Gruu

Hello,

I currently own a 2005 ES330 which I received as a a college graduation gift five years ago. I am very fond of the car (and Lexuses in general ) and have kept it in good condition.

My ultimate goal is to eventually earn an LS, and I'd be very grateful if some of you would be willing to share your experiences regarding the best way to get there. (By "best", I don't necessarily mean "quickest", though that is of course a factor. I mean "most prudent", which can mean trading off time for a better experience.)

For example, is it better to gradually trade up every 6-7 years or keep one car for much longer (10-12 years?) and then take the plunge all at once? Similarly, is it better to save up enough to buy a new LS, buy a 2- or 3-year-old used LS, or lease an LS? From what I have read about leasing, I don't think that it's for me, but I am willing to listen to what people have to say either way. If you have any other insights to share, I'd be glad to hear them.

From a financial perspective, I can currently only save about $5000 per year towards the purchase of a new car and have been doing so for the last three years. So, I know that my goal is several years away, but that's okay because I'm a month from turning 28.

Thanks in advance for your time!

JFNash

From my experience I can tell you that you will save about 25-30% if you make the first owner take the biggest hit!

My loaded pre-owned '08 LS460 cost me about $55K while the first owner had paid $74K+ 10 months before I bought it from him!

Gruu

Thanks!

Is ES -> GS -> LS a good upgrade path, or is the GS too different from the other two to really count as a middle tier?

Nospinzone

Gruu, I could write a book on this, and most of what I would have to say you would not want to hear. Of course I have only the barest details about your finances, but if you can save $5000 a year, you definitely shouldn't be spending it on a new car. A new car is undoubtedly the fastest depreciating asset in the world. If you put that $5000 into virtually any bona fide investment, it will return you so much more in the coming decades.

That 2005 ES isn't even broken in yet. Although I have a 2007 LS460, I still have my 1995 Infiniti Q45a that I drive regularly. I only bought the LS because I was 59 and I've earned my money and can afford to get what I want. I'm not even spending my kids inheritance because we have no kids. We have a neice, but she has absolutely no concept of money so I'm not giving up anything so she can blow it once I'm dead, LOL!

My strongest advice to you is to keep that ES for at least another 5 to 10 years. As I said, I know you don't want to hear that, but from a financial standpoint you will thank me some day.

PS- No tip necessary!

bruceko

Income is the upgrade path.

rominl

iTrader: (4)

pretty much hit all the points already. car is such a big depreciating asset, i pretty much call it a hobby. if you are only saving 5k a year after all your current expenses, imho it's not time for a real luxury car yet. say you lease a new one or finance a old one, payment on ls460 (assume you don't wait to have enough money) can easily be 1000 a month. that's 12k a year. when you advance in your career so that after putting aside 12k a year on car payment and you still have decent saving (imho need to be more than 5k a yr), then maybe you are ready

well just my 2 cents

Gruu

Thank you for your replies, Nospinzone and rominl.

Nospinzone, I appear to have given you the wrong impression. To clarify, the $5K/yr figure is what I earmark exclusively for a car, after all expenses and the substantial amount that I save and invest for retirement and other purposes. As I said earlier, I recognize that I am several years away from earning an LS. I have no intention of foolishly compromising my future financial security over a car.

All of you have said that it is a waste of money to purchase an LS (or any car) new. I think that that is sage advice, given how quickly new cars depreciate over the first two years.

rominl, if I understand you correctly, it sounds like the threshold for comfortably affording an LS is having access to at least $12K of disposable income per year just for the car, after all other considerations. That's a very useful metric, thank you.

daryll40

I was driving a Plymouth Volare station wagon when I was about at your stage of life. It wasn't pretty!

CEOEngr

LOL. Lucky you, atleast you had an ugly vehicle. I was a poor post graduate student at a Boston area university pushing a rusty old ten speed with slightly bent front rims.

Johnny

At 28, I was on my second Econoline van, both purchased new; my significant other had a Ford Mustang. As a mechanical gear designer, I avoided smoking, drinking and swearing, all expensive habits especially the latter.

Theoretically, I could have afforded a Lexus at the time, but Japanese cars were still a novelty then, the Big 3 ruled the showrooms, and the public's attention to boot. So I saved and invested in Real Estate, a very wise place to put money in at the time, especially in Vancouver (it's never the wrong time to make money in RE, btw). So it is somewhat difficult to compare today's world to one 40 years back, but there is a timeless and assured method to succeed in life, even starting from scratch as I did: Forge good and long term relationships, work hard and save even harder...

daryll40

Good advice Burnaby. I did similarly, although I started 30 years ago, not 40.

Oh and "significant others" ARE an expensive habit!

G2Lexus

Oh and "significant others" ARE an expensive habit!

AMEN! Luxury cars are a drop in the bucket compared to wives!

My opinion, if you have to finance a luxury car or any other luxury item (boat, RV, vacation home, jewelry, etc) then you can't afford it. Toyota, Nissan and Honda make great cars for a quarter the cost of the LS and you don't have to sweat a large car payment each month.

Don't get me wrong, I consider myself a car guy and love the LS but my CPA reminds me constantly of the financial pitfalls of high-line luxury cars.

Gruu

Thanks for your comments, Burnaby et al. Sounds like I'm on track and following your advice ... I save so much compared to my co-workers that sometimes it seems like I save too much. In 10-20 years, though, I'll probably be way ahead of them.

G2Lexus, I agree that financing a luxury car means that you can't truly afford it. I'll stick with my ES330 for several more years until I've saved enough to just walk in and buy its eventual replacement.

usermel

You got some great advice from people who have been were your going sir. Take heed to it and use it to your advantage, it's all priceless advice you got Gruu! Me myself I still drive a 2001 LS430 and have 102,000 miles on it. I can afford a new/used LS460 but, I won't do it. WHY? The economy having issues taught me something. It taught me that LIFE isnt about what I can attain physically. Lifes about who we are inside and to grateful with what we do have and not what I don't. And the best gift is LIFE itself. Funny how money matters change our focus!

Now I ask WHY I want what I want, and not can I afford it. That said, it's your choice to decide if you want the LS460, just ask yourself WHY you want it. After a while you get used to any car you buy anyway they become an after thought no matter how expensive. I owned S-class Benzes and all the Lexus' in the line up and a car drives from place to place, nothing more. Be patient and buy because you need, and not because you want(Wisdom) sir. You have a 2005 ES and thats a great car and the most reliable Lexus and best in sales. Drive it until you can cash out on a used car in 5-7 years buddy. It's worth the wait! L.G.N.M!!!

amdave

wait until you can buy it cash. i will never buy a car any other way. if i have less money in the future, i will buy less car.

try to keep your cars for 10+ yrs, otherwise, you are probably not getting your money worth if you buy it new with the tremendous first and second yr. depreciation.

the US economy may never recover to the way it was, because the way it was was not reality, but just based on easy credit. i think those days are gone, and it is time to start buying stuff only if you can afford it.

of course, i admire that your have drive to move up in the world of cars - good luck.