Peter, I agree. The most I have paid for a car is $45,000 AUD and generally don't borrow to buy a car. My view is if I can't afford to buy it then don't, unlike a house that generally is an appreciating asset that I am happy to borrow money for a car is generally a depreciating asset. Probably the reason I am doubting I will get a Morgan, I would want to save up rather than borrow as it is a luxury item and saving up that much without SWAMBO thinking of other ways of spending it is proving to be hard.
I think a lot of the expensive cars I see around are leased, the lease companies do nice presentations showing the more expensive car you buy the better your tax savings are. But in my view with the FBT rate of 20% you want to make sure the car is less than 5 times your yearly running costs, otherwise the tax benefits are gone even if they appear to be there on the lease companies quote. Note you don't pay FBT on the lease because you pay something else that is taken out before tax and equals the FBT amount but is used towards the running costs. So that means 20% of the value of the car is used for running costs after tax and the remainder is before tax which is where the savings are. So to get the best tax savings you want the cheapest car that is the most expensive to maintain. Anyway either as you say there are a lot of very rich people with more money than they know what to do with or a lot of people who lease cars thinking they are saving a fortune but they don't actually understand how it works so just believe the sales man and get upsold.
