Can I afford a M235i?

Simbachinna · 12-01-2014, 05:49 PM

Hi,

I'll be graduating from college with an Engineering Degree, and 70k starting in Houston. I was wondering if you guys think I can afford a M235i (M3 is my dream car). I will have $0 debt.

Built a M235 how I want it and the lease with 36 months, 12k miles w/ 2800 down is $576. With tax and everything, I'm assuming $615/month.

This is a rough calculation, 70k after tax is like $59k, or $4,900/month.

Rent: $939
Utilities (Gas, Internet, Cell Phone, Electricity): $450
Food: $450
Car (lease payment with gas, insurance for 22yr old): $1000
Clothes: $150
Health Insurance: $550
Entertainment/Gadgets: $300
Saving: $1000

Total: $4839/month

Was wondering if you guys in the real world think this is an accurate estimation for a 22yr old.

gtaccord · 12-01-2014, 08:20 PM

So taxes (fed + state) + social security and Medicare is more than 11k per year. It will be closer to 25% all together so take home pay will be ~$52k. Also don't forget 401k and other company benefits.

That being said I would wait at least a year so you can determine your actual cash flow. Real life never works quite as well as a spreadsheet. $600/MO is a big chunk of change.

ShocknAwe · 12-01-2014, 08:36 PM

No you really can't. I'd wait a year and try to get one used. Plus IMO paying down on a leased (rented) car is a horrible financial decision at your stage.

Simbachinna · 12-01-2014, 08:55 PM

Thanks guys.

I redid my tax estimates, and my monthly should be 4,485. I plan on saving 1,500/month (includes 401k on my part), rent will be 1,000. Utilities 500, health insurance 300. That leaves me with ~1485/month. What would you reccomend spend monthly on cars if they're a car enthusiast? I was thinking 500month payment + 120 gas +120 insurance leaves me with $700 after everything, but I don't think this is smart. This will be my first time living (other then college) in the us.

Thanks

gtaccord · 12-01-2014, 09:39 PM

I have been out of college for 10 years and have never had a car payment over $400. I have also owned a prelude, sti and two 335s during this period. In all cases, keeping my payment low allowed me to mod the cars, take up other hobbies like mountain biking, pay for a wedding and still save money. I would recommend saving up enough so you can put 20% down on a used car that meets your needs and wants.

Gate7 · 12-01-2014, 10:03 PM

Why is your health insurance so much? Are you paying by yourself out of pocket?

Also what is the point of having a nice car if your monthly gas allowance is $120, it should be at least twice that... And yes as others have mentioned, lease is a horrible idea for someone in your situation. Oh and being out of school, living in Houston and owning m235i I can guarantee you insurance will be more than $120 a moth.

Living in the loop in Houston is very expensive, when I lived there I probably couldn't afford my 335i before I moved out to suburb ... And got a better job

3002 tii · 12-01-2014, 10:29 PM

Unless you count the $1000 savings towards retirement, you need to fund your 401k first before any lux car.

IEDEI · 12-01-2014, 11:22 PM

get a used 135. way more direct and entertaining than the bloated 235 and waaaaay cheaper.

Kiwi · 12-01-2014, 11:52 PM

Get a house first and pay cash for your cars. Their is a lot of really great second hand BMW's out their.

Paying rent and car payments is dead money. If you save and buy a house you can rent out the spare bedrooms and you'll enjoy having the freedom later on to buy what you like.

onatuesday · 12-02-2014, 02:16 AM

Do you get a year end bonus? You'll need to work for a while and build some credit before BMWFS will lease this car to you. First auto loan is the hardest to get.

If you haven't graduated yet...I'm a bit surprised $70k is starting for an engineer...is this a petroleum company? No offense but it seems a bit in the lower end. Maybe it's because cost of living and no state income tax in Houston is so favorable. Or maybe my expectations are out of whack.

I'd say the paltry amount you can save now pales in comparison to how much money you can save when you're making substantially more. You're young and I'm assuming you're in good health. Live it up now while you can because there's no guarantee about tomorrow. People wait their whole lives for this idea that they can be happy one day. Why not be happy now. Granted 9 out if 10 ppl will tell you that's bad advice but the ones who decide to think out of the norm are the ones who either become mega rich or bankrupt and either way they'll have more fun doing so

Nkc · 12-02-2014, 03:14 AM

I like what the guy above said.

John_01 · 12-02-2014, 03:39 AM

A used 128i or 135i could be option if you must have a BMW.
128i is probably cheaper to maintain, so I would look at that.

