset will cost me in total?" The answer is pretty much always going to be a resounding "no."

Array

Nov 23, 2021 - 11:54pm

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