By on September 23, 2011

Freshly minted college graduates usually aren’t the best credit risk – especially in today’s unpermissive environment when it comes to jobs. BMW thinks otherwise and declared that a good student needs a bimmer for graduation. On credit. Real credit. No more phony college credits. This is the real thing!

BMW started a College Graduation Program to get  college graduates and young professionals in a bimmer and debt. According to a press release, “the Program encompasses both leases and loans and applies to new and certified pre-owned BMW and MINI automobiles, as well as BMW motorcycles.”

You need to either have graduated within the last 12 months, or are eligible for graduation with an undergraduate or graduate degree within the next 4 months and have a bona fide job offer. That’s pretty much it. Oh, payments shouldn’t be more than 25 percent of income.

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94 Comments on “Just Graduated? Heavy Student Loan? Buy A Bimmer!...”


  • avatar
    Philosophil

    25 percent of income? This is obviously not being aimed at those with large student loans…

    • 0 avatar
      protomech

      25% of my income is less than my house payment. Talk about some messed-up priorities.

      • 0 avatar
        yesthatsteve

        My house payment is 12% of current household income, and about 20% of mine.

        The last car payment I had came in at just over 3.5% of household income at the time we took it out. That was about 6% of mine.

        I can’t imagine spending 25% of my income on a car payment. I can’t imagine spending 25% of the income I had at my first “real” job after college on a car payment. 25% of my salary at that first job was more than the mortgage payment on my first house.

  • avatar
    Feds

    To this day, I STILL kick myself for spending 25 large (Canadian, including taxes, tags, etc.) on a brand new Protege5. This was 4 months after graduating, while working a 50k/yr job and living with my future wife who was also in the 50k/yr range.

    All the things I could have done if I had just spent 10k on something decent. A truly monumental waste of money. And I say this as someone who is still driving that Protege, 8 years later and 70k further up the household income ladder.

    Live and learn.

    • 0 avatar
      jmo

      Think of all the things you could do now with no car payment. You got it out of the way early. If you had spent 10k, you likely wouldn’t still have it 8 years later and if you did it would have way more miles.

      • 0 avatar
        Feds

        Yes and no. I’ve been in a 2-car house for all those years. My other cars were;

        ’89 323 – Given to me by my parents when it toasted it’s 3rd automatic transmission. Bought $300 manual parts car and did a trans swap. Crashed it into a curb playing Colin McRae on a snowy day. Scrapped for $200
        ’91 Olds Cierra – $1200, sold for $500
        ’91 Dodge Ram 50 – $2000, scrapped for $200
        ’84 Mazda B2000- $1200 plus a DIY headgasket change ($200), sold for $750.
        ’68 VW fastback. Bought for $3,500, sold for $3,000
        ’98 Pathfinder – Bought for $4k, recently recalled by nissan and bought out for $5300.
        ’84 VW Cabriolet. Bought for $500, sold for $1,000

        So I’m out of pocket $1,700 for close to the same mileage.

        There is some time value of money stuff in here, as I haven’t done much wrenching on the Protege, but I _THINK_ I’m finally in a good enough time/knowledge place that I can move “transportation” out of the expense column and into the revenue column. At the very least, I can flip 1-2 cars/year and supplement the “good” car I’m driving. The Protege is currently worth ~$2k, and probably has 5 years left in it. It definitely won’t be replaced with a new car.

    • 0 avatar
      ellomdian

      Someone who just graduated, looking at 100k/yr household, sad in hindsight that he spent sticker price on a sub-30k car.

      Ahh, first world problems. Most of the recent grads I know are happy they can share a bus pass on their household.

    • 0 avatar
      Dynasty

      8 years ago you had 100K household income.

      Today you have 170K household income?

      And you are concerned about a 25K “mistake” 8 years ago?

      Just about anything you could have bought for 10K then you would probably not be driving any longer and would have spent at least 15K replacing it.

      If you drive the protege for at least two more years, I see no mistake with that car.

    • 0 avatar
      Ubermensch

      Champagne problems.

  • avatar
    A Caving Ape

    Hahaha. Wow. Not too sure how well this will go over. Being a freshly minted grad myself, and knowing a lot of others to boot, I’d say I have a fair bit of anecdotal evidence on the car buying habits of this demographic.

    Nobody is buying new. Those smart enough to do well in school and get good jobs are also smart enough to avoid pointless debt.

