Am I crazy for wanting to lease a top-of-the-line 3-series out of college?

Originally Posted by MrGoodBytes

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90 posts and no one pointed out insurance costs, especially with being under 25. I find the under 10K market to be difficult especially if your not very hands on with things. The other thing you really need to keep in mind is storage of said 2nd/weekend car. That will really limit your living arrangements especially around a major city. Especially when they require a dedicated garage. Trust me, it quickly becomes a bane, especially when you are really attached to it. Get comfortable with your job, sort out a semi-long term living situation and then see where a fun car sits in your life.
I got some quotes. The cheapest provider I found was Amica. Through them, my annual premium is around $2500 give or take, depending on the car. I put in my old A4, and it was $2300ish. With the hypothetical 335is, it went up to $2500. I wouldn't have this as a second car. I'd sell my current car and whatever car I do end up getting would become my primary car.

So I've been working a couple of years and I make a decent amount. Instead of blowing my money on a nice car (I've been driving old beater for the past eight years or so), I discovered styleforum, so I've been blowing my money on nice shirts, pants, ties, SHOES ( ) sportscoats and whatnot. By my guesstimate, I'm no better off now financially than if I had gone to buy a douchebag car right out of school. Although I do have an awesome wardrobe.

Anyhow, all I'm saying to the OP is - if you have a passion for something, go for it. I'm not saying that you go crazy and live beyond your means, but if you do your math and find that it works, why not? You're only young once. I don't think you would have gotten quite the same reaction that you got if you had posted this on some bimmer forum somewhere instead of SF, and in the same vein perhaps the people on that same bimmer forum would call out some of our more esteemed members for their expenditure on clothing. Why spend $700 on a pair of shoes when you can get shoes for $70 or less???

On a somewhat related note, I'm seriously thinking about an Audi A5 Sportback. I figure if I stop buying new clothes I could afford it easily. But that means I'd have to stop hanging out on SF...

Originally Posted by Nicola

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Oh and the hate for auto gear boxes. You know F1 has been running what is basically an auto box for over 10 years. So do many other racing series. It's to the point that these days the only place Ferrari sells many manuals is the US. If you think you can outshift a F1 driver

Originally Posted by Nicola

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I don't understand top of the line 3s. If you can afford a high end 3 you likely can afford a 6. A 3 is a company car.

3s are a lot more fun to drive. 6 is an ugly and overweight (worse than the 3) chick car.

Originally Posted by CouttsClient

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I believe a person making $75k (gross) annually cannot "afford" to buy a $65k car. Americans would be wise to learn this lesson.
This is stupid. First, we keep moving the 3 series up and up in value. It's actually probably about 45-50K for the 335. Second, a single person making 75K can easily afford $500/mo in a car payment, invest wisely, max out their 401K, save for the holy grail of life in this thread - a down payment on a home ( ), rent in a decent place, and still have money left over to blow on nice clothes and food. Not sure how that doesn't equate to 'afford'. Outside of StyleForum, where everyone is a closeted homosexual, take pictures of eachother's $700 shoes during circle jerks, live exclusively in rental studios in NYC, and only work as analysts in 2nd tier investment banks, $100-125K is actually the range for top end professional salaries in the United States. Someone making 75K in their early twenties is doing REALLY well and will be making 100-125K (or more!) by 30. They can afford a 3 series.

Originally Posted by username79

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This is stupid. First, we keep moving the 3 series up and up in value. It's actually probably about 45-50K for the 335. Second, a single person making 75K can easily afford $500/mo in a car payment, invest wisely, max out their 401K, save for the holy grail of life in this thread - a down payment on a home (

), rent in a decent place, and still have money left over to blow on nice clothes and food.

Not sure how that doesn't equate to 'afford'.

Originally Posted by GreenFrog

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The monthly for the 335 would be around $590 including tax ... the car's MSRP is around $58K

that plus the insurance cost equates to about $800/month not including gas and maintenance. Awful lot for a car when the OP said he will be using public transportation daily for work.

Originally Posted by gomestar

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that plus the insurance cost equates to about $800/month not including gas and maintenance. Awful lot for a car when the OP said he will be using public transportation daily for work.
Yeah, the OP also stated he was going to put 8K down on the car when he was negotiating the lease deal. My hypothetical example is a much more intelligent person than the OP.

