Howdy, Stranger!

It looks like you're new here. If you want to get involved, click one of these buttons!





High End Luxury Cars

1339340342344345771

Comments

  • Of course I don't remember the exact number, but I think top 3% is around $250,000/year. I think depends on how you look at it, a lot of these people can afford "the lower end" of these premium brands if they're willing to. however, like I said, just because you can afford to buy them doesn't mean you can afford to run them, when you factor in insurance, maintenance, depreciation (big one!) that's probably why you don't see too many of these cars. I am in the top 9% myself (just me individually.... and yes I know, doesn't mean much in this particular forum) according to the tax data if I remember correctly, a lot of people probably think I could afford to finance $45,000 on a car loan when the payment is about 8% of my gross, but because of my tolerance level, I feel that's way too much. I am very comfortable with my current debt to income ratio of 3.6% on my car loan.

    However, I also have friends that are perfectly comfortable with a 20% DTI car loan. If you put down $60,000, finance $110,000 on a Gallardo, that's about $2,000/months for 60 months. That's about 10% of your gross if you make $250,000/year. I think 10% is probably ok with a lot of people, but if maintiancen/cost of operation is another $1,500/month, that's going to make a lot of difference.
  • lexusguy,

    I think you should check out the new XJ8L, the interior is vastly improved, alumnium structure makes it much more faster and more fuel efficient than its competitors.

    I remember the first time I stepped into a new XJ8L, I was totally amazed by its luxury, I think that ultimately influenced my decision to purchase a Jag S-Type.
  • sysweisyswei Posts: 1,804
    OK, I cry "uncle". Rolexes are at least capable of dependably telling inaccurate time. And at only 100x the price of a atomic-clock-resetting Timex, payback on owning a durable Rolex as compared to buying a new Timex every 3 years, is only 300 years (well, maybe add a few decades for the Rolex-recommended cleanings)...I'm not sure how that's consistent with the notion that few Rolex owners bought their watch for show, but there must be some explanation.

    Anyway, back to cars...
  • sysweisyswei Posts: 1,804
    Toyota officials let slip in Tokyo that the LF-A is going to have a V10 engine, developed from the engines in Toyota's F1 cars, which is thought to develop over 500bhp and give 200mph-plus capability. Although the engine is front- rather than mid-mounted, the LF-A will be rear-wheel drive, and Lexus has promised "the ultimate weight balance", "extravagant comfort" and "precision operation."

    source http://www.channel4.com/4car/gallery/spyshots-2005/L/lexus/lfa-spider.html
  • oacoac Posts: 1,594
    Thanks, Pat. Didn't Dewey accuse Lexus owners as stuck-ups ? Please note the Rolex owners as Jag, MB, Lexus, etc. owners.... :)

    Back to the HELM discourse, while the Ferrari's, Lambo's, RR's are not purchased bcos they are the most reliable, it sure does not hurt if they are. Some of these owners probably have it chauffered anyway. So if it breaks down, they have people who will take care of it without them even having to lift a finger beyond writing the check.

    BTW, there are more Maybach's on limo linesin posh hotels than on driveways. What a disaster from MB.... And how much better to point to failure than to re-design your high-end S-class in the mold of the failed Maybach experiment. What were they thinking ?????
  • oacoac Posts: 1,594
    Sorry, syswei, but these are old news.... C&D or another auto rag had carried the LF-A specs many months ago....

    The real unknown is what Lexus has up their sleeves for the next LS ? Now that would be some info leak to really look forward to....
  • deweydewey Posts: 5,243
    Thanks, Pat. Didn't Dewey accuse Lexus owners as stuck-ups ?

    Huhhh :confuse:
  • sysweisyswei Posts: 1,804
    got this email, announcing a launch party and special lease rates at the same time:

    Subject: For a limited time, special lease rates on the R350

    Special Advertisement from Mercedes-Benz

    The R-Class is turning heads with its first-class comfort and style.

    Now through November 30th, special lease rates are taking center stage for the R350 with Premium Package.

    The 2006 Mercedes-Benz R350 with Premium Package includes:

    Entertainment Package with 6-disc CD changer
    Panoramic Roof Package
    Power Tailgate
    COMAND DVD Navigation
    Tele Aid

    [$599/mo. 39 months, $0 first month's payment $2600 cap cost reduction, $795 acquisition fee]

    There's no better time to drive the R-Class. Take advantage of special lease rates and the first month payment credit, available now through November 30th.

