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High End Luxury Cars

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  • sysweisyswei Posts: 1,804
    I don't know if you could view the link in post 10950; if not, lexusguy put the actual graph back here:

    lexusguy, "High End Luxury Marques" #10769, 23 Oct 2005 11:49 am

    I like the CDI too; it is unfortunate for MB that the US press is so fixated on hybrid now...detracting from some of the attention that should be given to modern diesel.
  • lexusguylexusguy Posts: 6,419
    The 9-5 is also being essentially ignored while GM throws more SUVs at the brand. The 9-5 wont be redesigned until 2008. Its needed a redesign for years already.
  • brightness04brightness04 Posts: 3,151
    There used to be a joke that went something like this: GM finanlly gets the car right after a few model years, then promptly completely redesign the model. The company may have taken the implied advice too far in this case ;-)
  • Bright,

    Yeah... I sure would love to be in that bracket. I am pretty sure I would buy a used Lamborghini Diablo if I were making $500,000/year, I won't drive much, and since it's used, payment should be lower.... I can still dream!

    On the off topic:

    Most of these super jumbos are actually owner occupied, because in reality, it doesn't make sense to spend $2mm on a property and rent it out, depending on how much you borrow, your rent would have to be $11,000 just to cover basic costs, and if you can afford to fork out $11,000 a month on rent, you would be crazy not to buy.

    Also, lenders are very careful with flippers, if we were to buy a $2mm loan, we want to see at least a 1 year prepay on it, if not 3 years. If the loan is $2mm, we'll probably pay $2,030,000 to $2,060,000 for the loan ,and that does not include the cost to securitize the loan and sell, the commission for my boss, for me ;) , the salary for our auditors, funders, and underwriters. If the borrower flips, we'll be in the red pretty fast. Of course, it still happens (sometimes quite a bit), but we're usually pretty careful with flippers.

    A lot of these high end Option ARM borrowers know how to manage their money well, they usually have their own business and they would rather have a negative amortizing loan than having a commercial line of credit in the 8-9% range. I think this is a good program if you know how to manage your money. If not, 30yr fixed is the conservative way.
  • I've read your posts with interest. Unfortunately, I think that your perspective is a little skewed because you are in the loan business, not the investment business. Most of your loans are going to people who, to be kind, are all flash and no cash. People who live from paycheck to paycheck, no matter how big. Mortgage bank people rarely see the very successful who pay cash. (Most "good" buildings in NYC won't even consider a coop applicant who needs more than a minimal mortgage.)

    I think that the superluxes like a Gallardo are bought by people who pay cash. Entrepeneurs, not salaried people, no matter how high the salary, or Wall Street types with a low base salary and a 7 digit bonus every year.

    I could be wrong though because I do think that there is a high turnover in these vehicles which suggests that some of the buyers are leasing them and might quickly tire of the payments.
  • nvbankernvbanker Posts: 7,285
    No, you're not wrong, blck. People who buy Gallardos DO pay cash, or at best, they lease 'em. Nobody finances them. If they did though, even an DTI of 70% would mean nothing on those incomes, where they have $100,000 discretionary income each month. That's the fallacy of DTI. You have to overlook it after a certain point.
  • It's true that we don't see the ultra riches (BTW- we buy loans as an investor... we're not the direct lender, we're actually in the investment business of loans.. or Mortgage Backed Securities), I am sure not just the Forbe 400, probably top few thousand could afford to pay cash to buy multi-million dollar properties if they so wish. However, majority of the "poor millionaires" still have to get a loan, even if you make a few million dollars a year, unless you're buying a small house, you will probably get a loan. Not to mention all these millionaires tend to be savvy investors in residential real estate, commercial properties, or small businesses. They might have a lot of equity, but their cash reserve is low, hence the need to get a loan.

    We do buy a lot of loans from $3mm to $10mm. As a matter of fact, even if you could pay cash, a lot of these ultra riches would rather get a loan. We've bought a $6mm loan, the borrower was a prince from the Middle East, I am sure he could've paid cash, but he's not. And really, it makes sense. Just like I mentioned, a lot of these ultra riches have their own businesses, the current prime is almost 7%, with a 2% margin and you're looking at a 9% commercial line of credit. It makes more sense to have a real estate loan around 6%.

