S t r e t c h i n g To Buy More Than One Can Afford

hpmctorquehpmctorque Member Posts: 4,600
edited September 2011 in General
It's perfectly legal. Some would say that it's the American way. Who could dispute that living above or beyond one's means was a major factor in getting us into the financial mess we're in? Most of us know someone - a relative, a friend, a co-worker - who bought or leased more car than he/she could afford. Maybe they even had it repossessed. That's when your car owns you.

Do you have an example you'd care to share? Why did they do it, and how did it play out? Did they learn a lesson?
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Comments

  • lemkolemko Philadelphia, PAMember Posts: 15,261
    There's this pretentious girl at my job whose 29 years-old, still lives with her parents, wears designer clothes, blingy jewelry, carries a Prada bag and drives a leased red 2010 Mercedes C300 with lease terms that cost more than the payments were on my Cadillac DTS Performance. Her mantra is, "Nothing but the best for me!" When I was her age, I was on my own for over 11 years, owned a house, and had a car that was paid for.
  • euphoniumeuphonium Great Northwest, West of the Cascades.Member Posts: 3,425
    "living above or beyond one's means was a major factor in getting us into the financial mess we're in!".

    Living above the ability to pay is not the American Way. The minor example is the leasing of "over the top" vehicles including pickups.

    The biggest example is the thousands of "wanna be's" who purchased real estate they couldn't afford, thus did not deserve, leading to massive Negatives in the housing section. And when they find themselves under water, they walk away from the mortage. The same agreement that they read, understood, & agreed to the terms, but now do not feel any remorse or guilt by walking away.

    Have these scoflaws learned a lesson? I doubt it. :mad:
  • robr2robr2 BostonMember Posts: 8,805
    There's this pretentious girl at my job whose 29 years-old, still lives with her parents, wears designer clothes, blingy jewelry, carries a Prada bag and drives a leased red 2010 Mercedes C300 with lease terms that cost more than the payments were on my Cadillac DTS Performance. Her mantra is, "Nothing but the best for me!"

    The classic $30,000 millionaire!!
  • fezofezo Manahawkin, NJMember Posts: 10,379
    Indeed.

    lemko - in my book you are the one who really "nothing but the best for me" - you own those things you want. One day this girl is going to crash. You won't.

    Of course she could marry a neurosurgeon or something and wreck my whole theory....
    2015 Mazda 6 Grand Touring, 2014 Mazda 3 Sport Hatchback, 1999 Mazda Miata 2004 Toyota Camry LE, 1999.
  • andre1969andre1969 Member Posts: 24,885
    "nothing but the best for me"

    This is kinda sad, but whenever I hear that phrase, I think of National Lampoon's Vacation.

    "REAL Tomato ketchup, Eddie?", Clark asks sarcastically at the cookout, when he sees the "ketchup" is nothing but squashed-up tomatoes.

    "Nothin but the best!" Eddie replies, with a proud yet clueless smile.

    And, I guess after leasing that Benz, buying the Prada handbag, maybe "real tomato ketchup" is all that chick can afford. Another word of advice to her... I don't know why they call it "Hamburger Helper when it does just fine by itself! I prefer it to Tuna Helper, myself!"
  • fintailfintail Member Posts: 54,994
    I thought that line was just Clark trying to make Eddie feel better because there was no meat in the burgers, just the Hamburger Helper :shades:

