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Good read and btw Canada just set new a record with 150% debt to income ratio. In other words, for every $1000 a person has, they owe $1500.
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I have a 25 minute commute to and from work each day. During my commute, one of the thoughts that always crosses my mind is:

Can these people really afford all of these luxury cars I see on the road?

The more I think about it, the more I think that a lot of these people are probably trying to keep up with the Joneses and are in debt up to their eyeballs! Now, I am sure there are some people that drive around in these luxury cars that really can afford them because of a high salary. But lets face it, too many buy to show off for the bling factor to others. I just see way too many on the road to think that everybody can afford them. Lets just use a hypothetical example.

Ex: Purchase Price of Car: $45,000
Loan Term: 60 months
Interest Rate: 4%
Down Payment: $4,500

In this example, the payment would be $745/month. In addition, insurance costs will be significant for a luxury car. A $745 car payment on top of a mortgage, utilities, and everyday living expenses seems crazy. I would be really interested to know what the repossession rate is on luxury cars.* I tried to do some research and dig up that number, but I wasnt able to come up with anything. If anyone does happen to find that statistic, I would be really interested to know.

I would say that about 75% of people who own luxury cars shouldnt have them. I worked with two guys who owned an Audi and an Infinity. They both had payments around $750 a month. The worst part was they were 5 and 6 year loans. It always makes me cringe when I drive by the projects and see $60,000 BMWs and Audis parked in the lots. I don%u2019t know why people would spend so much of their money on something that decreases in value each year.

Now, I will admit I made a stupid decision when I finished college. I bought a brand new $23k car right out of college. To make things worse, I financed the entire $23k over 36 months. That resulted in payments of about $650/month and hurt my balance sheet for a long time. I still regret my decision to do this because it definitely set me back. However, I was living with my parents and had no other expenses, so the $650 was a lot more manageable for me. Regardless, I made a stupid decision. The more I think about it, the more I think I just wanted to have the best car of my group of friends. I wish I could go back 4 years and smack 22 year old Dave right in the face for acting so stupid.

I guess it worked out for me that I learned my lesson while I was still young and didnt have any other real obligations at the time. Unfortunately, there are a lot of people that arent so fortunate and make the mistake later in life that leads to repossession of cars, foreclose, and even bankruptcy.

I keep telling my wife that if all these people can afford these $45000 cars why not us. She keeps telling me that it doesn%u2019t make sense to pay that much and that most of them are probably living on credit%u2026 And i love her for keeping me from doing that mistake. No need to tell you who%u2019s handling the finances.

Does anybody else ever think about this when they see luxury cars all over the place?

 
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Didn't read a single word of that, but no. A lot of the people you see driving luxury cars these days are living well above their means and can not afford them. A good quote to live by is "Live like no one else, so later on you can live like no one else."

But that's not to say there aren't people that can afford them, because there's just as many people who have earned it and can.

 
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nah around here its mostly camrys with chrome 20s.

 
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I've always wondered the same thing.

More so: why does everyone opt for a $40,000 car or SUV when the can have a $40,000 sports car? I don't care what age you are, practicality is for ninnies.

 
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This. I never understood luxury cars over fun-to-drive ones.

 
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I think most of the luxury cars I see, people don't buy them brand new. You can get a newer BMW or Mercedes that has miles on it cheaper then older Hondas with more miles. They don't hold there value well and most people buying them are just doing it for the name not the actual driving experience. People also stretch themselves to thin, and unfortantly once you buy it, it will depreciate faster then you can put the miles on. So when you go to sell it 2-3 years later you are in hole. More cost affective to just keep it and learn a good lesson...opting for a luxury car doesn't mean it isn't fun to drive. That's why there is Acura, infinity, BMW, Lexus etc, that all offer sportier more fun to drive cars. You can't have stiff suspension and soft suspension in your civic with the press of a button but you can in an Audi or Mercedes.

 
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i think its a status thing kinda like why people run out to buy the new iphone when there old iphone is perfectly fine.and you can have stiff or soft suspension with the push of a button in a civic.

 
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You can? I bet its mega expensive to put in a 7th gen.

And people buy luxury definitely to show off in the drive thru or at red lights. My aunt bought an Audi and a Lexus to show them off and says she feels superior to others like me in Civics and Corollas. yes thats what she said. My sister drives a 75K Mercedez SUV to show it off.

Most Infiniti drivers I seen in their G37s, they act like hot shots thinking theyre driving a Ferrari. Same goes for Gen Coupe and Accord owners.