    • 0 avatar
      jmo

      Nobody is buying new.

      With the current crazy state of the used market – can you explain why?

      • 0 avatar
        A Caving Ape

        The used market is crazy in the 2-3 year old, recent trade-in or off lease market. Older used cars are still up, but paying 11K cash for a car you could have had for 9500 a few years ago is still preferable to going $20K into debt for something new. And the used market is overall up, of course, because people want to buy used.

        I’m starting to extrapolate a bit far from the buying habits of one graduating class (of engineers, by the way), but it seems as though those who did actually get the really good jobs (a select few) are trying to buy houses.

      • 0 avatar
        jmo

        are trying to buy houses.

        Obviously one can’t go wrong with that. It’s not like houses could still be 30% overvalued…. nah… that would only be true if interest rates were to rise and how likely is that?

      • 0 avatar
        A Caving Ape

        Haha, I’d be waaaaay out of my depth trying to address that one. Personally I got a job only vaguely in my field, rent, drive beaters, and save as much as I can

      • 0 avatar
        jmo

        but paying 11K cash for a car you could have had for 9500 a few years ago is still preferable to going $20K into debt for something new.

        How do you figure? You’d have to know how many miles were on the vehicle, the expected remaining useful life and expected maintenance costs. I’m certainly not convinced that paying 10k for an Accord with 100k miles on it makes sense financially.

      • 0 avatar
        A Caving Ape

        Well, now we’re into the age old debate. Speaking purely for myself, I would rather spend less on a car because I don’t plan to own it for more than a few years. Buying a cheaper, more depreciated car is a great bet-hedger. If I end up scoring a higher paying job, I can sell it for only moderately less than I bought it for and do the upgrade cash only. But if I lose my job, well, I’ve got no car payment and if in desperate need of cash, I can sell or downgrade. Doing a large amount of maintenance myself is obviously a factor here, too. Buying new and financing would be committing to 7+ year ownership or else facing a huge hit in depreciation.

      • 0 avatar
        jmo

        Buying new and financing would be committing to 7+ year ownership or else facing a huge hit in depreciation.

        Right – I’m of the buy a new Civic for 16k and keeping it for 15 years rather than buying a 10 year old BMW with 100k miles for 8k.

    • 0 avatar

      As a student currently, I elected to go for a older car than for a new but cheap car. I lose on maintenance, but I prefer the car hugely, and its just way less out of pocket, and way less on my mind (in terms of debt).

      Student in an 05 Outback ftw.

  • avatar
    jmo

    Given a C/S degree and the right undergrad experience and you can make 75k to 100k to start. If mom and dad paid for school, why not get a BMW? This would be doubly true if you landed in a low cost of living area.

    • 0 avatar
      Feds

      http://ww1.dowtheoryletters.com/DTLOL.nsf/htmlmedia/body_rich_man__poor_man.html

      Because society is collapsing around you, and you’re gonna need that money sooner or later.

      BMW now and work until you’re 75, followed 6 months later by your funeral, or sloppy jalopies for 20 years, and retirement before you’re 50.

      • 0 avatar
        jmo

        Because society is collapsing around you

        Really? Better wear your tinfoil hat then.

        retirement before you’re 50.

        Some of us enjoy being productive. Are you really saying you’d like to drive a s*it box your whole life so you can sit on your ass when you’re 50? That seems kind of pathetic. Yeh, yeh, you have all these fascinating hobbies… spare me.

      • 0 avatar
        Feds

        I really can’t stack replies here? Strange.

        Either way, you’re probably right: Healthcare is definitely going to get cheaper, and Social Security cheques are guaranteed to provide a reasonable standard of living 30 years from now. On top of that, there is NO WAY taxes are ever going to increase, so that $100k starting salary is always going to have the same buying power that it does today.

        Man, I’m going to feel like a total moran when I pay off my mortgage before I’m 35 and have enough appreciating assets to become financially self sufficient by 45. If only I could have those years back, cruising around in a BMW, showing people how large of a loan I was able to take out. That’dve been sweet.

        And no, my hobbies are utterly boring. Most of them involve turning small piles of money into big piles of money, and there is no possible way I’d be able to keep any of that up once I stop punching the clock 9-5.

      • 0 avatar
        jmo

        $100k starting salary is always going to have the same buying power that it does today.

