Income/Finances needed to justify Emira purchase?

[neiru37]

Life is short and felt like if I cancel my order, I had a feeling I will never have the same opportunity again

This was me, especially when Tom at Boardwalk told me I got the last FE1 allocation at their dealership so if I were to give up my allocation I would have also given up that ~10k MSRP discount.

 

[Aero]

@LuckysDad @K_Squared @Aero @Rupes @scc.131.fe @chatman @Lotustoronto @cyanmauve

I truly appreciate the advice you guys provided. Thank you for commenting.

100K cars seem so common in my city but I want to be financially smart if/when I do get there.

I will make sure to pay off mortgage, and be able to buy in cash. Unfortunately that means I'll have to put the Emira dream in a box for 8-10 years. Hopefully Lotus is still producing them for years to come!

Maybe you should start saving a big amount into a dedicated account every month that would be your Emira payment (or as much as you can) for a year and see how comfortable your finances are. See where you are cash wise. If you're half way there or so and can sell your fun car the used Emira market may be down some and be within range. You might be close at that point and not be making as risky decision. Might also be a year out if you order a new one from that point and project your savings to how much you'll have by time it comes in.

 

[brainf18]

I have always considered myself very financially disciplined but I have completely fell in love with the Emira. I have never wanted a car more in my life.

I am wondering what kind of financial situation people are in to justify a 6 figure car. How do you justify spending that much $ to your partner?

I'm curious if I am close to the typical situation of an owner or would I be making a horrible financial decision by purchasing one?

For context:
I'm 30 years old.
I have a mortgage of $400,000
Household income of $190,000 CAD ($140K USD)
No debt besides mortgage.
Never had a car payment before.
Don't have a business that would allow me to write off the payments.
Already own a very fun car.

I know it is completely irrational decision but I'm so captivated by this car. Would I be dumb to spend that kind of money before paying off my mortgage?

Appreciate any advice.

K-Squared pretty much nailed it. But I'll pile on since I have fiduciary background...Toys should always be purchased with cash and NEVER financed unless interest rates are below 4%, which they are not. Luxury purchases can not impact any other facet of long term investment planning or affect day to day living expenses or revenue. Lastly if you're investment portfolio isn't increasing at least 1-2X the purchase price annually of the item (in this case an Emira) given average rates of return (6-8%) you should NOT buy it. Some quick math...Given an estimated 8% ROI for a given portfolio, you'd need approximately $1.4M and 2.8M working for you before purchasing a depreciating asset like an Emira. This means if rates of return remain relatively constant, it will take your portfolio 6-12 months to "absorb" the cost of the purchase before growing principle again.

I know this might seem complicated...but the time value of money is logarithmic given compounding interest curves. Put simply the longer you leave your money invested and working for you the quicker it grows. But what good is money if you can't spend it right? So its a balance. The 6-12 month rule for portfolio "absorption" of a "luxury" purchase strikes a good balance between saving for tomorrow and living for today. Hope that helps...No charge

 

[Nellie]

Dam, some people put a lot of thought into buying their Emira/cars

Like all my toy's I wanted it, could afford it so I bought it, deprecation is the downside to buying almost any car so I ignore it. In my head I am not making a financial investment decision but an acceptable expense that I can live with.

This is the first purchase I have financed in many years but is the only finance I have

The car puts more smiles on my face than the money I have in the bank

 

[brainf18]

Dam, some people put a lot of thought into buying their Emira/cars

Like all my toy's I wanted it, could afford it so I bought it, deprecation is the downside to buying almost any car so I ignore it. In my head I am not making a financial investment decision but an acceptable expense that I can live with.

This is the first purchase I have financed in many years but is the only finance I have

The car puts more smiles on my face than the money I have in the bank

Advice is only valuable when one choses to heed it, or choses ignore it. Only time will tell if the person deciding made the correct choice.

 

[308tr6]

When I was quite young I was walking around a Porsche dealership (and a rather obvious tire kicker only) but the salesman was very kind to me and showed me around. When I stated the obvious (that there was no way I could buy one of these cars) - he smiled and said:
There are 2 kinds of people that buy fancy sports cars. "Those that can afford them, and those that can't."