 
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wow.. gotta love people like your aunt.. (just saying) some people can afford to buy nice cars, but most don't have a clue how to really drive them or do anything other than take it to a shop. surprised you drive a civic when your sister drives a 75k mercedes suv lol. is she single?!

ya big hot shots in their luxury cars; but don't get it twisted, they are NOT supercars. same goes for gen coupe and accord owners? ya a lot of honda drivers (especially kids) think they're badazzs in their hondas, i know i did when i was 16 lmao.

all this coming from a guy who currently owns a cadillac, his second one

it's old, a 91, but still pristine. once you drive a luxury car, you realize what you've been missing.. can i afford it? hopefully.. afford it as a daily driver? hell no, average 15 mpg is no joke.. but for the price i paid, how nice the car is, and the history i have (when i was 16 had the exact same eldorado just white, sold it, missed it ever since and recently bought a polo green one) it's feasible. my method is 1. buy old cars 2. own a good 4 cylinder for a daily driver 3. when the price and car is right, buy the luxury, you will be happy

 
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My uncle has a family of four, lives in a ghetto 2 bedroom apartment, only my aunt works, and he bought himself a 5 series clearly just to show off. He "borrows" money from my granny. So yeah, I believe there are a lot of people out there who can't afford luxury cars but go for it just for superficial means.

I wish credit was awarded to those who earn it. Not for people who don't know how to spend their money. It would fix our economy.

Anyways, I love my Civic. Great gas mileage, fun to drive, practical, reliable, no car payments, and I plan on keeping it for years more, assuming I don't get in an accident or something.

 
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nah not that expensive probably around $1,700 dollars for the tien type flex coilover with the EDFC system that controls the dampening force from inside the car.

 
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Barely!!! Lol.. I just couldn't afford my INFINITI as my daily driver. I know it's not top of line luxury but I love my INFINITI. It's pretty much all I wanted and I am happy with it. RWD, decent power 306hp, and all the stuff a luxury car has.

Thats the reason I got a daily driver. 1994 hatchback DX, and I love the mpg. And I like the car a lot. Now I am spending money on this one, but nothing compare to spending money on the INFINITI.

 
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I think you should have read into the post a little more. He is from Canada, if you've been there you will understand that a yes is most likely the case in Canada. A LOT of rich foreign investors/families living in Canada. In the US not so much. (I live in the US by the way)

Check out this article and look at the age of the drivers they impounded, as well as the cars. You will NEVER see anything like that in the US EVER. A lot more rich foreigners due to Canada's lax immigration laws.

http://www.autoblog.com/2011/09/02/v...street-racing/

 
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not to take issue or get too off topic here but....

Vancouver is a very small unique part of Canada and by no means reflects the rest of the country in terms of wealth/wealthy. I find it hard to believe there is nowhere in the US where there's a group of rich kids with high end sports cars.

back on topic... who cares, what other people do with their money/credit is their business.

 
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I suppose it only makes our dream cars more desirable then. I would be upset if everyone in their forties was driving a Lambo.
Rarity FTW

 
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Lambo's aren't really drivers cars. They are more like art you park in your driveway. The new Aventador retails for $380 000. So yeah, something for only the super wealthy because no bank anywhere in the world is going to lend you that kind of money to buy a car.

besides if I had $380K to spend on a car I would have....

- Toyota 4x4(done to the nuts) $75 000
- 2 Harley Davidsons (1 touring 1 bar hopper) $75,000
- 1956 Corvette $75,000
- Mazda RX8 $30 000
- Original Austin Mini $10 000
- '69 Chevy Nova II $40 000
- Subaru WRX STI $40 000

.... and I would still have $35k left over for maintenance, insurance, gas, etc

LOL

EDIT: I just envisioned all that stuff sitting in my driveway.

 
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That was just an example. I'm not really into exotics.

If I had loads of money, the most expensive car I'd own would only be around 70,000 max.

I'd have a handful of daily drivers, a utility vehicle of some sort, and a toy like an Lotus or Aston Martin for showing off.

 
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the real question is, why do we care. but i have noticed the more expensive your car is, the more there is something wrong with you or your life. the most down to earth and genuinely nice people ive met drive beat up old cars, because they have nothing to hide or compensate for. the hottest girls drive the most trashy cars. if i had unlimited money, i dont think i would buy an expensive car. there is no point when a cheap car does the same thing.