If you're slightly creative, I think you can find lots of fun ways to spend the money you save. Eg: travel and socialising.

gxman · 12-02-2014, 07:03 AM

I was curious and built a M235i. Can probably get one for 45K before TTL.

Any new nice car you get now will cost close to 30K. 15K difference is hardly much, with perhaps $200/month difference in the lease note. That shouldn't make or break a guy that makes 70K(before taxes). Going out on a couple of dinner dates with a chic could easily cost that.

With that said, I would rather plan to purchase rather than lease.

BimmerRookie · 12-02-2014, 07:57 AM

I think you should wait on it and actually start living down here. You'll find out that even though you budgeted for some things, other things are going to cut in.

I moved down here 6 months ago also with an engineering position (Petroleum engineering) and I do make more than you do (not trying to be a dick, only trying to prove a point), but still I find myself always having to re-adjust my budget, because i went over on some things i shouldnt have. So making payments on my M3, paying rent, utilities, groceries, gas, insurance, taxes, restaurants + bars really does cost alot down here.

Be carefull, because your budget sounds a bit tight.

PM me if you wanna talk about it, we're sorta in the same boat!

Billup · 12-02-2014, 08:23 AM

I took on an engineering job about 700 miles from my hometown. When I first moved here I was looking at an E90 M3, but I hadn't really established what my take home was actually going to be after taxes, as well as all my living expenses. I ended up selling my Rsx-S and buying the 128i. It's a great all around car and has been very reliable, although maintenance has still been costly.

In all honesty, I probably could have gotten an E90, but I enjoy doing a bunch of other activities that cost a bit of money, like going out to nice dinners, buying clothes, going out and buying a round of drinks for all my friends at the bar on the weekend. Things like that can tally up, and next thing you know, you are living paycheck to paycheck because you wanted a brand new car. It might be gratifying at first, but I feel way better about myself that I can max out my 401k as well as still put away money in my personal account week after week.

Now that I've actually been here about 2 years and am comfortable with where I'm at, I'm now finally looking at a Cayman to purchase next year since I have everything in order, and I'm still young to enjoy it.

Best of luck!

KingOfJericho · 12-02-2014, 08:23 AM

Quote:

Originally Posted by trinim3

You'll need to work for a while and build some credit before BMWFS will lease this car to you. First auto loan is the hardest to get.

Most car companies, including BMW, have recent college graduate programs that allow any student with a diploma to lease or finance a new or used car at the best available rates, often with additional cash incentives.

http://www.bmwusa.com/Standard/Conte...teProgram.aspx

fcman · 12-02-2014, 08:57 AM

I make $72k 2 years out of college but have to pay income tax. My 135 is $551/month + $100/month insurance, and I financed for 4 years. Rent and health insurance are a little cheaper, so I have a similar car budget.

I think the payment is doable, but making that kind of payment on a lease with your income is ridiculous, especially if you are renting. Buy a GTI (or better yet a real cheap Fiesta ST), save for some inexpensive real estate (or expensive depending on your circumstances when you're ready to buy) and then you can get yourself a new BMW.

onatuesday · 12-02-2014, 09:00 AM

Quote:

Originally Posted by KingOfJericho

Most car companies, including BMW, have recent college graduate programs that allow any student with a diploma to lease or finance a new or used car at the best available rates, often with additional cash incentives.

http://www.bmwusa.com/Standard/Conte...teProgram.aspx

Even $50k cars? I think they'll ask for a substantial down payment even for a lease. Probably $10k or more

upstatedoc · 12-02-2014, 09:02 AM

I thought engineering students were smart..

Fahrvergnügen · 12-02-2014, 09:13 AM

Quote:

Originally Posted by Kiwi

Get a house first and pay cash for your cars. Their is a lot of really great second hand BMW's out their.

Paying rent and car payments is dead money. If you save and buy a house you can rent out the spare bedrooms and you'll enjoy having the freedom later on to buy what you like.

What an ignorant comment. The OP obviously doesn't want to wait 10+ years to drive a car (car companies have financing and leasing programs for this very reason).