    I don't think Gallardos are mainly bought by people that pay cash, because it's relatively affordable compares to most exotic models. I am sure people who buy the Veryon or the Enzo pay cash, but Gallardos, Continental GTs, are still affordable to people that are not on the Forbes 500. Of course, I am not in the car business, I don't know if this is really the case. I do know one person who makes a bit less than $2mm/year, who almost bought a Gallardo (ended up with a Flying Spur), would've financed it.... in between his loans, he would like to have cash in the bank.
  • sysweisyswei Posts: 1,804
    BMW passes Mercedes, but Lexus looms in the mirror
    It may not seem like a big deal over here, but Germany's BMW group expects to sell more vehicles than the Mercedes car group this year. If BMW comes out on top, it will be the first time in a decade.
    You can expect to hear some chest-beating from BMW execs in Munich. But there's no telling how long the Bavarian automaker can keep the crown if Dieter Zetsche recharges Mercedes.
    And then there's Lexus.
    BMW and Mercedes execs underestimated what Lexus could do in the United States, but they're not likely to make that mistake again in Europe or anywhere else.
    Even so, it won't be long before it's a three-way race.
  • merc1merc1 Posts: 6,081
    Yeah I noticed you had a Saab so I thought I'd ask. I've liked the current 9-3 since it came out and I was shocked by the prices I could get one for. This new turbo V6 Aero model is interesting, but.....

    M
  • merc1merc1 Posts: 6,081
    IMO it certainly beats the idea of Cadillac/Saab or GMC Truck/Saab platform sharing!

    Yeah it does. GM should be ashamed of themselves for doing that to Saab. Every other car company around that owns a little European brand has done a much better job than GM has with Saab. I haven't seem anything so ridiculous in my life. Who did they think they were going to fool with such a lame reskin? What is truly sad is that some people don't know the difference.

    M
  • lexusguylexusguy Posts: 6,419
    Looks nice, but underneath, its still a Chevy Malibu. Thats a really bad place to start, and even with stiffer springs and what not, its still not even close to being a match for a 330i, IS350, etc. The new V6 also isnt that quick. Pretty sure it still takes over 7 seconds to get to 60, which is only competitive with the 325i or C230.

    Edit: 7 for the MT, and 8 for the automatic. Hardly what I'd call impressive for a turbo charged engine with 250hp and 258ft.lbs of torque.. also barely any faster than the old turbo four.
  • nvbankernvbanker Posts: 7,285
    Wow, just like the old Ford vs. Chevy race in the States, eh? Course, now it's Yota vs. Honda, Ford & Chevy aren't relevant anymore. Wonder if that'll happen to BMW & Mercedes someday? Don't say never.....
  • merc1merc1 Posts: 6,081
    Well I'd have to disagree with you about it being just a Malibu because it drives nothing like a Malibu. The 9-3 isn't nearly the same rush job as the 9-7 and 9-2 "Saab" models are. The 9-3 was designed from the start as a Saab built on a shared platform, not a badge job like the other two.

    I agree about the performance, hence maying saying it was interesting with a "but" at the end.

    I think you have to want a Saab and/or appreciate them for their unique character because they've never, even been outright winners in any category at any time.

    M
  • lexusguylexusguy Posts: 6,419
    "The 9-3 was designed from the start as a Saab built on a shared platform"

    Yeah... but the shared platform it uses is not good enough to be competitive in this class. If GM wants the 9-3 to be able to really compete, it has to get the Sigma bits that underpin the CTS. Anything less, and its an also ran.
  • patpat Posts: 10,421
    are we losing sight of the High End part of our topic?
  • I was wondering tonight if some of the antipathy for MB isn't necessarily because of the quality of their current vehicles. Rather, maybe some of the people who knock MB do so because of the observed characteristics of people who now in these flush times and easy money own them? In a similar manner people might put down Lambo because of the kind of person who buys a Gallardo.

    In any case it is clear that the MB brand generates strong emotions in a way that Lexus does not. I don't think that many people see someone as a parvenue in new Lexus but they might if, say ,your hitherto Ford Explorer driving insurance guy delivered your new policy in an E Class.

