[richk84]

Plus what's the point cruising round in a m4, pull a fit bird and then it's all undone when you say "fancy coming back to my mums"

[skelts]

You only live once and your only young once. Go enjoy yourself whilst you can before you have any commitments

[Lewis Mc]

Originally Posted by E92Dan

You would need money for a strip club, no girl will want to come back to mummies house no matter how nice your car is

Originally Posted by richk84

Plus what's the point cruising round in a m4, pull a fit bird and then it's all undone when you say "fancy coming back to my mums"

Originally Posted by gangzoom

I think you really need to find a opposite member of the species to keep you entertained

And as mentioned by others living at home isn't going to help. I couldn't wait to leave home when I hit 18, but people are different. Also having a M4 isn't going to help you attract girls any more than a 335....When I had my Nissan 350Z, every girl who saw it thought thought it was Porsche 911....Who was I to correct them

Ironically though, my wife was the only girl I dated who couldn't careless what I car drove

I get what use are trying to say but id be kind of concerned if women at 21 expected all lads to have a house already ! I dont particularly remember asking any girl..before this goes further you must have your own house .Plus I dont think my actual girlfriend would be to pleased about me bring other women back to anywhere ...and I was taught to share the love

Originally Posted by Svothe

Your choice, but whatever your doing. Have you got any vacancies? :P I'm 20 with a 335d but sure would love the income to get an M4.

I don't actually get paid that much, under 2k a month, I've just paid my keep for the year which helps monthly outgoings, and my only bills monthly are a 49 phone bill and 10 gym, so am left with most of my wage monthly to do with what i want, i don't drink , smoke, and all my work mates are 40+ so no nights out haha

[Svothe]

Fair shout, my thoughts when buying the 335 was "Sure it will be expensive to buy, expensive to run, expensive to insure etc.." But I'd rather have a sporty car at 20 when its cool than have one at 40 when all your mates have one and you just look a cock with a mid life crisis. (No offence 40 year old sports car owners.) Go out, enjoy yourself. If not an M4 then about a 1/3rd of the price get an e92 M3, still one hell of a car and you have the added benefit of saying no, I drive an M3 and then roaring off into the distance with your straight through pipes and ridiculous motor.

[SiKkBaSs]

Why M4?...It's horrible...E92 M3 is better.

Get a C63 AMG...or you could always just buy a GTR

[dxb335d]

M4 is dropping like a stone. Get a used one for 50

[AlanYoro35i]

why not buy and let? someone isnpaying morgage for you until you want to move out and you can still buy a nice car after you sort out the morgage. who knows you might be able rent it out to cover your morgage and make a few hundred extra.

[BMB063]

I was in a similar position last year, except I have my own place. In September I decided to sell my 2006 Accord that had been paid off for years and had NO problems. I got the 2011 335i and put 12k down and have a $330 monthly pmt for 4 yrs. My car insurance nearly doubled, fuel costs increased since it's premium, and any part of maintenance is much higher.

Don't get me wrong, I absolutely love my car and I am lucky I had the opportunity to make such a swap, but I will be looking for a house in the next 2-5 years and am saving for a down payment. With that said, you already have a great car! Do some mods, or if you really want a different ride, try to keep it near the same price range that way you can still save for the future. Once you are on your own you'll realize that real quick. Hope this was insightful!

[SteveC]

Buying a house is not such a great financial proposition unless prices are rising substantially, which they're not at the moment.

Saddling yourself with a mortgage, stamp duty, maintenance costs and tying yourself down to a specific area or tying yourself up with all the hassle of becoming a landlord is nuts at your age. Life's too short for all that shag and hassle.....you'll have enough of that later. Wait until you have a family, then its worth doing.

An M4 on the other hand is a financial disaster. Demand is still high so BMW are offering low/no discount and charging a hefty 7.9% finance. Remember how thrilled you were when you first got the 335i? That's exactly how you'll feel again when you get an M4. And in roughly the same time period you'll feel about the M4 roughly the same way you now feel about your 335i. So no point taking the worst financial deal around to get you into a new car.

In your position, I would go for a new 235i. Available with great discounts and very low finance costs, you can enjoy the same new car feeling for half the money and close to half the running costs. The 235i is quite economical, reasonably inexpensive for tyres, tax and insurance and not a lot slower than the M4. It sound brilliant, looks great, handles incredibly well and is an all-round fun car. The money you save over an M4 you can put towards an eventual down payment on a property, or have some great holidays.

The problem with making the best financial decisions is that they are rarely compatible with having fun. On the basis that we're not here for a long time rather we're here for a good time....enjoy the freedom of being young, invest in having a good time but use good judgement and avoid being ripped off.

[misterS3]

Buy a property and rent it out. Boring i know but it's what i did. And i wouldn't have it any other way.