        One would assume if your savvy enough to land a job paying 100k out of school 100k is just the starting point.

        and have enough appreciating assets to become financially self sufficient by 45.

        Assuming you don’t do what some of my fruguler than thou friends have done and end up pissing it all away of ill timed investments.

    • 0 avatar
      stuntmonkey

      “Given a C/S degree and the right undergrad experience and you can make 75k to 100k to start.”

      My work hires recent graduates on a regular basis. I can tell you, when it comes to twenty-somethings, they have some of the most delusional expectations of what real world average salaries actually are.

      • 0 avatar
        tankinbeans

        I’m very much an early twenty-something, I’m 23, and I guess I learned early just how much to expect to earn. My whole school career has been predicated on how much I can afford to pay back at the end and I’ve tried not to be an arrogant person (sometimes I’ve probably failed miserably) and I’ve been working PT since I was 17, FT since I was 18 (had to help with household expenses) and have been trying to cobble together an A.S. – which I’m within throwing distance of completing. Although with the way things are going, I might just move into a B.S.

        I guess my point here is that the idea of paying off debt won’t be something new to me as it is for may whose parents have assisted with everything.

      • 0 avatar
        hreardon

        I’ve actually stopped looking at the recent graduate marketplace in the last year because I am able to find far more mature, reliable and most of all: seasoned and experienced employees who are in their 40s – early 60s for very similar pay.

        My last 20-something employee was a kid who stayed up until 3am nightly to play WoW, then made a point of telling me that it would be okay if he came in late to work because it didn’t matter if he was in the office or not to complete his job duties. It was at that point I decided to “free up his time” so he could pursue other endeavors…

    • 0 avatar
      aristurtle

      Given a C/S degree and the right undergrad experience and you can make 75k to 100k to start.

      I loved the nineties, too, but we aren’t in them anymore.

      • 0 avatar
        psarhjinian

        Even in the nineties that was dicey. It wasn’t uncommon for HR departments to, eg, ask for people with seven years of Java experience.

        In 1997.

        Did I mention that it was also common for HR departments to ask for CS for helpdesk jobs. Do you think helpdesk pays $75k?

        CS or EE might have gotten you a good job in the right place back in 1995, but was far from a given thing and you had to shop around a lot. It certainly won’t do so now, not when CS/EE is easily, easily offshored; if you want that kind of money right out of school, you’re basically stuck with medicine or entrepreneurship.

      • 0 avatar
        jmo

        So, you’re saying an android developer with a C/S degree from a good school can’t make $75k to 100k in Boston, Austin or San Jose? I’m here to tell you you’re wrong.

      • 0 avatar
        darkwing

        Demand for top-tier developers is as strong as ever, with strong salaries to match. Generally, the people who argue this isn’t the case aren’t top-tier.

      • 0 avatar
        28-cars-later

        +1 aristurtle.

    • 0 avatar
      DenverInfidel

      There is a very basic disconnect between perceptions of income and actual wealth. Income does not equal wealth.

      Nice salaries spent on depreciating assets will never make you wealthy. But living below your means and the time value of money will.

      That is one reason, among many, to pass on the new bimmer in your 20′s…

      • 0 avatar
        jmo

        Nice salaries spent on depreciating assets will never make you wealthy.

        Not at all. Who would you rather be at 67? Bud777, who never made more than 50k and has a couple million and no debt. Or someone who started out making 100k and retired making 500k and also has a couple million a no debt.

      • 0 avatar
        DenverInfidel

        @ jmo – Why are those the only 2 options? A lifetime of work is not an either/or proposition.

        Which brings up the obvious question: how does the newbie amass that couple million for retirement living on their full salary? They never will. A $100k salary does not equate to a fat retirement, just the ability to make usury payments.

        Very few people pull down a $500k a year “salary”. Those incomes belong to very specialized medical professionals, high-level executives, successful business owners, and most importantly, smart investors. Very highly educated or highly entrepreneurial.

        The gains made from being wise in your early years cannot be made up later. Consumer debt is economic slavery – especially for the young and unwise.

      • 0 avatar
        jmo

        Which brings up the obvious question: how does the newbie amass that couple million for retirement living on their full salary?

        Who said anything about his full salary? He’s making ~5,000/month take home. If he puts $1,000 a month in his 401k and 500k in to savings that’s $3500. If he’s renting a one bedroom with his GF that’s maybe another $500. He’s got $3000 left – there is enough slack in that budget for a 328i.