    I haven't know anyone who took on a vehicle that was too much for their income, but I have known of a few guys with menial jobs driving cars like new STis and EVOs etc...but lazy trust funders don't count, I think.
  • hpmctorquehpmctorque Member Posts: 4,600
    edited September 2011
    We bought my wife's '07 Audi 18 months ago from someone who needed to downgrade because he'd lost his job. We paid the "private sale" market price for it, since it was exactly what she wanted, including the color, and we didn't want to take advantage of the seller's need to unload it. He replaced the A4 Quattro 2.0T with an '04 Civic.
  • berriberri Member Posts: 10,165
    When I was growing up we lived near a "new" rich suburb and an "old" rich suburb. The new rich all drove expensive vehicles, where many of the old rich had cars like Olds and Buick. Maybe the old rich learned about depreciation on a non-productive asset. Nothing wrong with driving something fancy if you like it, but it doesn't necessarily make people think more of you either (especially given they can be leased!).
  • hpmctorquehpmctorque Member Posts: 4,600
    Probably the only vehicles that influence peoples' opinions of you are the extremes. Think Rolls or Ferrari, or something at the other end of the spectrum.
  • lemkolemko Philadelphia, PAMember Posts: 15,261
    edited September 2011
    ...or very shallow people.

    These good-looking, well-dressed guys were at a club and met some very attractive girls. The girls asked what kind of cars these guys drove and they told the girls they took the bus. The girls immediately ditched the guys. The same girls later saw these same guys leave the club's parking lot, one in a Porsche 911 and the other in a Mercedes S63 AMG. Their jaws dropped. I guess these dudes wanted nothing to do with a bunch of materialistic gold diggers.
  • hpmctorquehpmctorque Member Posts: 4,600
    Those guys played that one right, assuming they didn't drive off alone.
  • lemmerlemmer Member Posts: 2,689
    A person commenting on an article stated that only posers trying to look rich drive 5-10 year old luxury makes. In my neighborhood, 95% of the time it means somebody bought a nice car brand new and they are determined to get as much value out of it as they can.

    I am so cheap that I bought my Lexus only after one of the doctors in the neighborhood drove it for 10 years. And I am not really expecting it to help my image one way or another.
  • fintailfintail Member Posts: 54,994
    I think a pristinely maintained old luxoboat is more impressive than a new one (which are often filthy and neglected themselves) - to keep an old one going and to show pride of ownership takes work and dedication, to simply buy one is easy. The neglected old cars show who has gotten in too deep.
  • steverstever Guest Posts: 52,454
    edited November 2011
    We have food stamps - why not "Car Stamps"?

    "About 1 in 4 needy U.S. families do not have a car, according to the Annie E. Casey Foundation. That's a serious handicap for the millions of Americans who don't have access to robust mass transit.

    A nationwide survey of 353 people who bought cars with help from a nonprofit group called Ways to Work found that 72% reported an increase in income. Of those who were on public assistance when they acquired a car, 87% were no longer receiving it a few years later.

    It's just a no-brainer that low-income families need cars.

    If anything, the government has hindered the working poor's access to cars. The 2009 Cash-for-Clunkers program, for example, put 690,000 running vehicles in the junkyard, making the used cars that remained more expensive."

    A hard road for the poor in need of cars (LA Times)

    Give everyone a Tata and watch the unemployment rate drop (just think of all the new jobs that would be created for people fixing those rigs ;) ).

    The article seems to think that welfare lasts forever, but most people get cut off after four years since the reform legislation back in the late 90s.
  • fintailfintail Member Posts: 54,994
    Or make a cheapo disposable car in the US rather than patronizing one that aids the less than ethical and progressive Indian government...
  • hpmctorquehpmctorque Member Posts: 4,600
    Great idea for converting welfare recipients into tax payers! By the way, I'll take two tatas.
  • michaellnomichaellno Member Posts: 4,120
    I read all three parts of that series on BHPH lots - the article cited just looks at the issue from the car-needy point of view.

    The first two parts talked about the business side of the industry - the corporations (like JD Byrider) who have dozens or hundreds of lots across the country, and the financiers on Wall Street who look at the returns these companies are getting and encouraging them to expand even further.

    The one think I took from the articles is that there are quite a number of non-profit organizations whose goal it is to get folks into their own transportation at low or no cost. There was a lady down South who bought a car for $1 so she could get to school to support her two young kids. She is now finishing a Masters in Nursing, is happily married and owes pretty much everything she's obtained to the car she got.
  • steverstever Guest Posts: 52,454
    Thinking about how the grocery stores and food industry embraced food stamps, I'd think the car dealers would be all over this. The mouse-houses that resell the same car 6 or 8 times, and charge 18+% interest, not so much.
  • corvettecorvette United StatesMember Posts: 9,147
    "...according to the Annie E. Casey Foundation."