To the OP: you will get a wide variety of advice on personal financial management on this, or any, forum. In my experience, I graduated undergrad with a business degree and didn't make enough money right out of the gate to live in Chicago comfortably AND make car payments (and parking spot payments). I waited until I made about ~$70k and leased a G25 (~$350/mo). It was a great little sedan and my first new car, but it got pretty boring. After about 1 year on the lease I swapped it on SwapaLease, got a promotion and got a 2012 Z4 on SwapaLease with 25 months left (~$550/mo). I absolutely loved that car and had so many great times in it, thus I ran the lease out and just recently returned it to BMW. Now that I want a new car and make more money than I did 2 years ago, I am financing a new M4 (~$1,100/mo). Throughout this process I bought a condo and paid of student loans as well as started savings a good amount of $$.

I wanted to share my experience just so you have a point of reference. However, everyone's experience will be different.

IMO, wait at least 3 months and track your spending vs. budget. When I started to track my spending, I noticed some areas I was spending more than budgeted and some that I was spending less (somewhat obvious, but alcohol at dinner/bar/home can cost $400+/mo if you are not careful). If you are pretty close to your budget and still feel comfortable / excited about the M235i then do it. You will be working hard and to have something nice that gives you enjoyment is necessary to motivate you in some situations.

fcman · 12-02-2014, 09:18 AM

Quote:

Originally Posted by ChicagoM4

IMO, wait at least 3 months and track your spending vs. budget. When I started to track my spending, I noticed some areas I was spending more than budgeted and some that I was spending less (somewhat obvious, but alcohol at dinner/bar/home can cost $400+/mo if you are not careful). If you are pretty close to your budget and still feel comfortable / excited about the M235i then do it. You will be working hard and to have something nice that gives you enjoyment is necessary to motivate you in some situations.

This is good advice. Right out of school my friends and I used to go blow all our money at the bars every weekend, which I would highly recommend btw, way more fun than being broke in college. Last year I bought my car and stopped going out all the time and I've found an extra $500/month in my pocket, even after the $551/month car (my last car was paid off).

onatuesday · 12-02-2014, 09:26 AM

To the person who said pay all cash for cars...with interest rates as low as they are that's actually not necessarily the best financial decision. Why? Because you can invest your money at a higher rate than you'd borrow at if you financed. Make your cash work for you.

To the person that said wait 3 months, I also agree. And I think a loan company will want to see a few paychecks in any case.