Originally Posted by username79

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This is stupid. First, we keep moving the 3 series up and up in value. It's actually probably about 45-50K for the 335. Second, a single person making 75K can easily afford $500/mo in a car payment, invest wisely, max out their 401K, save for the holy grail of life in this thread - a down payment on a home (

), rent in a decent place, and still have money left over to blow on nice clothes and food.

Not sure how that doesn't equate to 'afford'.

Outside of StyleForum, where everyone is a closeted homosexual, take pictures of eachother's $700 shoes during circle jerks, live exclusively in rental studios in NYC, and only work as analysts in 2nd tier investment banks, $100-125K is actually the range for top end professional salaries in the United States. Someone making 75K in their early twenties is doing REALLY well and will be making 100-125K (or more!) by 30. They can afford a 3 series.

I'm willing to challenge this statement. Part of the issue is that the OP is in Boston, which is not an inexpensive place to live. If he were making $75,000 in Omaha, he could easily afford the 3 series.

But, on $75,000, he's looking at take-home pay of ~$4,250 a month. If he really wants to scrimp / live with roommates in a ****** neighborhood / etc., he can probably pay as little as $1,250 for fixed-cost living expenses (rent + utilities). He's going to contribue $500 a month to his 401(k) to maximize his employer match (though he will still be way short of 'maximizing' his 401(k) limits). Day-to-day living expenses are probably $1,000 a month, minimum. So he's left with $1,500/month of 'disposable' income.

What's the 335i going to cost? $500 a month in lease payment. $300 a month in parking. $200 a month in insurance. $100 a month in gasoline (that's 1.5 fill-ups these days).

So that leaves him $400 a month in other disposable income, with which he needs to buy other capital items (electronics, clothing, furniture, etc.) and save money to build an emergency cushion. The bottom line is that, sure, he could probably sacrifice a lot to lease a new BMW. Whether that's worth it or not is up to him.

oh, and if any part of the $75K is a one-time bonus, taxes are much higher for that payment. Taxes on my bonus last year were over 60%.

Originally Posted by gomestar

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oh, and if any part of the $75K is a one-time bonus, withholdings might be much higher for that payment. Withholdings on my bonus last year were over 60%.

Taxes != withholdings. At the end of the year you square up with Uncle Sam.

Originally Posted by gomestar

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oh, and if any part of the $75K is a one-time bonus, taxes are much higher for that payment. Taxes on my bonus last year were over 60%.

Why? Do you mean your withholding was 60% on your bonus or your actual marginal tax rate? Not sure why either would be the case. I have learned it is best to adjust withholding before and after a bonus.

Originally Posted by gomestar

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Taxes on my bonus last year were over 60%.
Then your accounting department F*d something up. The most that you could pay in income/withholding tax on a bonus (in NYC) would be 35% Federal, 7.7% State, 3.9% City, 1.45% Medicare = 48.05%. But it does always suck to actually get the direct deposit; "If you told me my bonus was $100K, why is my bank balance only 60K higher?"...

Originally Posted by username79

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Why? Do you mean your withholding was 60% on your bonus or your actual marginal tax rate? Not sure why either would be the case. I have learned it is best to adjust withholding before and after a bonus.

Bonuses are usually withheld at your marginal tax rate, because your normal wages are calculated based on assumptions about your annual taxable income. Anything over your expected AGI (i.e. a bonus) thus has to be calc'd based on marginal rates, which are obviously much higher than the effective tax rate on your normal wages.

My wife and I have purchased over 50 new cars in the last forty years of marriage. Looking back I can tell you that most of it was a waste of money, especially the Porsches and Mercedes. Although we easily afforded these toys, they were still a waste of money, especially when you look backwards and realize you have nothing to show for them.

My suggestion would be to purchase a slightly used Honda Civic. Get through the next few years, save as much as you can, and re-evaluate your priorities a that time.

Good Luck!!

Originally Posted by tj100

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Then your accounting department F*d something up. The most that you could pay in income/withholding tax on a bonus (in NYC) would be 35% Federal, 7.7% State, 3.9% City, 1.45% Medicare = 48.05%.
****, it was like 48%, I looked at YTD which included an extra paycheck in the total withholdings

Originally Posted by tj100

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Bonuses are usually withheld at your marginal tax rate, because your normal wages are calculated based on assumptions about your annual taxable income. Anything over your expected AGI (i.e. a bonus) thus has to be calc'd based on marginal rates, which are obviously much higher than the effective tax rate on your normal wages.
correct, which I think the OP should take into consideration when looking at earnings potential.