        When he retires his 401k (assuming a 3% employer match) would have a balance of $3 million.

  • avatar
    cutchemist42

    Graduated university with an Econ degree, wasting my degree renting cars……Still can handle my used Protege5 purchase though which I got for $4900 Canadian.

    I feel bad for graduates who fall for this thinking graduating uni puts them on top of the world.

  • avatar
    mike978

    At least BMW are putting some sensible restrictions on – having a job offer or job and not spending more than 25% of income. Should people do it, probably not but BMW are not just giving loans to anyone.

  • avatar
    Educator(of teachers)Dan

    LOL, when I graduated college (1999) my present was that my parents forgave the money I still owed them for the 1987 Oldsmobile Cutlass Supreme I was driving. Dad and I went to the DMV and transferred the title to my name.

    Over 10 years later I still haven’t owned a new car and I can’t see how I’m worse off for it.

  • avatar
    AMC_CJ

    We just bought our first new car. I put the money down, the wife is making the payments. The payment is less then a paycheck, so I don’t know, I’ve never personally had a car payment although my tools at work amount to almost what she’s paying on the car (mine will be paid off, much sooner though, as why I pay so much towards them).

    But I waited a few years out of college, as the first job I got was pretty crappy. We’re a bit more on our way now. I think the main thing to do is to get setteled in.

  • avatar
    aristurtle

    I love how they included motorcycles. When I think of “the kind of buyer who won’t total an S1000RR before he finishes paying it off” I’m totally thinking of a 22-year-old who finished college a month ago.

  • avatar
    bud777

    well, speaking from the other side of this, as someone who worked 45 years and still does occasional projects, I have to agree with the “buy used” approach. I drove a Lotus Europa from 1978 to 1994, bought in pieces for $3000. After several restorations, it was worth $10000 when I lost it to a fire. My wife was willing to drive old station wagons that we never paid more than $5000 for. I never made more than $50,000 a year, but we always managed to save at least 10k of that. we put our daughter though an ivy league school (Smith) with no financial aid or loans and took family vacations of 5 weeks to Africa, Guatemala and Nepal.

    At 67 we have a couple of million and no debt. None of this would have happened if we had bought new cars. The cash flow would have prevented us from building up any savings and that would have prevented any opportunity to invest.

    Now we have a 2006 Saab SportCombi with 35k miles that my wife bought for $15k and a 93 Infiniti G20 with 126k that I bought 4 years ago for $3900. For the past 4 years i have tried to make myself buy an Infiniti G37, but after all these years of driving old cars, i just can’t see the reason to do it.

    Cars are built so well now that most (other than BMW’s) will go for 200,000 miles. Driving the second 100,000 instead of the first can make all the difference

    • 0 avatar
      jmo

      I never made more than $50,000 a year

      How, baring some significant physical or cognitive impairment, is such a thing possible?

      • 0 avatar
        Jack Baruth

        Fifty grand a year was pretty serious money forty-seven years ago when this fellow joined the workforce, but in all seriousness, there are plenty of places in this country where only the doctors and lawyers make more than $50K, if that.

        You might want to look at median income tables in the United States. Half of all American workers earn under $67K.

      • 0 avatar
        jmo

        there are plenty of places in this country where only the doctors and lawyers make more than $50K, if that.

        Right, half the population has an IQ under 100 and that limits their earning potential. But, at least based on his writing, Bud doesn’t seem to be part of that demographic.

        You might want to look at median income tables in the United States.

        And, to be clear, I’m not talking about them, I’m talking about people who would be commenting on a blog in the middle of the day.

        Also, I can try and get you the link to the salary tables by region but CPAs, IT folks, engineers, nurses, cops, project managers, business analysts, etc. all can easily make more than 50k.

      • 0 avatar
        bud777

        In 1967, I started work full time at $8700 per year, in 1990, I was making $50,000 when I was laid off. By that time, I had saved $100,000. I worked for the next twenty years as a consultant doing small projects when I could find them. I invested well, but so even though I earned under $50,000, the investments made a contribution to my net worth every year. About $500,000 is appreciation on our home which we own with no mortgage. I have adjusted the home value for the current market. Maybe $300,000 came from stocks. The rest was simply the result of living frugally (except the vacations) and not making car payments.

      • 0 avatar
        jmo

        What cost $8700 in 1967 would cost $56172.20 in 2010.

