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The difference in cost between a luxury item and a regular item is also masked by the availability of credit. You can lease a high end Mercedes for the same monthly payment as buying a Honda Accord. It could be that a large portion of that 86% of luxury cars driven by non millionaires are leased.



"You can lease a high end Mercedes for the same monthly payment as buying a Honda Accord. It could be that a large portion of that 86% of luxury cars driven by non millionaires are leased."

...which makes the bottom line even more pathetic. You make your payment on the Honda Accord, and after a few years, you own it. It continues to be drivable, and the amortized cost of ownership begins to decline.

If you hop on the luxury-car leasing merry-go-round, then sure, you get to drive a new car every few years, but the payment never goes away. Meanwhile, you've almost certainly over-paid for the car relative to what it would have cost to buy up front.

When it comes to cars, the financially responsible question is not "4Runner or Lexus?"; it is: "can I live without one?"


I think 'can I afford to live without it' is a miserable way of going through life. I certainly could live without ever going to nice restaurants, trying things like kiteboarding and skydiving, going snowboarding or mountain biking, but why forfeit things I enjoy so I can look at my bank statement and see a slightly larger number at the end of the month than I would otherwise?


I'm not advocating asceticism -- if owning a car is so important to you that you're willing forgo other luxuries to do it, then that's your choice. But don't pretend that it's always a sacrifice to live without owning a car, or that the choice to own one is automatically financially prudent.

For many of us, cars are nothing more than a rarely used, depreciating asset with high maintenance costs that gets us from point A to point B. I'd rather rent one occasionally, and spend the money I save on all of the other things you mention.


Cool, I see your point. If I rented a car to go snowboarding/mountain biking as much as I do I'd very likely spend almost as much as owning one ;)


You can also pick up a very nice second hand Mercedes for the same price as a new Honda. And the Mercedes will probably last you longer. Driving a BMW or a Mercedes doesn't have to expensive.


only if you do the repairs yourself. Speaking as someone who paid a (I thought quite reasonable) ten grand or so for a '92 bmw in '99 or '00, I was rather shocked at what you get charged when you drive one into a garage.

If you work on them yourself, sure, then it's not much more expensive.

Oh, also, I'm fairly certain that the German brands are actually a good bit less reliable than the Japanese brands in general. I know that my experience with a less than 10 year old BMW was that it was rather less reliable than my current more than 10 years old Nissan.

I mean, the BMW is a nice car; in terms of handling, I agree that you are getting something for the money. But don't kid yourself. It's going to be quite a lot more expensive than a Japanese car, even if the up-front cost seems reasonable.




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