    R-Class Dealer Launch Party October 26th — See and Be Seen with the Class.

    Contact your authorized Mercedes-Benz dealer today for more information on this exclusive event and the limited-time special lease offers on the R350. Don't miss the opportunity to experience the R-Class for yourself.


    I guess it ain't flying off the lots.
  • oacoac Posts: 1,594
    What it that person isn't into houses like you are? What if they like cars more than houses? What is an "ordinary" person? That is clearly a snob remark if there ever was one. Why is that a Mercedes/BMW buyers buy for status, yet Lexus owners are these meek, non status seeking people, yet they drive the most wannabe-status, "I'm a luxury brand to" luxury car on the planet?

    I am sure Len can defend himself against any assertions, but let me point out that if there has been a consistent thread in the Lexus camp, its that we believe, backed with verifiable factoids, that Lexus is the most reliable full-size luxury sedan in its class.

    As to marque or brand... it is MB fanatics that always uses this to trump Lexus, claiming that MB's prestige and marque justifies its lofty price, and the breadth of MBs offerings especially in the higher end where Lexus doesn't even compete, makes MB the marque brand. So now, we get Merc1 accusing Lexus owners of being snobbish... what an idea !!! What would you consider all these talk about MB being a higher brand, higher status than Lexus ? What is that if not snobbish?

    Excuse my cheekiness....
  • deweydewey Posts: 5,243
    that Lexus is the most reliable full-size luxury sedan in its class

    Most "reliable" is as significant as being most"fuel efficient" or having the most "cargo space" in a full size luxury sedan. These three things do not define luxury or performance in any car since you can receive all three in one inexpensive non-luxury non performance vehicle called a Toyota Matrix which is renowned for its reliability, fuel efficiency, and cargo space!

    Again, when did I commit such a notorious crime as calling "Lexus owners stuck up"? I remain innocent until proven guilty!
  • ljflxljflx Posts: 4,687
    OAC - not wasting my time on that one. He totally missed the point.
  • brightness04brightness04 Posts: 3,151
    10% pre-tax income every month on one car payment is not okay at all; it borders on the insane when one is in a high tax bracket, if you ask me. I barely spend 10% of my pre-tax income on housing, and much of that is tax-deductible, unlike interest on cars. Don't forget, out of the $20k or so pre-tax income every month, the taxmen at federal and state level take out about $9k! After all the life's necessities and retirement contributions, I'm lucky to have $3-4k a month to play with (assuming credit card bills do not eat that up first). There is no bloody way I'd spend half that on a single piece of depreciating asset and another half of the remaining half to keep it running (I agree with you on the high cost of operating such a beasty). Most of my friends that make comparable amount of money (ie. the working upper middle class) also drive cars in the $30-40k range (G35, FX, GS, etc.), although a sub-$100k LS, S or 7 series can probably be arranged if one is inclined to drive a full-sized car (and have a second car at much lower price point or kept for a longer time). Only the 7-digiters (or at least half mil a year, or a doubling from where we are) can really afford the brand new ultra lux in the $170-350k range (I'm sure they may also have their own financial limitations even at that higher level of equilibrium). BTW, that also explains why most riders of ultra lux vehicles are old farts (if only I can be so luck when I'm old ;-)
  • oacoac Posts: 1,594
    These three things do not define luxury or performance in any car since you can receive all three in one inexpensive non-luxury non performance vehicle called a Toyota Matrix which is renowned for its reliability, fuel efficiency, and cargo space!

    A Matrix is renowned for its reliability, fuel efficiency, and cargo space ? Maybe cargo space... You may not know it, but I do own a Matrix... and an LS. The Matrix is 2003, 42K miles and I can already hear squeaks and rattles, just a lil'.... The LS is '99 with 109K miles, and coffin quiet interior..

    Again, when did I commit such a notorious crime as calling "Lexus owners stuck up"? I remain innocent until proven guilty!


    As of this post... immodest = snob, in my books...But if you didn't mean it that way, I'd understand...

    dewey, "High End Luxury Marques" #10842, 25 Oct 2005 10:12 am
  • deweydewey Posts: 5,243
    You may not know it, but I do own a Matrix... and an LS. The Matrix is 2003, 42K miles and I can already hear squeaks and rattles, just a lil'...