    It's probably my sick sense of humor, but every time I hear their sponsorship on NPR and the blurb about helping children, I think their name is the Casey Anthony Foundation.
  • steverstever Guest Posts: 52,454
    I had to go look that up. But that's okay, I don't know who Annie E. Casey is/was either.
  • graphicguygraphicguy Edmunds Poster EmeritusMember Posts: 13,452
    Not sure what it's like getting a car loan these days. I know a couple of years ago, I kept reading that no one was offering leases because of the collapse of GM and Chrysler. Not sure about loans, either. If financial institutions are really tightening the reins, those who are trying to get a Benz on a Corolla income maybe SOL.
    2022 Honda Accord Hybrid Touring
  • robr2robr2 BostonMember Posts: 8,805
    I had to go look that up. But that's okay, I don't know who Annie E. Casey is/was either.

    Annie E. Casey was the mother of Jim Casey who founded UPS. He had no children and started a foundation in his mother's honor (a widow in the 1890's/1900's raising 4 children).

    According to aecf.org:

    "The primary mission of the Foundation is to foster public policies, human-service reforms, and community supports that more effectively meet the needs of today’s vulnerable children and families. In pursuit of this goal, the Foundation makes grants that help states, cities and neighborhoods fashion more innovative, cost-effective responses to these needs."
  • steverstever Guest Posts: 52,454
    There you go - need to get a truck guy to get cars into the hands of the working poor.
  • jennaukjennauk Member Posts: 1
    My other half took delivery of the new KIA Sportage top 3 spec with Satnav & the 'rest'.

    Our thoughts were around getting 'everything' we wanted, rather than what we needed. However, we did spend half an hour on the motorway, trying to get the cruise control to work. So far, it still does NOT work!

    While Matin played with the 'switches & knobs', I had my head lost in the driver's manual which genuinely is bigger than the local telephone directory!

    When KIA delivered the car, it was a case of 'here's your spare, here's your ignition, here's the lever to fill up, here are your keys, enjoy your car!'

    Oh, and don't forget, 'press this switch to fold your mirrors!'

    Yeah, so maybe buying the top spec was not such a good idea if we can't even get the cruise control to work!

    Will chat with KIA on Monday - no way for us to know if the cruise control simply does not work, or if it is so complicated to set it, that you need instructions on the windscreen!

    Will keep you informed on how things work out!
  • qbrozenqbrozen Member Posts: 31,029
    It's not that I can't "afford" my cars, but I do feel somewhat guilty that I blow so much money on them. Granted, my primary car cost all of $15k, but I do have 2 others to supplement. Add in my wife's T&C and 25-year-old Benz and we have a bit over $50k tied up in these vehicles and depreciating every day (some more than others). BUT, on the other hand, that's an average of $10k per vehicle. So it all depends on how you look at it.

    '08 Charger R/T Daytona; '67 Coronet R/T; '13 Fiat 500c, '21 WRX, '20 S90 T6, '22 4xE. 62-car history and counting! MB Sprinter and '92 Nissan Gloria on the way!

  • andre1969andre1969 Member Posts: 24,885
    It's not that I can't "afford" my cars, but I do feel somewhat guilty that I blow so much money on them.

    Same here, and I'm finding that the older I get, the more adverse I am to spending large amounts of money on cars. Psychologically, it feels like the $7500 I spent to buy my Park Ave two years ago "hurt" more than the $22K that my Intrepid cost me, twelve years ago!
  • michaellnomichaellno Member Posts: 4,120
    Psychologically, it feels like the $7500 I spent to buy my Park Ave two years ago "hurt" more than the $22K that my Intrepid cost me, twelve years ago!

    Yeah, but didn't you make payments on the 'Trep ($347.xx) and wrote one big check for the PA?

