Blog

Short blog posts, journal entries, and random thoughts. Topics include a mix of personal and the world at large.

Waning enthusiasm

I guess gas prices (in the San Francisco Bay Area) is just going to stay in the five dollars per gallon threshold? We’re never going to see the number 3 again in front of the decimal point are we? Unless of course we move to other parts of the country where not only do they have cheaper gas than California, but they also have higher octane! (93 versus 91.) If I’m getting reamed in the butt on petrol price, at least give me the best gasoline possible.

It’s a good thing then that I’ve only driven 4,000 miles since the previous September. Paying over $70 to fill up the BMW M2 is so not the business. As much as I like driving, the cost of gas adds up very quickly. At least that is something I can control. The higher insurance premiums that we all received in our last renewals? Nothing I can do about that.

Perhaps my car enthusiasm is waning? I don’t know. I took the M2 in to the dealership for service last week, and I keep thinking what a hassle it is. Even though I’m not removing a single bolt myself, it’s still time out of my day to drive it to the dealership (on the other side of the city). Imagine if I didn’t own a car at all - how much simpler it would be. No gas price shocks, no insurance premiums, no maintenance costs, no worries about parking it somewhere and risking some asshole damaging the car.

Of course, it’s not tenable to not have a car. I rely too much on Costco trips to fight the ongoing inflation. But I’m thinking maybe I don’t need to own a high-strung sports car. It would be cheaper and less stressful to instead own a car an old man would drive. Something boring, something dead nuts reliable. That can only mean one thing: a Toyota.

Change is the only constant, right? I’ve like cars since I was a kid. Who knows, maybe that enthusiasm does come to an end.

No Porsche for broke boys

Porsche announced today mid-cycle updates to the 992-generation 911 (992.1). My first reaction was: Jesus Christ, a base poverty-spec Carerra starts at $120,000 now?! That is not a lot of car for a crap ton of money. And that price is before you check any of the hundred of boxes on the options list. You want your 992.2 911 in traditional Guards Red color? That’s will cost $1,800 extra, whereas it was an no cost option in the 992.1. Kind of blasphemous.

Porsche seems to be evolving into a Ferrari-like way of doing business: charging extravagantly for its cars - because it can. The demand for its sports cars remains insatiable, so why not raise pricing across its lineup? Heck, the special edition 911s - the ones enthusiasts ejaculate over - are all at Ferrari level pricing anyways, after the dealership tacks on $150,000 of additional markup.

Can’t hate the player, nor can I hate the game. Dealerships charge markups because someone out there is willing to pay. Us broke boys can’t be mad that we don’t got (or unwilling to spend) the money.

New Porsche sports cars are for the wealthy car enthusiasts now. No car guy making middle-class income should be throwing down $120,000 (at least) for a new 911 (or any six-figure car). That’s not a value judgement, it’s just math. I know auto financing can stretch into seven or eight years these days, but one look at an amortization table should scare anyone off. A $120,000 car, putting a 10% downpayment, for an 84 months loan at 5.99% will equate to over $27,000 of interest alone.

You can buy a brand-new Toyota Corolla with that money.

Can you though?

As a car enthusiast of over two decades, I am extremely familiar with stretching our dollars in order to buy cars. People spend money on eating out, we spend it on cars. If I weren’t a car enthusiast with a penchant for switching (brand-new) rides every three years, I would have immensely more wealth in investment accounts right now.

Obviously, they don’t give out medals for having the most money going to the grave. In this life you got to spend your money on something. It’s all about balance.

What my brother is planning to do is very far off balance. He’s put in an order for a car that is three times his annual income. Fair enough: he’s been saving diligently for as big a downpayment as possible. And apparently, with “exotic” cars, there exist banking services that would finance them for far longer terms than the typical mainstream vehicle. That is how my brother plan to “afford” this supposedly incoming car.

I’m sure the man-maths are working overtime to justify this move. However, the mistake is trusting the numbers on paper are static. Just look at recent inflation: gas, insurance, and maintenance costs have increased dramatically. The monthly fixed costs seem to be going ever higher. I guess my brother can save on gas by not driving the car, but then… what the heck is the point?

Then there’s the variable costs, with life being the variable. Pinching every possible penny to afford a car means any surprises down the proverbial road - and there’s always going to be surprises - will put my brother into the negative immediately. Can he afford an unscheduled wheel and tire replacement (unfortunate encounter with a pothole, let’s say) when he can barely afford the monthly payments? The only way the math is going to work is if life goes absolutely perfect. That’s simply not possible.

I’ve told my brother all of this, of course. Hopefully it’s enough to steer him from an enormous financial albatross.

The math is not math-ing

The most dangerous time for a car enthusiast, is when they are about to pay off their car. No more car loan debt means that money is freed up for something else: another car, naturally. The mind wanders at the possibilities. Perhaps it’s time to buy a car with a drivetrain layout you’ve never had before. Or perhaps it’s to re-purchase a car you shouldn’t have ever sold (thank goodness I cannot comfortably afford to buy another Porsche 911 GT3).

If there’s money in the bank account, you have to spend it. Isn’t that the American way? This entire economic house of cards is dependent on people’s continuous, often times reckless, spending.