    So I guess your experience with your one Matrix disproves that whole myth about Toyota reliability? Thanks for the clarification!

    immodest = snob

    Unlike the Japanese who bought an LS from Toyota dealerships these past 15 years, North Americans instead buy a LS from a luxury dealership called Lexus. Buying any car from a luxury dealership is not an act of modesty nor is it being "stuck up"!
  • ljflxljflx Posts: 4,687
    Most people that can afford these cars are $250K and higher in base salary plus bonuses, long-term bonues, stock options etc. In most cases they have enough money saved that a portion of the innterest income covers the car payments if they are leased or auto loans if they are not. Many of the leased cars carry their own tax deductions against self-income.
  • ljflxljflx Posts: 4,687
    The expensive Toyota cars are kept in a separate showroom - usually a separate floor from the mainstay cars in Japan. So they may not be sold separately in name but they are sold separately in class and mode of operation.

    Syswei - MB is dealing right now. I got e-mails on the E500 wagon (15% off) as well but nothing on the R-class. The R-class does not seem to be a hit as yet and that doesn't bode well for seeing an HPX.
  • Again, that depends on how you look at it. You might not feel comfortable at 10%, which I totally agree, but there are a lot of people that are perfectly fine with the 10% or the 20% limit. I personally don't to spend 10% of my total income on a car payment because it's out of my comfort zone, but again, that's just my view, and happens to be yours. BTW- this also validates my point on the total expense. The payment itself might be 10%, but the total cost is more like 20% when you factor the cost of operation, hence you really have to be making a lot more, and is what I've been trying to say.

    I am in the mortgage backed security business, buy loans in bulk and securitize them to sell them in the secondary market. People often stretch up to 45, 50% on their housing to income ratio, and lenders are fine with that ratio now days. You might not feel comfortable with that ratio, but a lot of people are fine, it's just the difference in how you perceive risk.

    Simple economy logic.
  • brightness04brightness04 Posts: 3,151
    That's precisely the point that I was making. The target audience for the ultra lux cars is actually much smaller than top 3%. IMHO, more like the top 1% (whose cut-off line is still only $350k) if not top 0.5%, which is nearly an order of magnitude reduction from top 3%.

    Regarding tax deduction on car lease and financing, actually IRS codes make it rather difficult to deduct lease payment in full for cars over about $35k even if it is used entirely for business purpose. That partially explains the popularity of cars just below that mark.
  • brightness04brightness04 Posts: 3,151
    Okay, here's the deal: 10% of pre-tax income for someone who makes $25k is not much more than 10% of his/her after-tax income because he/she pays next to zilch income tax, and chances are that the payroll tax portion etc. was never in the equation. 10% of pre-tax income for someone who makes $250k is actually nearly 20% of his/her take-home pay, thanks to the progressive tax system. 45,50% of pre-tax income on housing might be workable for a few years for a waitress who has large (percentage-wise) unreported cash income and have little tax liability on reported income due to low tax bracket and employer paying half of social security tax etc.; the numbers would be unworkable for someone whose tax bite is 40% or more of pre-tax income. You can probably find unwary 45,50% suckers buying $200k condo or starter homes on their way to their first bankruptcy, but the loan payments for million-dollar-plus homes seldomly take up 45,50% of pre-tax income of the borrower, unless the guy works for the mob (in which case he'd be paying with cash anyway).
  • oacoac Posts: 1,594
    So I guess your experience with your one Matrix disproves that whole myth about Toyota reliability? Thanks for the clarification!

    C'mon.... You claim that the Matrix is renowned for its reliability, blah blah blah... Then I tell you that the Matrix which began life in the spring of 2002, 3+ yrs ago is not a car to be called renowned in anything, maybe cargo space.... Then you turn it around like my Matrix experience is already a myth about Toyota reliability ? C'mon man....

    Americans instead buy a LS from a luxury dealership called Lexus. Buying any car from a luxury dealership is not an act of modesty nor is it being "stuck up"!

    First you claim "innocent until proven guilty", and then you try to rub it in that buying a luxury car is itself an act of snobbery ! Wonder why you drive a BMW and not a Kia ? Or why your wife drives an MB and not a Hyundai ? Were these family cars purchased because of their snob appeals ?

    I'm off this wagon cos its leading nowhere....
  • nvbankernvbanker Posts: 7,285
    Take heart. Both of my Rolexes keep lousy time.... :sick:
  • That waitress would then be qualified for the so called "stated income" program, which is fine, but she'll need to show some asset to support her "stated income", in order for 45% to 50% ratio to fly. I was actually referring to full doc loans. On stated deals, lenders are still hesitant to go up to 50% DTI ratio.