 

[John777]

K-Squared pretty much nailed it. But I'll pile on since I have fiduciary background...Toys should always be purchased with cash and NEVER financed unless interest rates are below 4%, which they are not. Luxury purchases can not impact any other facet of long term investment planning or affect day to day living expenses or revenue. Lastly if you're investment portfolio isn't increasing at least 1-2X the purchase price annually of the item (in this case an Emira) given average rates of return (6-8%) you should NOT buy it. Some quick math...Given an estimated 8% ROI for a given portfolio, you'd need approximately $1.4M and 2.8M working for you before purchasing a depreciating asset like an Emira. This means if rates of return remain relatively constant, it will take your portfolio 6-12 months to "absorb" the cost of the purchase before growing principle again.

I know this might seem complicated...but the time value of money is logarithmic given compounding interest curves. Put simply the longer you leave your money invested and working for you the quicker it grows. But what good is money if you can't spend it right? So its a balance. The 6-12 month rule for portfolio "absorption" of a "luxury" purchase strikes a good balance between saving for tomorrow and living for today. Hope that helps...No charge

So what's the working capital for a Toyota Camry? 750k lol..

Average Joe Public like me better wait 10 years for the used Emira Market then. Lucky if I can afford a used Buick at this point.
I have 1.5 million in mortgaes and recently retired at 48.

I'm still buying it. 90% of the public can't pay $150k cad cash. Only the 1% club. Not like I'm trying to buy a Ferrari.

 

[EZcheezy]

I dont think you can ever justify such a purchase. theres no way i am going to rationalize this as being a smart thing to do. its not, never will. absolutely worth it tho! I have never been so excited for something!

for me, the way I cope with this crazy decision i made at 31 is:
1. zero debt
2. paid in cash

 

[brainf18]

So what's the working capital for a Toyota Camry? 750k lol..

Average Joe Public like me better wait 10 years for the used Emira Market then. Lucky if I can afford a used Buick at this point.
I have 1.5 million in mortgaes and recently retired at 48.

I'm still buying it. 90% of the public can't pay $150k cad cash. Only the 1% club. Not like I'm trying to buy a Ferrari.

Basic transportation is not a "luxury" item. Completely different set of rules for required purchases that must be made to conduct day to day business. This is the end of my free advice....

 

[RoryBellows]

I cant afford a bitcoin Lambo but I can get a bitcoin Lotus. In all honesty my financial justification for this comes from a combo of crypto and selling off my current garage queen (07 Solstice GXP). Ill still have a loan for around 40k which is within my comfort zone. Of course if crypto takes off maybe Ill be able to just buy outright.

 

[Vampyre]

My rule is easy,
You are not guaranteed tomorrow.

 

[Nova]

Lets keep in mind that the vast majority of cars bought/sold in the US are used cars: used cars outsells new cars by a 2-3x multiple in the US. The median HHI of a brand new Toyota Camry buyer is going to be higher than the national median HHI. Here's a JD Powers article from 2018 showing the median household income of a Camry buyer was $86,833, which is equivalent to $108,552.14 in 2024 dollars.

https://www.jdpower.com/cars/expert-reviews/powersteering-2018-toyota-camry-review

For most of Joe Public, a used Buick is indeed representative of what they are looking at. Those that can buy an Emira with cash and have it be a responsible financial choice are indeed a very fortunate segment of the population.

 

[Medic518]

I can completely understand your love affair with the Emira. As for financial discipline, I had set the following rule for myself in buying a fun car:

1. I must be able to pay cash for it
2. It must not be more than a specific percentage of my net worth (which I will withhold for obvious reasons -- and this was just arbitrary anyways)
3. The purchase must not require that I sacrifice any of my important financial investments for my family's future.

The Emira met all of these for me. That being said, I'm sure plenty of people financed it when a financial advisor would've advised them otherwise, but then again, YOLO

100% - my exact thinking in making the decision, on Options 1 and 3, didn't really consider Option 2. Additionally, I took the opportunity during the delay(s) to put the Option 1 cash in a high return account to build above what was needed for any incidentals (beyond insurance, delivery/tag fees, etc..).

 

[MPD]

Lots of great advice here, some I agree with and some I don't. But that is what I like about the forum, you get lots of info to make a hopefully better informed decision. My input that is really only worth .02

When I was young, I blew alot of money on toys and took me years to right the ship. I didn't get my priorities in order until I was 30 and have been playing catch up since then.