    I'm guessing that if you decide to sell the PA to the roommate, dump the Silverado and get a newer DD you'll make payments, since everything you've been looking at has been between $15-25K.
  • fezofezo Manahawkin, NJMember Posts: 10,379
    I think this is part of the aging process. I thought little of the $400 a month payment on the Windstall but now dislike going over $300 a month on a car when I have more money.
    2015 Mazda 6 Grand Touring, 2014 Mazda 3 Sport Hatchback, 1999 Mazda Miata 2004 Toyota Camry LE, 1999.
  • andre1969andre1969 Member Posts: 24,885
    Yeah, but didn't you make payments on the 'Trep ($347.xx) and wrote one big check for the PA?

    Yep, the Trep was $2000 down and $347.66 (that number will probably stick in my mind for life) for 60 months. I was also able to psyche myself into justifying the Intrepid. I had just refinanced my mortgage a few months before, saving around $200 per month. And I estimated that, compared to the '89 Gran Fury police guzzler I had been driving, the Trep would save around $125-150 per month in fuel. So, right there, that just about covers the monthly payment. Of course, there were other factors, such as insurance on the Trep, and the fact that while the mortgage was ~$200/mo cheaper, that was also ~$200/mo less that I could write off on my taxes.

    I was also still delivering pizzas back then, and in a good week, would make roughly that monthly payment. And I had the option to pick up more nights if I really needed to.

    So, in the overall scheme of things, the Intrepid really didn't affect my monthly expenses, other than the initial hiccup of the $20000 down payment.

    I'm guessing that if you decide to sell the PA to the roommate, dump the Silverado and get a newer DD you'll make payments, since everything you've been looking at has been between $15-25K.

    Yeah, and I'm still procrastinating on that. I really don't want to get back into monthly payments. Plus, my automotive tastes have been all over the map lately. Heck, my most recent fixation is a 2006-2007 Lucerne V-8...even though initially one criteria was that whatever new car I get has to get better fuel economy than the Park Ave!
  • fintailfintail Member Posts: 54,994
    I'm that way. Even in 2006 when I bought my current car, I didn't really wince when I put the money down and made the first payment. But the final payment 4 years later had me never wanting that monthly liability again. I passed the big 3-0 right around the time I bought the car, maybe that did it.
  • steverstever Guest Posts: 52,454
    edited November 2011
    My Last Car Payment was... in 1982.

    Oddly enough, I wouldn't mind having one so much these days. Maybe because there's no mortgage to worry about right now.
  • lemkolemko Philadelphia, PAMember Posts: 15,261
    edited November 2011
    I feel the same way too. I think you don't feel bad about spending large sums of money on a car when you're younger because you feel you still have a lot of time to make up for it. When you get into your 40s, you start to realize you don't have as much time. Getting married and having children accelerates this feeling.
  • berriberri Member Posts: 10,165
    I think as you get older you start to realize that experiences trump possesions. There aren't those many cars out there that will give you experiences like in the old days. But don't worry Fintail, when you move your [non-permissible content removed] down to Georgia all you''re gonna need is a beat up redneck pickup truck anyway - just kidding!
  • andre1969andre1969 Member Posts: 24,885
    I think as you get older you start to realize that experiences trump possesions. There aren't those many cars out there that will give you experiences like in the old days.

    that could very well be. In my case, I've never felt the need to buy an expensive, flashy new car, but there are lots of old cars that I really love. But, I find that the older I get, I'm more and more content to look at them at car shows, rather than own them. It's kinda like being a grandparent I guess...you enjoy the grandkids for some good times, but then send them back to their parents who have to deal with all their problems!

    Plus, I think I'm really starting to get into a wanna-be early retiree mindset, and a dollar saved is actually worth more than a dollar earned, because you don't pay tax, social security, and medicare on the dollar saved!
  • steverstever Guest Posts: 52,454
    edited November 2011
    You don't own stuff, it owns you.