    On the super-jumbo you mentioned, a lot of lenders will still lend up to 45% DTI ratio on multi-million dollar loans, of course the LTV has to be low and you'll need compensating factors, but it's definitely not rare, a lot of these super-jumbos have ratios around 40-45%... and of course, these burrowers tend to have the so called "Option ARM" loans, in which they can choose a negative amortizing payment, of course I won't get into details about it in this forum.

    I would agree with you that you have to be in the top 1%, or making about $500,000 a year to comfortable own a say, Gallardo, but that's because I factor in the maintenance. The same applies to someone who makes $50,000, but can somehow manage to stretch and buy a BMW 330. If you make $250,000 a year, you can stretch and buy a Gallardo, but the Gallardo is actually a whole lot more expensive due to maintenance, depreciation, and service costs, hence my conclusion, if you make $250,000, you can afford to buy it, you just can't afford to run it. While the 330, although expensive, is not too costly to maintain and upkeep, so you see more people making less than $50,000 but drive a $40,000 car.

    Lastly, here's why I think you have to make $500,000 a year, to comfortablely afford and run a Lambo Gallardo. Your take home pay a month is about $23,000, you pay $6,800 in principal, interest, tax and insurance on your $1.35mm home. You spend about $3,500 a month for everything else, another $900/month on your Mercedes, another $800 on your Lexus. It's wise to have an investment property/second home, in which you have a $300,000 mortgage on, and the net cost after your rental income is $1,000/month. Your Lambo's monthly payment is $2,000, and another $1,000 to $1,500 depending on how much you drive, that still leaves you with $7,000, and if your CPA is a crook, you'll have about $10,000 left.

    Of course, everyone has their own view. My co-workers in between the income level of $500,000 to $1,000,000 don't own any of these exotics.
  • "You can probably find unwary 45,50% suckers buying $200k condo or starter homes on their way to their first bankruptcy, but the loan payments for million-dollar-plus homes seldomly take up 45,50% of pre-tax income of the borrower, unless the guy works for the mob (in which case he'd be paying with cash anyway). "

    Oh, and I want to add, the DTI (debt to income) ratio, actually doesn't have much to do with whether someone will be able to make his/her payment on time. Back in the 80's, DTI was the number 1 info that an underwriter check, and anything over 38% is an automatic decline.

    Now days, lenders weight a lot more on LTV, credit score, and assets. I've seen DTI in the range of 57%... and we still bought the loan... it's called risk based pricing. Contrary to popular belief, lenders do not want to foreclose on your home, the cost of a foreclosure is substantial for a lender. Go check with your local real estate broker and you'll know....
  • brightness04brightness04 Posts: 3,151
    I think we are in general agreement. It takes an income level well inside the top 1% club to afford one of those beasties.

    A bit off topic, interesting to know that borrowers of over a mil tend to go for "Option ARM"; are you talking about developers/flippers or actual buyers who intend on living there for the long haul? I see nearly two dozen million+ housese empty within a few blocks of where I live; waiting to pick them up on the courthouse steps someday . . . wife wants a house upgrade, and that's the only way I can afford one of those beasties.
  • brightness04brightness04 Posts: 3,151
    I know, in a rising market, foreclosure is a waste of time . . . the picture is different in a declining market; lenders would have a much stronger incentive for locking in value.

    it's called risk based pricing.

    "Junk bond" is just an unflattering vernacular term for high-yield bonds. Historically, the yield differential between residential mortgage-backed security and commercial loans had been tremendous, a rich ground for arbitrarge indeed as people start to buy houses to turn a profit instead to live in.
  • merc1merc1 Posts: 6,081
    LOL, you justify your point by 1 year of great sales? My bad on using the wrong words. Actually, these marques were dead long ago. Only some CEOs were fanatic about these cars and thus bought them at the expense of the employees. Example: this year, 2005, Bugatti Veyron is finally rolled out with many titles like being the fastest and the most expensive. This same year, VW lays off more than 20,000 workers in Germany.

    Yeah, my point being they aren't dead. They're on the comeback after years and years of neglect and fumbling. I agree about VW, but now the Piech isn't running the show they'll forget about this luxury car nonsense. That Bugatto project has to be the most awesome, but pointless and ill-timed car ever made! Engineering to death, but at what cost. Meanwhile we get base Jettas with a crap engine. Yes its all true.