12-01-2014, 05:49 PM	#1
Simbachinna Private 27 Rep 70 Posts Drives: It's Cool Join Date: Aug 2011 Location: USA iTrader: (0)	Can I afford a M235i? Hi, I'll be graduating from college with an Engineering Degree, and 70k starting in Houston. I was wondering if you guys think I can afford a M235i (M3 is my dream car). I will have $0 debt. Built a M235 how I want it and the lease with 36 months, 12k miles w/ 2800 down is $576. With tax and everything, I'm assuming $615/month. This is a rough calculation, 70k after tax is like $59k, or $4,900/month. Rent: $939 Utilities (Gas, Internet, Cell Phone, Electricity): $450 Food: $450 Car (lease payment with gas, insurance for 22yr old): $1000 Clothes: $150 Health Insurance: $550 Entertainment/Gadgets: $300 Saving: $1000 Total: $4839/month Was wondering if you guys in the real world think this is an accurate estimation for a 22yr old.
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12-01-2014, 08:20 PM	#2
gtaccord Major 56 Rep 1,464 Posts Drives: 2009 BMW 335xi Join Date: Feb 2012 Location: Maryland iTrader: (7) Garage List 2009 BMW 335i xdrive [0.00]	So taxes (fed + state) + social security and Medicare is more than 11k per year. It will be closer to 25% all together so take home pay will be ~$52k. Also don't forget 401k and other company benefits. That being said I would wait at least a year so you can determine your actual cash flow. Real life never works quite as well as a spreadsheet. $600/MO is a big chunk of change.
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12-01-2014, 08:36 PM	#3
ShocknAwe 1Addict 3233 Rep 7,894 Posts Drives: E82 Mutt, M57 Truck Join Date: Jul 2012 Location: Charleston iTrader: (22)	No you really can't. I'd wait a year and try to get one used. Plus IMO paying down on a leased (rented) car is a horrible financial decision at your stage. __________________ 2010 135i 6MT Jet Black N54/3 FE82 Mutt \| BUILD THREAD \| GARAGE SALE
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12-01-2014, 08:55 PM	#4
Simbachinna Private 27 Rep 70 Posts Drives: It's Cool Join Date: Aug 2011 Location: USA iTrader: (0)	Thanks guys. I redid my tax estimates, and my monthly should be 4,485. I plan on saving 1,500/month (includes 401k on my part), rent will be 1,000. Utilities 500, health insurance 300. That leaves me with ~1485/month. What would you reccomend spend monthly on cars if they're a car enthusiast? I was thinking 500month payment + 120 gas +120 insurance leaves me with $700 after everything, but I don't think this is smart. This will be my first time living (other then college) in the us. Thanks
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12-01-2014, 09:39 PM	#5
gtaccord Major 56 Rep 1,464 Posts Drives: 2009 BMW 335xi Join Date: Feb 2012 Location: Maryland iTrader: (7) Garage List 2009 BMW 335i xdrive [0.00]	I have been out of college for 10 years and have never had a car payment over $400. I have also owned a prelude, sti and two 335s during this period. In all cases, keeping my payment low allowed me to mod the cars, take up other hobbies like mountain biking, pay for a wedding and still save money. I would recommend saving up enough so you can put 20% down on a used car that meets your needs and wants.
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12-01-2014, 10:03 PM	#6
Gate7 Oh rly? 46 Rep 339 Posts Drives: 335i Join Date: Dec 2013 Location: TX iTrader: (0)	Why is your health insurance so much? Are you paying by yourself out of pocket? Also what is the point of having a nice car if your monthly gas allowance is $120, it should be at least twice that... And yes as others have mentioned, lease is a horrible idea for someone in your situation. Oh and being out of school, living in Houston and owning m235i I can guarantee you insurance will be more than $120 a moth. Living in the loop in Houston is very expensive, when I lived there I probably couldn't afford my 335i before I moved out to suburb ... And got a better job
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12-01-2014, 10:29 PM	#7
3002 tii Lieutenant General 2282 Rep 12,565 Posts Drives: Z4 M, X5, GX460 Join Date: Apr 2008 Location: CT iTrader: (99) Garage List F15 X5 xDrive35i [8.75] E86 Z4 M [10.00] F10 550i (Retired) [9.17] F25 X3 xDrive35i (R ... [9.43] E82 135is (Retired) [9.50] E85 Z4 M (Retired) [9.41] E90 328i xDrive (Re ... [9.25] E86 Z4 3.0si (Retired) [9.22]	Unless you count the $1000 savings towards retirement, you need to fund your 401k first before any lux car. __________________ Follow for latest mods
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12-01-2014, 11:22 PM	#8
IEDEI Banned 1130 Rep 4,686 Posts Drives: L'Orange Join Date: Jul 2013 Location: Brooklyn, NYC iTrader: (0) Garage List 2011 BMW 1M [8.40]	get a used 135. way more direct and entertaining than the bloated 235 and waaaaay cheaper.
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12-01-2014, 11:52 PM	#9
Kiwi Captain 145 Rep 917 Posts Drives: 2015 BMW M Sports Convertible Join Date: May 2005 Location: Auckland New Zealand iTrader: (0)	Get a house first and pay cash for your cars. Their is a lot of really great second hand BMW's out their. Paying rent and car payments is dead money. If you save and buy a house you can rent out the spare bedrooms and you'll enjoy having the freedom later on to buy what you like.
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12-02-2014, 02:16 AM	#10