    Whaddya think?
  • garyh1garyh1 Posts: 386
    I can't agree with this thought. I would imagine there are as many social climbers in Lexuses as in MBs; ditto for BMWs and whatnot.

    If anything, I think MB suffers the most because it has gone from one extreme to the other more than any other luxury brand. MB was the car that was always described as "bulletproof", "solid", "sturdy", "long lasting", etc.; much more so than BMW or Audi. Now which car is at the bottom of the relative reliability list - yep, MB. BMW sold on drivability and still does; Audi originally sold on value and later on "sexiness", and now at least still has sexiness (and perhaps still better value than MB). MB was always a compromise (perhaps better called a "perfect balance") on all the other traits, but reliability was its bailiwick.

    Hey, quite a few of us that bought a Lexus recently have gone on record here as really having wanted to be able to get an MB, and looking forward to being able to do so in the future when MB gets its reliability act together again. Of course, now some of us are also less than thrilled with the styling of the upcoming S.

    It's not antipathy you're observing, it's frustration!
  • ljflxljflx Posts: 4,661
    Great post. I came very close to the 2001 S500 but in the end I couldn't pull the trigger for the simple reason that I didn't trust the car to be reliable and the 2001 LS 430 was equal or better anyway. But I did love the S styling. Something is always wrong when a company is not delivering on the tenets it was established on. Now - nearly 5 more years of Lexus perfection in 3 different vehicles makes it almost impossible to think about switching. I have no doubt that the cars will stay perfect for another 1-2 years and that the 2007 LS will be perfect for it's lease duration when I take it. That's the way MB buyers thought in the past and that foundation rock is gone. The fact that the 2007 LS looks to be the far better looking car in pix (TO ME - plus the S looks worse and worse with every pix I see) so far and with higher level technology in the LS hybrid (and likely no stupidity with an i-drive clone) is also a big advantage. MB can't pull off simple electronics so a battery is going to be a lot harder to swallow. The Germans are starting to look like a group of beached whales to me. One puts in i-drive and everyone else follows suit even though it's despised by the market and the reviewers.

    Lastly - where is the stability of the brands styling? We went from an in your face bulk look with the S to a svelte styling that was revolutionary and did everything in its power to hide the bulk and now we are back to in your face bulk. Merc1 says he reads that the bulk is hidden in the 2007 S but everything I read says the opposite and the rear of the car looks pregnant to my eyes. So I see a simple thing here - a brand searching for its reliability roots in an electronics era where the country of origin has weaknesses (this is Japan's forte) plus a brand that is searching for how its marquee car should look. It's incredible to me that the S looks stale before it's even released. The evolution of the car should almost be changed so that the 2007 is the 2001 and the 2001 is the 2007. Then at least I'd know what styling direction they're going in.
  • sysweisyswei Posts: 1,804
    Speaking only for myself, there are a few things that shape my attitude toward MB and the people that buy MB:

    - Reliability. I would have considered a 2006 R-class but aside from some design issues I am very disappointed that MB said its overall quality issues had been fixed for 2005, yet it still trails BMW by a sizable margin according to JDP IQS...not to mention Lexus. Is is so funny that MB management initially put out a goal of being number 1 in reliability but then only months later backed down, saying "American tastes are different" so it can't finish better in American surveys. Gee, somehow other German brands like BMW and Porsche can do better than MB on American reliability surveys; so its a rather lame excuse. God only knows how their long-term reliability will look now that management thinks it has its quality problems "fixed" (except for those pesky American tastes).

    - Status. Since MB is the highest-status mainstream brand, I think the average MB-buyer is more of a status-seeker than the average Lexus-buyer. I guess I don't care for people who seek status above all else...and imho there are more such people driving around in MBs than in any other mainstream brand.

    - To some extent I just like debate for the sake of debate. It is "fun" to have an "opponent" so to speak.
  • designmandesignman Posts: 2,129
    Scathing criticism. I sense MB/Lexus the Sequel - Part XVII is imminent. Although I guess it has to be because the new S and LS are nearly at hand. Jim Bowie (Merc) and Davey Crockett (Dewey) will be scrambling for their muskets as the Mexicans, I mean Lexicans, come out of the woodwork.

    ;-)
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