    As far as what makes a sounds business I'm not arguing about because Ferrari and Aston, hell just about every European carmaker has teetered on death a few times so they aren't business leaders in that respect. I'm not sure what you mean by Aston-Martin is no longer British. They are as British as British can be. They're built and engineered in a brand new facility in England, only their engines are built in Germany. Yes their V12 did start out as a 2 Ford V6s, but I dare you to find one common part and I double dare you to tell me you hear any Ford in a Aston V12 upon start up, full throttle or idle. The Ford DNA has long been engineered away.

    In the United States, the most profitable marques (in terms of profit per car/suv) are Porsche at No.1 and Lexus at No.2. Is it a surprise? BTW, the most profitable company overall is Toyota, whose market value is No.1 in the world and more than double of GM and whose profit is more than the big 3 combined (if they do have a profit).

    Who cares? Sorry I can't get excited about this, its very, very, very old news and no one here was comparing any of the ultra-luxury brands to any of Toyota or Porsche. Totally irrelevant. You stated that Bentley, Ferrari, Aston-Martin, Rolls, Maybach etc were did and they aren't - thats all I'm debating here so please spare us the Toyota speech. Its silly to compare such tiny brands to Toyota on a profit basis anyway.

    M
  • merc1merc1 Posts: 6,081
    I think we can go back and forth on this, I do agree with many of your points, but ultimately, I think reliability is the number 1 issue that these brands had to work on, and it's not just simply sorting out all the bugs, but changing people's perception of its reliability. Poor reliability means poor resale value. Let's admit it, a lot of these rich people can afford to buy these luxury cars, but they still hate to lose 50% of the value after a few years. Also, in reality, a lot of people in the nation's top 3% income bracket can afford the lower end of these premium brands, but they just can't afford to run them.

    The only problem is that there isn't any mass tracking of reliability for brands such as Ferrari or Bentley. Secondly all of these cars take huge hits in resale, except the rare Ferrari here and there. Resale values and reliability are not part of the reason why people buy Astons, Bentleys and the like. These cars are toys for the rich and aren't subject to all this reliability talk. They might hate to lose 50% of the value in 3 years, but its been happening since the beginning of time and yet when a new Aston, Bentley, Ferrari etc. appears it sells out. Ferrari in particular sells every one of the 4000 cas they build every year. Every single one of them.

    Regarding Ferrari I'll go with the reliability theory, but with Bentley, Aston and Lambo its price, price and price. They all have taken off nearly a 100K off the price of admission to the brand. The Gallardo is roughly half the price of the Murcielago. That is the source of their comeback because editors still report Lamborghinis breaking down during roadtests. Magazines were only stating what they found to be the problem with these brands, not what the customers found - big difference.

    M
  • merc1merc1 Posts: 6,081
    My god did you feel that? The earth has moved because we actually agree on something. ;)

    You're right Bentley won't be as exclusive in a few more years because like I noted earlier I never saw many Bentleys until the Continental GT came out, now they're everywhere! They won't be able to maintain the momentum forever and at some point down they road they'll slow down, unless they go cheaper - something the current Bentley chief is against. They're even talking about making a Bentley SUV to keep things going at the current pace, a mistake imo. Personally, the only "Bentley" to me is the Arnage and upcoming Azure.

    Selling on "exclusivity" is not a sustainable marketing position; that's why practically all the brands selling on that point are owned by one mass merchandizer or another.

    I agree. This is why all of them belong to a much bigger entity. I'm just thankful that VW, Ford, and BMW value these brands enough to let them thrive.

    Now how does GM fix Saab?

    M
  • merc1merc1 Posts: 6,081
    BTW, there are more Maybach's on limo linesin posh hotels than on driveways. What a disaster from MB.... And how much better to point to failure than to re-design your high-end S-class in the mold of the failed Maybach experiment. What were they thinking ?????

    The difference that you're not seeing here is that the Mercedes S-Class is a known product, unlike Maybach. The S-Class will have a certain amount of buyers no matter what it looks like. Secondly the Maybach is overpriced in addition to being an unknown. They remain totally different cars and more importantly they're in different market segments. Maybach (and Rolls) developed these mega dollar monsters during a time in which the sky was the limit. Remember the Maybach concept first appeared at the Tokyo autoshow back in 1997. A lot has changed since then and they both overestimated the market for 300K cars. Rolls will always be Rolls, whatever that may mean to its buyers, but Maybach is a virtual unknown which is a huge problem for them.

    M
Sign In or Register to comment.