I realise i got lucky with the property market but the property i bought when i was 24 (16 years ago) has put in the position i am now. I'm now in a 4 bedroom detached house (albeit in Glasgow) with a very decent portfolio and business.

My first property was remortgaged 5 years after i bought it and used to save my parents business which i turned round then bought off them. it basically saved 30 years work for my parents. And now continues to be hard work for me, but still worth it.

What cars do i have - X5 40D and GTR both paid off. And i own a bunch of other flats - all based on my first property purchase. BTW that one property is clearing me more cash than i need per month to survive.

What did i drive from 21-30 (i was in london from 24 so didn't drive much) Renault Clio 1.4 RT. But if i hadnt bought that flat i'd be stuck in an 50 hour per week job. I'm now my own boss. I look at other cars but can't find anything to replace any of my cars. So i bought an old 306Gti to do up. It's brilliant fun.

Anyway...get on the property ladder. You'll be set for life.

[SteveC]

The optimum word there is lucky.

16 years ago was the beginning of the biggest housing boom in history (you wouldn't expect otherwise when a Labour Chancellor promises an end to boom and bust).

If you'd have done exactly the same thing 8 years later you'd still be down the pan, buried in negative equity.

In buy to let, there are 2 ways you make money....the gap between rent and interest, assuming there is one and asset inflation (the increase of the house price).

Right now we have a BoE base rate of 0.5%, so long term, where do you think interest rates are going? The way things are today a 1% interest increase can mean a 50% increase in your interest bill

A buy to let that worked perfectly yesterday, ends up costing you a fortune tomorrow.

And when interest rates do go up, which they inevitably must long-term, house prices come down....so if you've bought a BtL and not seen its price inflate substantially, you can be hit with the double whammy of large interest bills and negative equity, which makes it hard to get out, along with the other million BtL sellers trying to get out at the same time.

BTL is a very risky business. Get a bad tenant who gets ill or loses his or her job and your rental stream dries up.

In gambling terms its the toss of a coin.
Heads, you buy a house, watch its price go up and earn money from the rent. Tails, you buy a house, watch the interest rates go up and the price of your house come down while paying money to subsidize the rent.

The problem is, you never read about tails, because it doesn't sell advertising, which is what journalism is all about.

[misterS3]

Originally Posted by SteveC

The optimum word there is lucky.

16 years ago was the beginning of the biggest housing boom in history (you wouldn't expect otherwise when a Labour Chancellor promises an end to boom and bust).

If you'd have done exactly the same thing 8 years later you'd still be down the pan, buried in negative equity.

In buy to let, there are 2 ways you make money....the gap between rent and interest, assuming there is one and asset inflation (the increase of the house price).

Right now we have a BoE base rate of 0.5%, so long term, where do you think interest rates are going? The way things are today a 1% interest increase can mean a 50% increase in your interest bill

A buy to let that worked perfectly yesterday, ends up costing you a fortune tomorrow.

And when interest rates do go up, which they inevitably must long-term, house prices come down....so if you've bought a BtL and not seen its price inflate substantially, you can be hit with the double whammy of large interest bills and negative equity, which makes it hard to get out, along with the other million BtL sellers trying to get out at the same time.

BTL is a very risky business. Get a bad tenant who gets ill or loses his or her job and your rental stream dries up.

In gambling terms its the toss of a coin.
Heads, you buy a house, watch its price go up and earn money from the rent. Tails, you buy a house, watch the interest rates go up and the price of your house come down while paying money to subsidize the rent.

The problem is, you never read about tails, because it doesn't sell advertising, which is what journalism is all about.

I was lucky. But go back a further 20 years my dad bought the property i was born in for less than a grand and i just bought it off him for £150k. More luck. I guess those who bought in 2008 could be deemed unlucky. But i didn't buy. Why? Because i look at the rent to property value. Rents don't change as much as property value. Use that as guide.

Long term property prices will go up. Yes there are huge fluctuations and even massive interest rate rises. But even at the rate of inflation with someone else paying the mortgage, you will end up with a debt free property in your early retirement (or earlier - not sure how old the OP is). That's where i will be in 15 years time. And i'm small fry. I know a guy my age who with his 2 brothers had over 400 properties. It's incredible how they've scaled up over 15 years.

So i'm still advocating buying a property over buying a car. Long term it's still the play. If you're worried about interest rates, then fix. Although the ECB's actions of the past week may give you a clue of what is going to happen over the next 3-5 years with interest rates. I think Denmark and Switzerland cut rates too last week. But you're right. As with every investment, stress test it. See what happens if interest rates go to 5 or ever 10%. Could you still survive. And buy smart. Buy a fixer upper or in an area you know well.