    That's especially true with "classic" cars I think.
  • andre1969andre1969 Member Posts: 24,885
    You don't own stuff, it owns you.

    That's especially true with "classic" cars I think.


    Back over the summer, when my '79 5th Ave blew its power steering pump, after I already put a lot of money into it, I had thought about retiring both it and my '79 New Yorker base model. I figured that even if I junked the damn things, they'd save me a lot of money in the long run, in insurance, registration, repairs/maintenance, etc.

    But, a couple weeks ago, I paid a mechanic on the side to fix the power steering pump on his own time, in my garage, and after it was fixed, I gotta admit, it felt really good to slip behind the wheel of that beast again, and suddenly any desire to get rid of it, or the other NYer, totally slipped my mind.

    But, who knows? As I get older, I might tire of them, eventually. I've decided, too, that my next old car is going to be a '61-62 Cadillac. That is, unless something else happens to catch my eye! :shades:
  • fintailfintail Member Posts: 54,994
    Houses too - mortgage, taxes, neighbors, maintenance...I can have more fun in a car :shades:

    The way I see it now, I can have a car payment, or I can go on a couple trips per year, indulge myself in the old toy cars I like, and still have something left over.
  • fintailfintail Member Posts: 54,994
    Having two nice enough paid for cars isn't a bad thing. I look at the frightful depreciation on just about anything, and I can't justify it.

    From what I can see, if I moved to GA, I would need either a jacked up pickup, an Excursion sized SUV for off roading in the vinyl siding orchard where I'd live, or an old domestic boat on 26" wheels :shades:
  • berriberri Member Posts: 10,165
    ...and don't forget the rifle or shotgun to blow away those traffic camera's and expressway red/green ramp control lights.
  • kernickkernick Member Posts: 4,072
    I'm in my early 50's and really don't have any other expenses then the basic utilities, food, gas, and insurance ocntributions. I also contribute around 20% to my 401K. I help my stepsons and wife a little too.

    My theory these days is my auto budget whether for a primary car or a primary and "fun" vehicle is that - I pay cash, and any extra $ to keep it on the road does not affect my lifestyle. That means the car does not affect if I go out to eat ... we do use coupons, wait for sales, and redeem all sorts of promotions. So there is no profligate spending.

    But like I said - if it's even close to affecting my lifestyle, I don't buy it. So I've been putting off buying a "fun" 3rd vehicle for the family, and instead "invest" the tax and insurance savings in an extra cruise or vacation each year. I satisfy my car-art desire by looking at glossy photos and car shows. And I waxed my car on Sun. which I hadn't done for months, and I almost got that new car feel. :)
  • kiaramkiaram Member Posts: 2
    I guess it's human nature to want for something more than what he/she can manage to sustain.
  • andysdandysd Member Posts: 87
    edited November 2011
    I love that story. This is the only car forum thread I've seen where contributors play nice, so I had to join in. A couple of times I tried to add what I thought was an objective comment on other forums, only to be attacked tangentially.

    I do know one individual who drives prestigious cars and isn't a phony. He's a movie actor who must receive a pretty good monthly check from the Actors Guild or some such. At 85, a year younger than I am, he still acts in movies sometimes. He's American, born in Mexico, and pretty well known in Latin America. Currently he has a red F430 he bought new. He also wanted an open car so he bought a '95 Ferrari cab, but I don't know the model, plus a new VW wagon. He drives with gloves and a Ferrari cap, still races a newish French racing sailboat. Since I've known him (he lives across the street), he's bought and sold a new yellow Ferrari Marinello, a Mercedes S, and two new Boxster S's.

    Even if I could, I wouldn't drive an expensive car during a time when 46 million Americans live below the poverty line.

    After reading of the Honda Fit's surprising performance in Car & Driver's emergency lane change test, I bought a red 2011 Fit Sport 5mt, put on some 17" Kosei Racing wheels with 215/45 Kumho SPT's that were sitting in my garage from an '04 Civic, and ride with his Ferraris on our East County San Diego twisty roads. I'll leave it you to guess which car is faster.