onatuesday Captain 157 Rep 965 Posts Drives: Hyundai Join Date: Jan 2014 Location: TX iTrader: (0)	Do you get a year end bonus? You'll need to work for a while and build some credit before BMWFS will lease this car to you. First auto loan is the hardest to get. If you haven't graduated yet...I'm a bit surprised $70k is starting for an engineer...is this a petroleum company? No offense but it seems a bit in the lower end. Maybe it's because cost of living and no state income tax in Houston is so favorable. Or maybe my expectations are out of whack. I'd say the paltry amount you can save now pales in comparison to how much money you can save when you're making substantially more. You're young and I'm assuming you're in good health. Live it up now while you can because there's no guarantee about tomorrow. People wait their whole lives for this idea that they can be happy one day. Why not be happy now. Granted 9 out if 10 ppl will tell you that's bad advice but the ones who decide to think out of the norm are the ones who either become mega rich or bankrupt and either way they'll have more fun doing so Last edited by onatuesday; 12-02-2014 at 08:56 AM..
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12-02-2014, 03:14 AM	#11
Nkc NOOB 1601 Rep 1,356 Posts Drives: Cars Join Date: Oct 2011 Location: @BMWclassicdivision iTrader: (0)	I like what the guy above said. __________________ @BMWclassicdivision
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12-02-2014, 03:39 AM	#12
John_01 Colonel 232 Rep 2,643 Posts Drives: E90 325i, E82 135i Join Date: Mar 2009 Location: Sydney, Australia iTrader: (0)	A used 128i or 135i could be option if you must have a BMW. 128i is probably cheaper to maintain, so I would look at that. If you're slightly creative, I think you can find lots of fun ways to spend the money you save. Eg: travel and socialising.
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12-02-2014, 07:03 AM	#13
gxman Private First Class 22 Rep 119 Posts Drives: old mercedes Join Date: Jul 2014 Location: louisiana iTrader: (0)	I was curious and built a M235i. Can probably get one for 45K before TTL. Any new nice car you get now will cost close to 30K. 15K difference is hardly much, with perhaps $200/month difference in the lease note. That shouldn't make or break a guy that makes 70K(before taxes). Going out on a couple of dinner dates with a chic could easily cost that. With that said, I would rather plan to purchase rather than lease.
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12-02-2014, 07:57 AM	#14
BimmerRookie Major 469 Rep 1,320 Posts Drives: E93 Cavalier Z24 M3 Join Date: Jan 2014 Location: Austin, TX iTrader: (0)	I think you should wait on it and actually start living down here. You'll find out that even though you budgeted for some things, other things are going to cut in. I moved down here 6 months ago also with an engineering position (Petroleum engineering) and I do make more than you do (not trying to be a dick, only trying to prove a point), but still I find myself always having to re-adjust my budget, because i went over on some things i shouldnt have. So making payments on my M3, paying rent, utilities, groceries, gas, insurance, taxes, restaurants + bars really does cost alot down here. Be carefull, because your budget sounds a bit tight. PM me if you wanna talk about it, we're sorta in the same boat!
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12-02-2014, 08:23 AM	#15
Billup Banned 472 Rep 928 Posts Drives: Your mum crazy. Join Date: Jun 2013 Location: Baconopolos Island iTrader: (0)	I took on an engineering job about 700 miles from my hometown. When I first moved here I was looking at an E90 M3, but I hadn't really established what my take home was actually going to be after taxes, as well as all my living expenses. I ended up selling my Rsx-S and buying the 128i. It's a great all around car and has been very reliable, although maintenance has still been costly. In all honesty, I probably could have gotten an E90, but I enjoy doing a bunch of other activities that cost a bit of money, like going out to nice dinners, buying clothes, going out and buying a round of drinks for all my friends at the bar on the weekend. Things like that can tally up, and next thing you know, you are living paycheck to paycheck because you wanted a brand new car. It might be gratifying at first, but I feel way better about myself that I can max out my 401k as well as still put away money in my personal account week after week. Now that I've actually been here about 2 years and am comfortable with where I'm at, I'm now finally looking at a Cayman to purchase next year since I have everything in order, and I'm still young to enjoy it. Best of luck!
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12-02-2014, 08:57 AM	#17
fcman Captain 670 Rep 985 Posts Drives: 2023 G87 Join Date: Mar 2014 Location: Atlanta, GA iTrader: (0)	I make $72k 2 years out of college but have to pay income tax. My 135 is $551/month + $100/month insurance, and I financed for 4 years. Rent and health insurance are a little cheaper, so I have a similar car budget. I think the payment is doable, but making that kind of payment on a lease with your income is ridiculous, especially if you are renting. Buy a GTI (or better yet a real cheap Fiesta ST), save for some inexpensive real estate (or expensive depending on your circumstances when you're ready to buy) and then you can get yourself a new BMW. Last edited by fcman; 12-02-2014 at 09:04 AM..
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12-02-2014, 09:02 AM	#19
upstatedoc I'll get back to you 7560 Rep 2,132 Posts Drives: blue streak Join Date: Dec 2009 Location: not downstate iTrader: (2)	I thought engineering students were smart.. __________________ 2018 Stinger GT 2009 E90 N51 /Active Autowerke Stage 2 tune/BMW Performance Exhaust/ Countermeasure enthusiast.
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12-02-2014, 09:26 AM	#22
onatuesday Captain 157 Rep 965 Posts Drives: Hyundai Join Date: Jan 2014 Location: TX iTrader: (0)	To the person who said pay all cash for cars...with interest rates as low as they are that's actually not necessarily the best financial decision. Why? Because you can invest your money at a higher rate than you'd borrow at if you financed. Make your cash work for you. To the person that said wait 3 months, I also agree. And I think a loan company will want to see a few paychecks in any case.
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