As others mentioned, put your budget on 'paper' and see where the numbers come out. There isn't enough info provided to see where you land and making assumptions isn't valid. You might have a very low interest rate with low mortgage monthly, minimal household expenses, etc.

I like the only buy if you have cash but in my practice, I buy on credit when interest is less than 2.5. This has worked well for me to allow growing portfolio but also allow me to buy many nice vehicles that I own.

Yes life is short but don't throw caution to the wind. Run the numbers and make a decision based on data not emotion (as that will always win ) Given that interest rates for cars are around 5%, so unless you have excess cash after expenses and investments, you might be best served waiting until they go down or until you have a huge down payment .

 

[hagen111]

I bought cars all my life, with my own money. Looking back…would not do it again.
In the end…only get a mortgage.

What you can save everymonth invest it into assets like buying the index funds.

Later on in life you won’t regret it.

Simple…depreciation and interest payments on the Emira will set you back substantially in a way where the Emira investment in the end will be a big loss.

Sink 100000 in an Emira…50k will be the residue in 3-4 years.
By investing 100000 in the stockmarket, changes are high you will end up with 200000….4x times as much as your Emira investment.

And you live a long happy life!

 

[EspritGuy]

I bought cars all my life, with my own money. Looking back…would not do it again.
In the end…only get a mortgage.

What you can save everymonth invest it into assets like buying the index funds.

Later on in life you won’t regret it.

Simple…depreciation and interest payments on the Emira will set you back substantially in a way where the Emira investment in the end will be a big loss.

Sink 100000 in an Emira…50k will be the residue in 3-4 years.
By investing 100000 in the stockmarket, changes are high you will end up with 200000….4x times as much as your Emira investment.

And you live a long happy life!

For what it's worth, Lotus 36-month leases today are estimating 69 percent residual. During that period inflation is pushing purchase cost higher. Somewhere in this mix is a comfortable number one can live with.
The prospect of dying rich didn't resonate with me.

 

[eriegz]

Many of the responses in this thread got me thinking about a meme that I saw recently. Use your imagination to see how it might also apply to an Emira purchase.

 

[Rainier]

Retirement finance ...

 

[John777]

Basic transportation is not a "luxury" item. Completely different set of rules for required purchases that must be made to conduct day to day business. This is the end of my free advice....

Basic or Luxury .. still a cost. What you consider Luxury someone might consider basic. Open to interpretation like everything else.
I'm not a lawyer or broker but your example and math seems overly punctilious.

Thanks for the free advice though.

 

[John777]

I bought cars all my life, with my own money. Looking back…would not do it again.
In the end…only get a mortgage.

What you can save everymonth invest it into assets like buying the index funds.

Later on in life you won’t regret it.

Simple…depreciation and interest payments on the Emira will set you back substantially in a way where the Emira investment in the end will be a big loss.

Sink 100000 in an Emira…50k will be the residue in 3-4 years.
By investing 100000 in the stockmarket, changes are high you will end up with 200000….4x times as much as your Emira investment.

And you live a long happy life!

I bought cars all my life, with my own money. Looking back…would not do it again.
In the end…only get a mortgage.

What you can save everymonth invest it into assets like buying the index funds.

Later on in life you won’t regret it.

Simple…depreciation and interest payments on the Emira will set you back substantially in a way where the Emira investment in the end will be a big loss.

Sink 100000 in an Emira…50k will be the residue in 3-4 years.
By investing 100000 in the stockmarket, changes are high you will end up with 200000….4x times as much as your Emira investment.

And you live a long happy life!

I'm 50. So done investing been investing all my life. I retired at 48 this was supposed to be my retirement car.
You could also lose in the Stock market. I have 1.5 million in mortgages. lol.. I'm gonna take out a mortgage on my house that's paid for to buy the Emira. Call it a midlife crisis.. I've seen many friends/coworkers/family die recently around me. In my situation I can financially handle it. Life's to short sometimes you just gotta say f. it . Not like I'm buying a $300k Ferrari. Also there are many cars reaching $100k.. pickup trucks ,,suv's etc. They have mustangs $200k .. Jeep Wagoneer $100k to $160k cad.. anyways its getting to be a long list of vehicles over $100. I think the Emira is still a bargain considering all options.