I'm not saying it's as easy or fun as buying a car. But then rarely anything worthwhile is.

[makkan00]

Originally Posted by SteveC

The optimum word there is lucky.

16 years ago was the beginning of the biggest housing boom in history (you wouldn't expect otherwise when a Labour Chancellor promises an end to boom and bust).

If you'd have done exactly the same thing 8 years later you'd still be down the pan, buried in negative equity.

In buy to let, there are 2 ways you make money....the gap between rent and interest, assuming there is one and asset inflation (the increase of the house price).

Right now we have a BoE base rate of 0.5%, so long term, where do you think interest rates are going? The way things are today a 1% interest increase can mean a 50% increase in your interest bill

A buy to let that worked perfectly yesterday, ends up costing you a fortune tomorrow.

And when interest rates do go up, which they inevitably must long-term, house prices come down....so if you've bought a BtL and not seen its price inflate substantially, you can be hit with the double whammy of large interest bills and negative equity, which makes it hard to get out, along with the other million BtL sellers trying to get out at the same time.

BTL is a very risky business. Get a bad tenant who gets ill or loses his or her job and your rental stream dries up.

In gambling terms its the toss of a coin.
Heads, you buy a house, watch its price go up and earn money from the rent. Tails, you buy a house, watch the interest rates go up and the price of your house come down while paying money to subsidize the rent.

The problem is, you never read about tails, because it doesn't sell advertising, which is what journalism is all about.

Interesting post. Do you mind me asking how do you keep up with all this?
Different forums, or just by reading papers / listening to news?

This thread is very interesting.

OP wants to enjoy a new car and sensible people are suggetsing him to invest somewhere else where he does not regret later in his life. I wish I had a chance to go back and I would take some decisions differently to what I did!

[Mani59]

E90/E92 M3?

[Somerset Jim]

Being that I run a wealth management business I feel I should give my penny's worth.

If I were in your shoes and could buy a property at 21 then I would. You have a well above average car by normal standards and could be set up without a mortgage by your late 30's. As someone earlier said, it's not a good look having a hot blonde in the car ready to go so to speak and then doping the bomb that it's either her place or you'll just double check that the parents are out!

I would echo what Steve said regarding buy to let properties. It is healthy to have property as part of your portfolio and I always say to clients if you can then it is worth having 5 or more to reduce the risk of void periods where you have no tenants amongst other things. However ploughing all your money into on property and gearing it (borrowing to do so) really is high risk and something that should be used as a last resort.

In short, keep your car or go for something newer but second hand so that you aren't throwing too much money away on a depreciating asset.

Which ever way you go keep us posted

[SteveC]

Originally Posted by Somerset Jim

In short, keep your car or go for something newer but second hand so that you aren't throwing too much money away on a depreciating asset.

First piece of advice, if your financial advisor is giving you investment advice based on optimising your sex life, look for another advisor

Jim, under normal circumstances the above would be good advice, but these aren't normal times and maybe you haven't been keeping up with the car market recently.
Generally speaking there are 2 things going on: Manufacturers and dealers are pushing new car sales by providing discounts, positioned as manufacturer's and dealer's deposit contributions and have been setting abnormally high residuals on certain models as a way of reducing monthly payments. In addition, many high power (higher consumption, higher tax) models come with 0% finance when purchased new.

So when you buy new, you can find the most exciting models in the manufacturer's range with 2 good discounts (dealer and manufacturer), 0% finance and a high residual, whereas the used market carries the normal finance charges and reflects the high residual values.
Add the fact that a new car has 3 years warranty cover, brand new tyres, needs no MOT and only an annual oil and filter change and financially the new car is the better deal (assuming you pick models like the OP is discussing).
There are obviously certain new models to avoid....typically those selling well, like the new M4, which attracts few promotional incentives.

As example, a local Mercedes dealer negotiated a brand new Mercedes SLK 250d AMG NP £37K with 12,000 miles p.a for £1200 initial and £238 x 23
Calculate depreciation at 40% and interest at 4.9% and you get £16,650 vs actual payments of £6674
Compare that to a typical 2 years old £25,000 used car with the regular deposit and finance and you'll see how much more attractive the new car is. Of course the new car requires GAP insurance but that costs £140 for 2 years cover.

Yesterday the sage advice was to buy used to avoid the high year 1 depreciation. Today my advice is to buy new to avail oneself of the many cleverly disguised discounts available only on new lease cars

[Somerset Jim]

It's about priorities if you put it like that then Steve. If the OP wishes to spend a lot more on a newer car then fair enough. I know which way I would go but can see where you're coming from.

My old man ended up ordering the new X4 just a couple of weeks ago and when we sat down and crunched the numbers it worked out expensive but it was the 0% on half the car that swayed it for him. He was of the opinion that he wants to enjoy early retirement and liked the feel when compared to the Volvo equivalent or a 2nd hand X3.