        What cost $50000 in 1990 would cost $82334.60 in 2010.

        So, my question is – in 23 years of working you salary only increased by less than an inflation adjusted $20k and from a very respectable start. Why the stagnation?

      • 0 avatar
        bud777

        I wrote software and managed software development for those years. I think that there is salary compression in that field as you advance. Only about 5% of the people who start in software development are in it after 17 years. If you don’t start your own company and are stuck in middle management, stagnation is a constant problem. Your skills in programming are constantly being challenged by the technical change. How many IBM 360/OS programmers do you know? I feel pretty good that I was able to do it for 44 years or so.

        But the stagnation in salary is not the point here, the point is that, in spite of this, you can reach financial security if you manage the outflow, and car payments are one of the biggest areas you can control. We could ave done everything right and been wiped out by health expenses or a host of other things, we were lucky. But, it wasn’t all luck. It is hard to own a new car for less than $5000 per year when you include depreciation. The money we did not spend on cars was the most significant factor in where we are now. I have taken the time to write all this because it is something that the individual can control. You don’t have to win the lottery or make $250k a year. Just make the right decisions day to day. The $10k a year goal for savings was crucial.

        The other aspect of this is the quality of life that comes from having a reserve. I always knew that if the car died, i could buy another for cash without breaking a sweat. Contrast that to driving an out or warranty BMW and hearing that strange engine sound with a maxed out credit card. Other than worrying about the Beagle Boys (ask your Dad) I never worry about where the money is coming from.

      • 0 avatar
        jmo

        Your skills in programming are constantly being challenged by the technical change. How many IBM 360/OS programmers do you know? I feel pretty good that I was able to do it for 44 years or so…But the stagnation in salary is not the point here

        I can’t help but think you would have been much better served if you’d spent a little less time thinking about how to save money and a little more time thinking about how to keep your skills up to date, ensuring your career was on track, etc. so you can make more money.

        I’d assume that almost everyone would agree that someone is 22 and making 56k and in 23 years is 46 making 82k, that very serious issues must have been present to cause such stagnation.

    • 0 avatar
      bud777

      JMO, Thanks for your concern. I will aggressively re-examine my life to see where I went wrong. If I find any serious issues, I’ll get back to you.

      • 0 avatar
        jmo

        Bud,

        I didn’t mean that. I’m just suggesting that if one’s goal is to save (in your example) $10k year, one would be well advised to ensure that both their earnings and savings are being maximized. To concentrate excessively on one, to the exclusion of the the other, is likely suboptimal.

    • 0 avatar
      tekdemon

      smith isn’t an Ivy League school. I didn’t go to an Ivy and I don’t think it mattered since I didn’t wanna work on Wall street but you can’t just claim random things are ivy league schools.

  • avatar
    stryker1

    This is actually pretty dastardy marketing. The first thing I wanted to do once I graduated and got a job was trade in my student-beater for a posh set of wheels (settled on a 2006 Honda Civic, which seemed quite posh compared to my 98 Saturn something-or-other).

    I could absolutely see lots of students dying to make a really bad decision as soon as possible if it got them in sweet ride.

  • avatar
    DenverMike

    What are they teaching in schools? You never rent money. When he can pay cash for the BMW, he can afford it… Words BMW hates to hear. Once he reaches 25K in savings, he’ll realize what a waste BMWs are and buy a new Ford or maybe a down payment on a house.

    • 0 avatar
      jmo

      You never rent money.

      Then how does he buy the house with only a downpayment? Also, with housing still 30% over valued and a shakeout likely to continue for at least 7-10 more years – why would housing be something he’d want to invest in? Your advice has the ring of 2006 about it.

      • 0 avatar
        DenverMike

        I’ll give him a pass if puts it down on a house especially it’s in the 50K range. Good starter homes average that in most rural areas. If he’s already making enough to swing BMW payments, wouldn’t take to long to pay for a house out right but that’s not what they teach in school.

      • 0 avatar
        DenverMike

        My advise is to buy as opposed to renting even if over valued especially if you can own outright. Housing could be undervalued. Listen to what ever experts you chose and weren’t these the same experts that claimed realestate was a solid investment in 2006?

      • 0 avatar
        jmo

        weren’t these the same experts that claimed realestate was a solid investment in 2006?

        The National Association of Realtors is saying, much like you, that it’s a great time to buy. But, then again, they’ve always been saying that.