    This was just some meandering no one will read.
  • nvbankernvbanker Member Posts: 7,239
    edited November 2011
    Amen, Fintail: I love cars. I have always loved cars. I love cars more than money. Therefore, I treat myself to nice cars. Not over the top supercars, just nice ones. Like my Lexus LS460. I don't consider that an extravagent car, when lots of folks spend much more than what it cost me for their tricked out 4 wheel drive F-350 Crew Cab, Powerstroke Diesel, Lariat, Amarillo edition truck. And they're everywhere in the west here. So I don't feel too badly. Doing so has never caused me to give up anything necessary, or even some things optional, so again, I don't feel too badly about it. My wife does not care what she drives, will only drive Fords, and so has had Explorers since 1994. In fact, she refuses to drive a luxury car of any sort, even a Lincoln. So I don't drive more than I can afford, but some would say I have wasted a fortune since 1990, driving unnecessary luxury cars. But, when I'm lying in a bed at the hospital dying, I'm sure I wouldn't be saying, "gee, I'm sure glad I drove a Focus all these years instead of a Lexus....it was sure worth it:! Funny, nobody ever criticizes a $72,000 pickup truck.... ;)
  • fintailfintail Member Posts: 54,994
    It's not hard to justify a nice car when one examines how others blow money. For example, I brown bag my lunch every day. I know many who spend $10+ a day on lunch. That alone is a lot more than it costs me to care for both of my cars. Done deal :shades:

    And especially if you buy gently used, you can get a nice highline car for the price of a more "normal" car or some dumb truck like you mention. Probably for most who post here, driving is part of the "experience" of life, and is worth the price of admission. You're lucky to have such a reasonable wife too ;)
  • nvbankernvbanker Member Posts: 7,239
    I do buy my luxury cars used, 1 or 2 years, and save tens of thousands that way, making my luxury purchases not much more than a new Explorer Limited. It helps justify my lust. I have a good friend with far more money and net worth than I who drives an 02 F-150 with 140,000 miles on it, and his wife has a 99 Camry with similar miles, and that's his obsession. Saving money. Probably why he's richer than I am. He thinks I'm crazy, and I think he's crazy, and we argue about it. Whatever floats your boat though, you should do. That's how I feel. A Lexus floats mine.
  • lemkolemko Philadelphia, PAMember Posts: 15,261
    I've seen guys like that before. They make their widows very happy! I just hope he doesn't have any ne'er-do-well kids who will blow the fortune he had amassed.
  • fezofezo Manahawkin, NJMember Posts: 10,379
    Sam Walton was the saving type. Drove an old pickup til the day he died.

    I don't imagine his kids are following that example.
    2015 Mazda 6 Grand Touring, 2014 Mazda 3 Sport Hatchback, 1999 Mazda Miata 2004 Toyota Camry LE, 1999.
  • lemkolemko Philadelphia, PAMember Posts: 15,261
    I think they have Sam Walton's old red and white Ford F-150 on display at Wal~Mart headquarters in Bentonville, AK.

    His kids most certainly aren't following his example - especially his daughter Alice who is a hostile drunk who has been arrested for DUI umpteen times. That's the trouble. The man who worked hard and built an empire is gone only to have his spoiled entitled children squander it and stain his legacy. If Sam came back saw what became of Wal~Mart and his family, he would never stop throwing up.
  • robr2robr2 BostonMember Posts: 8,805
    ...especially his daughter Alice who is a hostile drunk who has been arrested for DUI umpteen times.

    Would twice be umpteen? IMHO, once is too much.

    But it looks like she's at least done something with her money in terms of philantropy. She's quite different than some of today's young heiresses whose life revolves around shopping and celebrity.

    BTW, Sam Walton stated in his autobioraphy that of his children Alice was the most like him but even more volatile than he.
  • fintailfintail Member Posts: 54,994
    But is she doing it for tax benefits or real cares?

    Some of us remember "Sam's American Choice".
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