I make around $370k with no debt and I think I’m too poor to afford $1k per month. Not sure how people in the $120-190k range salary can justify it. Granted I don’t have millions in the bank so that might change my perception.
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It all depends on your goals. If you want to retire in 10 years, maybe it is not the best decision. But if you have no debts, I can’t see any reason why you can’t justify spending 3% of your income on a car payment. It is like saying someone who is making $50,000 a year can’t justify spending $125/mo on a car payment. Edit: To expand on your last comment. There are people making $150k who live at home with their parents and have no real expenses. Also, there are people who would rather have a nicer car and not live in a nicer house/apartment. Just depends on where you priorities are financially and personally.
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Yeesh, I would hate to see your mortgage payment.
But different strokes for different folks. If I made a ton my house and mortgage would reflect that, not my cars. But for some people it’s vice versa.
pretty much, I had to laugh when @max_g said 10-18% annual return on $5k 
. Some of these guys have made that 3 year return in a few hours due to the market fluctuating atm.
But that’s not the point, there’s a point of diminishing returns, most want the best discount for the least amount of time spent. So if they can get 8-9% after 30 minutes of talking they will take it over 13.2% after 10 hours on the phone.
What most on this site don’t realize is you don’t get rich saving every penny, money makes money and you save where its most cost beneficial. That 5k you put in a stupid msd right now could be flipped on stocks and once the market recovers you could potentially at the least double or triple that 5k in 8-10 months… so 5k profit in a year or $30/month off ur car payment 
.
Then you have real estate guys, guys for example who are putting money into properties sitting in the market(banks are trying to get rid of dead weight rn)whether it’s short sale, foreclosure, or bank owned properties and they are offering pennies on the dollar to flip these homes within a year or rent them out and flip them when the market goes in an uptick again.
The thinking patterns of many of this forum are pretty narrow minded and obviously focused on leasing. There’s nothing wrong with that but it would be asinine and pure stupidity to think there aren’t better ways to spend that msd money.
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While that’s true, the company I’m working for is actually still hiring. They tried recruiting my close friend even though he’s not even in the market for a job. Some of the big players out there are trying to snap up top engineers at a little discount while they can. Remember, contrary to how it may feel, the world is likely not ending, and if you’re top in your field then demand exists from well positioned companies who wish to capitalize on the opportunity to ride the economy back to recovery. Just my two cents from a different viewpoint than most have right now.
Just a note: the aerospace sector is not where the big bucks are paid to engineers from my peers’ salaries. Airbus offered €30k/yr to a smart friend of mine… also companies like spacex pay around $120k/yr which is okay, but you’re expected to work 60-80 hours a week minimum. They assume you’re an Elon fan boy, and the prestige of working at Tesla or spacex, plus the Elon fan boy effect, makes up the other $40-80k you could get somewhere else.
Take all of this with a grain of salt. There are a lot of people out there all leading lives in different social circles. At the end of the day I hope you’re all safe and well.
Isn’t 120k poverty level for a family of 4 in the Bay Area though?
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Consider deferring the 1k lease for a few months and send two $500 checks to a local homeless shelter and food bank. If graduating with a large salary, fund a scholarship for a needy student. Yes there are needy people even in the bay area. Or increase your 1k spending to include restaurant take out and leave a larger tip or donate some N95 masks. Send a gratuity check to your house cleaner or delivery person or barber.
In a few months, we can go back to Lambos and Aston Martins. I am as much a car lover as anyone but can I drive past the line outside my food bank in my new ride and pretend not to see. Can I look at 6.5 million umemployment claims and think wow how can I score a deal on a Lambo?
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If you do find a deal of a lifetime at 1k, please take it. Put down a deposit and tell them you will take delivery end of next month.
Sign the lease and do it while you’re young. It’s prob much more fun driving a 150-200k car when your in your early 20s then at 38 married with a kid on the way like me . As long as you’re maxing our all your pre-tax retirement plans, and some additional iras etc, there’s no reason not to treat yourself after all the hard work you put in. Since you own your business I’m sure you can tax deduct a good portion of the vehicle and you obviously don’t have to worry about job security. You may have to worry about revenues if SHTF this year with the economy though.
Also it seems that you like what you do for work. So you’re prob not planning to retire already, ha. I was planning my escape from the corporate world about 6-9 months after graduating college.
When I started making 6 figs a couple years out of school I was def spending a g a month on dates and bar nights, such a waste. If a nice car is a hobby then treat the expense that way.
Another piece of advice, get yourself a duplex or triplex to live in for the first couple years out of school. Let other people pay your rent, then the car is basically a wash…
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Restaurant workers are just chilling right now my friend, what would I give to be yelled at by my boss and sucking up to people for cash 
.
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Perhaps you are too risk averse or don’t like cars all that much? I moved about 6k miles away from home and started a new life at 29 and one of my primary reasons for doing so was because cars and gas were super expensive in my home country and I have been a car guy all my life. Needless to say my first car after finishing my MBA and landing my first US job was a BMW for which I paid $568/month while making $65k/year. I will never forget the joy and sense of accomplishment I felt driving that car off the lot so for me it was money well spent.
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If you need the MSD money to play with stocks, you’re not wealthy.
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Yea let’s be honest, there is a very unrealistic perception that just investing money will bring a return, let alone with big multipliers. If you’re not a day trader or using a firm, you could just as well lose the investment on a bad trade or a company tanking. An MSD is to me, more comparable to a CD.
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Throwback to 1992
Or if you want some real nostalgia
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Diversify. If someone has or is getting a $1k lease they should have enough cash to max out MSDs (in order to lock in a high return) and be dollar cost averaging into the market or some other investment. Best of both worlds.
If spending $1k/m doesn’t leave enough cash to still be able to save or invest each month then you’re buying too much car.
I read too many times when someone says they can’t/won’t do MSDs bc they want/need to have liquid flexibility. In that case, you probably can’t afford that car.
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This. If you are going to miss/need that $5-7,000 left with XXX Financial to invest, IMHO you have no business signing your name to a $1k/mo lease. CD analogy is great – and no, it shouldn’t be the only money you have or a rainy day fund lol.
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Can lease hackrs weigh in on what a good lease to income ratio is? Is it 2.5%, 5%, 10%, 25% or more?
Assuming upper middle class income of 10k a month (which is 75th percentile),
@2.5% you are in Toyota Tundra
@5%, you are in BMW 3 series, volvo XC60/90
@10%, you are in M3/4CS, X3/4 M, 7 series
@25% you are in Aston Martin, RR
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Waiting on the bank approval as it’s my first personal loan and it’s $100k. Hopefully it goes through and I’ll be able to take delivery this week. I live in a somewhat remote area and do have access to empty farm roads and some “mountain” (hills) roads, so I’ll be out there ripping it 6ft away from the world 
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I would say pay no more then 5% of your income on payment, insurance, gas, maintenance. That’s very hard for the average American salary though. The 1% makes about 14xs as much as the average American but they don’t have 14 cars or don’t pay 14xs more for their car. Also they have so much more disposable income so it’s hard to compare with a ratio.
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