        Since most jobs that start at 100k aren’t in rural areas, where starter homes start at 50k, I’d say that it’s certainly possible that it makes more sense to go into 35k in debt for a car that will depreciate by at most 35k vs. going 350k in debt for a home that could easily still drop by 105k.

      • 0 avatar
        DenverMike

        A rural area might be within commuter distance or perhaps in his home town as rental property but when have base BMWs ever gone up in value? Can he live in his BMW? Rent out the back seat?

      • 0 avatar
        jmo

        Mike,

        How applicable is your advice for the vast majority of recent college graduates who A. Can’t yet commit to living in one place for at least the next 7-10 years B. Don’t want a marathon commute C. Don’t prefer to live in the country?

        I’d have to ask if you’re some kind of monetary masochist who enjoys going to extreme lengths to save relatively small amounts of money.

      • 0 avatar
        DenverMike

        You may be right about a young guy prefering to live in a big city where he may work but that doesn’t mean buying or leasing a new BMW is ever a good or OK investment for someone in his position. Same goes for paying cash for the thing. I might have been tough on myself at his age and have yet to pay interest on a vehicle, house or anything. You can spend your life chasing money as most Americans do, never getting ahead or with a little discipline, OK alot, you can have money chasing you. That’s my problem now. Finding worth while places to put it and yes that includes buying up rental propery at today’s prices and yes I’m diversified.

      • 0 avatar
        jmo

        with a little discipline, OK alot

        That’s very true of someone who starts out making 25k or 35k. It’s not true of someone who starts out making 100k.

      • 0 avatar
        DenverMike

        Yeah no kidding it’s easier for someone entering the job market at $100,000 to start on a path to wealth as compared to someone just over minimum wage but it’s all relative to spending/wasting habits. Yes I skipped college and worked those blue collar jobs but lived well within my means and of course drove some ‘classics’ although well maintained. Soon as I could, took my experience and all my savings and bought out my boss and haven’t looked back since. You may have taken a more orthodox approach but I did exactly what I needed to do and by not renting money, did it that much quicker. Maybe wouldn’t have made it at all. Renting money starts you on visious cycle that some never get off.

      • 0 avatar
        jmo

        Yeah no kidding it’s easier for someone entering the job market at $100,000 to start on a path to wealth as compared to someone just over minimum wage but it’s all relative to spending/wasting habits.

        Which is, more or less, my entire point. There’re two sides to the coin – earning and saving – and each are equally important. The degree to which you skip college and work a series of blue collar jobs could mean that a BMW is affordable when you’re 45 vs. someone who starts out at 100k and finds that a BMW is eminently affordable at 26.

      • 0 avatar
        DenverMike

        Having a new BMW loan/lease at 26 and ‘affording’ one are not mutually exclusive. I could easily have easily financed a new BMW at 26 and even paid for it in cash but had better aspirations and thought better. I didn’t have college degree to fall back on but that’s different topic. The college grad that lands a $100K salary and cuises around in a new BMW might barely afford a new Taurus once the marriage/mortgage/kids/private school become a reality. He might be making $200K by the time the kids hit high school and maybe not. A typical college grad can retire with an extra couple million by not renting their way of life.

    • 0 avatar
      jmo

      Can he live in his BMW? Rent out the back seat?

      No, but he’s also not going to lose $100k on it either.

      A rural area might be within commuter distance

      I’m assuming he doesn’t want to spend 4 hours a day commuting.

      • 0 avatar
        DenverMike

        Alot of people that dislike their commute, absolutely love living in the country. 350K will get you mansion on 20 acres in most rural areas but lets stick to ‘starters’. Price fluctuations only matter when flipping. In 7-10 years, a 30% drop will be offset by inflation.

  • avatar
    GS650G

    I just bought a new car (Acura TSX wagon) because I liked it and there were no used ones, really. Actually it was hard to find one new due to the earthquake. I’ve done the used car route and it’s fine, but don’t think it’s the only way to go. Financing for new cars is almost always cheaper, there is the warranty aspect of it, and at least you get to pick the color.

    I live in a low cost area, I made careful choices about housing and taxes since those two can really eat your income. We are all more taxed today than ever, despite wags telling us the 92% top rate in the 50′s was the norm. No one ever paid that much and we didn’t have taxes like today. Your biggest bill is taxes every month, not the BMW payment.