The first point you raise was meant to be tongue in cheek and funnily enough hasn't been the basis of any discussions to date. lol!

[lolololol]

Easy decision, buy a property 'in the right' area. To say property isn't going up is also wrong (again depending on area) as an example my house has gone up £80k in a very short time due to cross rail.

You have a great car already - mod it and squeeze over 400bhp out if it easily!! Ta da new car feel!

Buy an appreciating asset - property will always go up long term - you could be well sorted by your early 30's if you make the right decision now !!!.......buying an expensive car on 'the never never' is not smart.

2p.

[Russbmw]

This thread is dead.

The result is here:

http://www.e90post.com/forums/showthread.php?t=1083807

FWIW, I too agreed with all the other guys saying get a house, as the 335 is already a nice car.

It's what I did - and what all my mate's didn't. So whilst they were rocking round in Impreza P1's and Skylines, I had an 84 plate e34 525.

Apart from one guy (who has had a string of supercars.......but I think is still renting....), all my mates eventually settled down and got houses and wives, and are mostly now all rolling round in either own purchased or company owned 1.9 diesel's of some variety.

Whereas I (having managed to survive a divorce) have a nice house, a 335, an X5, and a Kawasaki Z1000. All of which (aside from the house, obviously!) I own outright.

I think that's one of the main divides between younger folk. Some have wants but keep them in check for the sake of longer term reality (and more desire for independence!), whereas others would rather stay living at home and get a massive loan on a car they will never truly own, but that gives the right impression.......which I can appreciate, but never really made any real sense to me.

[dy63]

i wouldnt buy a car on finance so young if i didnt have the money to buy it outright.

whats the deposit on the 4 series? many people our age are driving renault. ford and VW etc but if they wanted too. im sure they could pay 300£ p/m on a 4 series and live at there parents house.

you made a risky decision. the job you have may be a good one. but if soon you get made redundant for some reason fingers X you dont your stuck with a 4 series that you wouldnt be able to keep up paying because income isnt coming in like it used too, hence why buying cars outright is the best way tbh.

[nicktyler]

It's not a competition. The OP asked for advice. Got some, made his decision and paid his money

[SteveC]

Originally Posted by cupraraj

i wouldnt buy a car on finance so young if i didnt have the money to buy it outright.

whats the deposit on the 4 series? many people our age are driving renault. ford and VW etc but if they wanted too. im sure they could pay 300£ p/m on a 4 series and live at there parents house.

you made a risky decision. the job you have may be a good one. but if soon you get made redundant for some reason fingers X you dont your stuck with a 4 series that you wouldnt be able to keep up paying because income isnt coming in like it used too, hence why buying cars outright is the best way tbh.

What does age have to do with it? if you can't make payments, you can't make payments...at any age. Forty year olds lose jobs.

What happens to your house if you lose your job and don't get another within a reasonable period? You can't make your mortgage payments and your house is repossessed. So no difference....debt is debt.

I've had a lifetime of buying and selling houses. I've made money and I've lost money. Over a long period I've made a lot more money with carefully made investments and with half the hassle.

• Houses need maintenance, sometimes lots of it
• They need tenants, which is a pain
• The income is taxable, at your marginal rate
• You need a large loan to buy it, with relatively high interest if you don't have equity
• Its costly to buy, with fees, duties etc.
• Its costly to sell with fees etc.
• Its a fixed asset and extremely difficult to liquidate funds
• Its subject to the vagaries of council planning
• The overall returns are quite low vs. the risk
• Its mainly a leveraged investment (i.e you borrow money to invest)
• If something happens to the market and you want out, you join the queue of the other million buy-to-let sellers
• If a Labour Government gets in and they introduce rent controls, who knows what happens to BTL, since Labour are not interested in the Landlord's position
• The ONLY advantage is that you make gains on the leveraged portion but by the same token you own ALL the loses the property may take, which can be substantial.

If you want to participate in the housing market, but avoid all the hassle listed above, invest in a fund of buy-to-let properties, something like TM Hearthstone UK Residential Property Fund. These funds are built around a portfolio of buy-to-let properties, spreading your risk and if you place your investment under a Personal Pension tax blanket, you get 20% or 40% tax refund on your investment (put in £1000, your investment is instantly worth £1400). Your gains are tax free until you actually take the pension and free of Inheritance Tax as long as it stays in the pension. You can invest gradually and have no huge 'sword of Damocles (mortgage loan) hanging over your head. You have no tenants to deal with, no buying and selling properties and no maintenance hassles.

Disclaimer
I am not a tax or investment advisor and the above is neither investment nor tax advice, simply my opinion of comments in this thread.