 
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you wanna see nothing but rich ashole kids driving around expensive cars come to greenwich connecticut.

 
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If were a billionaire, I'd drive ... a Honda Civic! I really do like 'em. Lambos etc are bad for the environment.

 
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...but you probably would.

 
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what was that top gear episode were jeremy drove a super car through los angles and the exhaust coming out of the car was actually cleaner then the LA air.

 
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The only car Jeremy has ever driven in LA was a Corvette ZR1. He drove the Mercedes SLS in the Eastern US Special and an IROC in the original US special from Florida to New Orleans.

 
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ok. sorry in advance.. but stfu.. and again, stfu. "if i had unlimited money i dont think i would buy an expensive car" lmaaaao... ya ok hahaha. like you wouldn't buy a bad *** aston maritin, ferrari, lambo, or something wicked? ya ok.. hahhaa. if you were a billionaire you might drive a civic SOMETIMES, but guaranteed you'd own some wicked car or multiples of too.

 
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you'd be surprised how many people own their company or have really high paying jobs. i've mentioned this in another thread, but my buddy has a BMW and doesn't make too much money, BUT it's paid off in cash. How? He spent a couple years over seas for the government with no bills. Bought it online, sight unseen, brand new. He told me recently that he's still pissed he did it. So I wouldn't necessarily say all or most people that have luxury cars can't afford them, but they're most definitely bought to show off to other people.

if i were loaded, i mean serious money, i would DEFINITELY have an unbelievable car. probably a few of them. if cost is irrelevant (gas, maintenance, etc) then why not be as comfortable as possible?

i read once that i should have the cheapest car i could put up with, and the nicest house i could afford. i think that's good advice for the middle class...

 
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I concur. Vancouver is quite the bubble. However even in the richest parts of the US you will still NEVER see anything like this. Not in NY, not in LA, not in Miami. I've lived in NY, LA, and now reside in Seattle (where there are over 68,000 millionaires in the greater Seattle area alone. Fact. look it up). I think it has to do with culture clashing. Also if a stunt like this were pulled in the US all those involved would have been arrested for sure. From my experience i find that Vancouver/BC police to be a lot more lax. The gang problem is much more prominent there, in terms of organized crime. Any who, off topic again.

To sum it up. Haters gonna hate. Don't like your status? Work hard and appreciate what you have.

 
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When im driving, all I see around me are Lexus, BMW, Benz, Audi, Infiniti, even more Cadillacs and Buicks. All new with PERFECT showroom paint jobs, not a single scratch or imperfection on it. Makes me feel like crap in my old Civic.

Cause how I see it is, people compare what you drive. They will view a 31 year old who drives a 3year old car vs a 31yr old who drives an outdated one, no doubt about it.

I mean if I was driving my dream car, theres no question it would turn heads and people would see me in a differently light.

 
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Living where you do I'm surprised it's not all giant SUVs and pickup trucks being driven by rednecks with gun racks in the back window.

I kept my last vehicle for 15 years ('88 Toyota pickup 4x4). When I finally retired it 2 years ago (bought the Civic). It was a compilation of 2 Toyota bodies with a Mazda box on the back and three different colours. I would still be driving it right now if the cost to fix it didn't far exceed it's value.

I'll probably drive my Civic 'til it's dying day as well.


I've finally realized that cars are money pits and the less money you put in, the further ahead in life you are.

That's why cars are status symbols. They show people how much money you have to throw away. Thank god Honda never built a diesel Civic because you would be labeled, 'the cheapest person on earth' if you were seen driving it.

 
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Uh oh you're breaking out the FRS pictures again...everything that can be said has been said to you over the various threads you've made...Im not sure what other advice to give

 
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Right now interest rates are next to nothing.

Also most people dont buy they lease.

I bet most of the people who do own the older benz and bmw cry like bitches when they get the repair bill and realize they really shouldnt be driving what they do. Most of these people dont even have a home, possibly living on gov money.

Also in addition to interest being next to nothing, most people buying luxury cars are probably buying them outright-meaning they are not financing them, they pay cash. And the ones who do finance, probably drop a nice chunk of change for it before they finance.

I say its best to live comfortable. Buy what you like and what you can reasonably afford.

Lately I have been tossing the idea around of trading up my S2000 for a Boxster S.
They are roughly the same price, but searching around and seeing the parts markup and problems the boxster has I think I wont do it.
I probably could afford it, however I like to have a nice cushin of cash and not live too close to the line.