    Keep that new car past 8 or so years and it’s a wash compared to used. People waste more money buying and selling houses. One pillar of wealth creation is to buy a modest house and stay put. Selling and buying houses is expensive, and having more house than you need is foolish. Consider paying off a home in your early 50′s, right when the layoffs come along.

    • 0 avatar
      chaparral

      Total Federal tax revenue was around 15% of GDP, the lowest it’s been since well before WWII. Total tax revenue at all levels is about 30% of GDP, again the lowest it’s been since well before WWII.

      We have a lot MORE taxes now but they all don’t amount to a hill of beans anymore. Last year I paid under 30% for all taxes, all levels, as a single man earning $70k and taking only the standard deduction.

  • avatar
    truffle_shuffle_steer

    I just graduated school as a MechE starting salary 47.5K… I have to say after 5 years (co-op) of scrounging through college trying to make ends meet it seems like a ton of money. The used car market is CRAZY right now, but there are deals to be had. I did a ton of looking and picked up an ’04 audi a6 2.7tt with 46k for 13 grand. Yea that’s allot of money, but I can probably sell it in a few years without loosing more than a few grand, it’s four wheel drive to my mom doesn’t completly freak out about my dad co-signing a loan with me on a fast car, and the loan is 2% interest. I was thinking about making more than minimum payments on it to try to build up some equity in it, but what’s the point?

    For allot of students it’s a decision to spend all income on high interest school loans instead of saving up for the car they need to get to work. I was lucky for two reasons. The depreciation meant that the black book on my car was WAY higher than the sale price and my dad co-signed a loan.

    What I really wanted was a simple stock 02 wrx without a million miles for about 11 grand. Doesn’t exist… Everything else I looked at was either allot slower, allot more expensive, or a mustang that I ALMOST bought (so immature… so awesome)

    So yea this BMW thing makes sense- why save up money to buy transportation you need and get nailed with school loan interest when you can spend $300 a month and spend the rest paying off loans.

    Am I going to get rid of the audi once I get less in debt, more settled and decide what I really want? Yes

    Did I really want to go all in an buy a turbo’d LS C4 vette as my primary transport when I need to make a good impression showing up for work early EVERY day at my first real job?

    No

    Am I somewhat disappointed by a car with an amazing motor thats crammed all the way in front of the front axel… maybe a little…

    • 0 avatar
      A Caving Ape

      Ha! You sound like me. Same degree and starting salary even. Except I waited for a year after getting the job and bought the car with cash. Though I opted for the nice, light, cheap to mod 03 A4 1.8.

      And hey, I don’t have to worry about voiding the warranty, ’cause it’s expired anyway!

      About that WRX… I found that one. It had 80K, immaculate paperwork showing all preventative maintenance, and was a wagon with a stick. I thought I would love it.. until I drove it. Just not my cup of tea, it turns out. I prefer my cars refined.

      • 0 avatar
        truffle_shuffle_steer

        eh… I could care less about refined… my favorite car to drive was a 72 F-100 I had in highschool… $1100 bucks and it came with the o-so-sweet sounding 302. It had super low gears, three on the tree and no tires at all. It should have come with windshield wipers on the side windows the way I drove it… sold it to pay for a laptop when I went to college- worst decision ever.

    • 0 avatar
      jmo

      Not to burst your bubble, but wasn’t the A6 2.7T rated the least reliable car sold in America?*

      * That have been the 2001 not the 2004 but still….

      • 0 avatar
        truffle_shuffle_steer

        yea but I figure after seven years all the major stuff has already broken and been fixed right… right? right?

        I do most of my own mantainence so it should be ok… right?

        Plus it’s the ‘S line’… I heard on some forum that they’re way more reliable than the normal ones anyway so I’m fine…

        And this is how panter lovers are born…

      • 0 avatar
        jmo

        And this is how panter lovers are born…

        That, and it’s how brand new $23K Honda Accord EX /Camry SE buyers are born.

        And honestly, my concern would be that as a newly minted professional, there is a limit to how many times you can be late to work because you haven’t quite been able to track down that electrical gremlin.

      • 0 avatar
        ExPatBrit

        If he can DIY, that Audi will be no problem.

        We have had Audis for 15 years or so, buy a Vag.com and an official Bentley pubs manual and it’s cake.