My 2021 BMW M2 Competition will be paid of in a few months. And boy is the itch to buy another car itching intensely as that date draws nearer. I’m not being irresponsible! It will be the same money that would have gone to the M2 each month! It’s very easy to rationalize to yourself any purchase. The only reason I don’t have a mortgage is because the banks wouldn’t lend me the money.

But, as I like to say since last year: “Not in this economy!” Some people think that because they can afford the monthly car payment, they can afford the car. Don’t be like those people. We have to take in account the total operating cost. That means insurance, gas, and maintenance. And unless you’ve been living under a rock, all three of those things have gone up a lot in recent years thanks to inflation.

Never mind the fact that new cars have gotten rightly expensive. (Average transaction price in America is $47,338 as of this January.) High interest rates also means that monthly payment will be up as well. It’s really not a good time to be buying a second car, taking on tens of thousands of debt for another five years. I am going to keep telling myself that this entire 2024.

Man maths

10 days into the new year - have I already failed in the mission for austerity? Readers of this blog knows I am on the hunt for a new Honda Civic Type R. That means adding another car to the one I already have - a not-so-cheap to own BMW M2. Obviously that’s going to be quite a chunk of additional borrowing, and an increase in ancillary costs such as gas and insurance.

That is, if a dealership would even sell me a Civic Type R for a reasonable price.

Us car guys like to perform what we call “man maths”: a euphemism for convincing ourselves that we can overextend the budget to afford a certain car (or more). So I did my due diligence on the plan to buy the Civic. And what do you know: I can afford to have a second car, though I wouldn’t classify it was comfortable. I would essentially be “car poor”, which for a car enthusiast is probably not the craziest thing. What’s the meaning of life but to find the one passion and pour everything into it?

At least I won’t be in the negative, so to speak. I’ll just owe a bank a lot of money.

Alas, my Asian upbringing is convincing me otherwise. Buying the Type R would remove any cushion I have for other things. As of right now I would rather build up that buffer instead of immediately dropping another bag of money. This after a 2022 of somewhat heavy spending; I really need to bump up my monetary reserves. The second car will have to wait. It can still happen, just not right at this moment.

I think patience here is going to serve me well.

The opinion of others

Finally - some rain!

Coming out of the shower last night and preparing for bed, I heard the sweet tapping of precipitation on the window panes. It seems we haven’t had rain all year - and we’re deep into our typical rainy season, so the cleanse is incredibly welcomed. Free car wash, everybody! It’s also blooming season, so there’s a ton of pollen blowing around. The exterior of my BMW M2 is an absolute mess. I’ll check later if it rained enough last night to sheet the dirt off.

The blooming cherry and plum blossom trees in the neighborhood sure are lovely. Only one week out of the whole year do we get to enjoy their stunning gifts. Afterwards, the dead petals get blown away, many of which land right on my car.

It’s a reminder just how much I don’t drive the M2. It’s always fascinating to see the week’s worth of dust accumulation on the windshield when I do use the car on the weekends. If I were a strictly rational person, I would have traded the BMW for something far less expensive to insure and own. But car enthusiasm is never rational. Heck, car buying in general is not purely logical. That’s why I seldom give advice to people on what to buy, because they’ll inevitably purchase what their heart is already set on. It doesn’t matter that car is objectively worse than I would recommend.

I wouldn’t say I’m too emotionally attached to the M2. Admittedly, it is nice to have a cool car that stands out amongst a sea of SUVs. It provides a sense of smugness. It’s not quite that rich guy in a Lamborghini, but it’s similar. A good portion of car enthusiasm is about peacocking, and buying a car for the sake of impressing other people. We shouldn’t care about the opinion of others, but we do it anyways. Look at what I have! This expensive piece of machinery is an outside representation of me.

This is why I can’t swap the M2 for a more economical car. I love the power, and everything outwardly that BMW M cars represent. Though I do use the turn signals when changing lanes…

No driving for old me

These days I am driving my BMW M2 so infrequently that I’ve been entertaining thoughts of selling it. It’s rather irresponsible to keep such an expensive car around - plus the relatively high cost to insure it - only to have it sit outside on the curb most of the time (looking mighty pretty, I have to say). I don’t think I can go car-less, but switching to another that’s far less costly to purchase and own would be most financially ideal.

Not ideal for my car enthusiast heart, however. The push and pull between my love of cars and financial responsibility have been an ongoing struggle since my very first turn of the steering wheel. This “hobby” of ours is undoubtedly expensive, and our exravagent spending on cars isn’t suppose to be rational. Heck, car buying in general isn’t rational. If everybody bought only the right car for their purposes, we’d all be driving small, compact SUVs made by Japanese manufacturers.

Toyota is going to sell boatloads of the Corolla Cross.

Of course, cars are so much more than just mere transportation, even for those who aren’t the enthusiastic type. It’s an extension of our personality, a representation of ideals, for better or worse. Manufacturers are great at attacking those points with marketing. Everyone have notions of what a typical BMW driver is (again, for better or worse), same with a Toyota Prius driver. The latter of whom is probably hogging up the right-lane going way too slowly.

Must you own a cool car to be a car enthusiast? Even if all it does is just sit? These days I’m really pondering on those questions. I’ll certainly miss it greatly if I were to sell the M2, which is ultimately why I haven’t yet done it. Oh and the fact I’d be taking a bath on depreciation. Sunk cost fallacy is real and immense.