        The best internet forum support is for Audis, VW and BMWs. Forum support for Toyota, Honda is sketchy as the average owner knows nothing. Lexus forum support is actually reasonable.

        The cost of maintaining our Acura, Lexus, Toyota an Audis has been very similar . My A4 was sold at 168.000 miles and cost less than $250 in maintenance per year.

      • 0 avatar
        jmo

        The cost of maintaining our Acura, Lexus, Toyota an Audis has been very similar .

        Then you sir, are a statistical aberration.

      • 0 avatar
        ExPatBrit

        “Then you sir, are a statistical aberration.”

        The caveat was “if you can DIY”. If you are going thru the dealer no way.

        This is a big equalizer. The parts prices are similar, the level of knowledge on the German car forums is much greater. The diagnostic tools available are much better.

        Conversely the Honda and Toyota forums are filled with people doing very rather questionable things to their vehicles. Very few adults in the room.

  • avatar
    truffle_shuffle_steer

    and I can’t spell worth a damn…

    • 0 avatar
      th009

      Enough to make sense to the rest of us. (Though you might want to write “a lot” rather than “allot”.)

      At $13K your risk is limited — and there are people on the audifans mailing lists with 200K+ miles on the original 2.7T turbos. Enjoy your 2.7T, as long as you’re happy with it you can ignore what anyone else says!

  • avatar
    eldard

    Um, that’s just the Amerikan way, silly! :)

  • avatar
    johnhowington

    to illustrate what steven lang has been preaching: i purchased a 2010 kia soul plus for $15.5k in june 2010. in early september 2011, i sold it to a dealership for $13.4k. using basic math, that is only a 13% depreciation, not bad for 13k miles driven and it averaged about $180 a month. I turned around and now am commuting in a 98 accord which rides like a lovely couch on air, and pocketed quite a bit of cash.

  • avatar
    Steven Lang

    If this makes someone happy…. then why not?

    It doesn’t make any economic sense. But perhaps BMW may find a few thousand students who aren’t indebted and have good jobs.

    As an aside, I would love to see the small print on the contract for this ‘deal’.

  • avatar

    One of my clients graduated from College with $35,000 in debt and had 540 fico scores and was able to get a $29,000 loan for a car at 22% INTEREST HAHAHAHAHAHAHA. That’s like a goddamned Macy’s credit card.

    I did my best to talk my friend out of trying to buy a CLS500 cause he really thinks he can afford one making less than $50,000 a year, even though these crap dealerships would sell him one for like $18,000. I tell ya, credit risks are HILARIOUS.

    Ultimately, he realized he couldn’t afford it when he took my advice and called Insurance and they told him his insurance would be over $500 a month.

  • avatar
    Xeranar

    This is serious groupthink trending. The autoblog that this crowd draws are naturally more inclined to buy cheaper, older, cars. So while I concur this deal with BMW is bad news a large chunk of STEM graduates are walking out the door making 50K+. I have a friend getting ready to graduate with her MS in psych and places are killing to hire her at 60K and up. The jobs for skilled players are out there and need to be filled. The heyday of BMW though has passed, the switch in Britain from Mondeo to BMW just as the switch from Camry to BMW in the US is done. We simply can’t afford to buy 3-series cars like we used to.

    That being said, a good BMW brand new really isn’t out of the price range of a kid who landed in a 40-60K job who went to 4 years of a regular state college or commuted to a more expensive school. Seriously, I walked out of undergrad owing less than 20K and I borrowed for 4 years.

  • avatar
    AJ

    My advice to any college grad is to buy a new or nearly new Civic (or a similar car) for cheap, reliable transportation to work and for play.

    Then work on getting those student loans paid off early, get a house, work on investments and the rest of live’s expenses. Later you can get that car you’ve always wanted and it will be a nice reward. Debt just sucks… making those payments and worrying about it. Personally my debt (including a mortgage) is about 10% of my income, and that is with owning three nice vehicles.

    • 0 avatar
      chaparral

      The older Civics are far, far better cars than the new ones. You could have a “primary” 90-97 Miata and a “backup” 88-00 Civic for much less than a nearly new Civic, and the reliability of either would be similar to the new car – and the chances of both being out of action on the same day are remote.

  • avatar
    BMWfan

    I don’t think the credit card companies are allowed to park themselves on campus anymore and pitch credit cards to the naive, so BMW has stepped in to fill the void. God help any student that falls for this.


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