Can You Afford Another BMW? Answer These 7 Questions

If you’re itching for another Bimmer, you’re not alone — the only question now is if you can afford it. As you already know, you also need to account for rising gas prices and auto insurance premiums when calculating the value of a second luxury vehicle.

The cost of living has been on the rise and everyone is feeling the squeeze, so it’s natural to want to assess your financial preparedness before going through with the purchase. Answering these questions can help provide clarity.

1. Do I Need it?

The only thing better than owning one BMW is having two, but do you really need another car? For some families, owning a second vehicle is a necessity and for others, it’s a luxury. Ultimately, it comes down to why you’re considering it in the first place.

Is it because your current vehicle no longer meets your needs regarding functionality, space or features? Will another BMW address any specific limitations or requirements in the current car?

2. What’s My Current Financial Situation Like?

If you’ve got the cash to buy a BMW, just get it outright. However, if you’re looking at financing with an auto loan, it’s time to review your finances. Experts say a car loan repayment should not exceed 15% of your monthly income, but the requirements might be more stringent, especially if you’re still making repayments on the first car.

Consider your existing financial obligations, such as mortgage payments, utilities, insurance premiums and other recurring expenses. Can you pay for the BMW and still keep up with these? Will you still have enough to cover emergencies without dipping into your regular budget? It’s essential to have a safety net in place before committing to a new luxury car purchase.

3. How Much Car Can I Afford?

The quickest way to answer this question is to use an auto loan calculator. Use the tool to calculate how much you can afford based on set parameters like the down payment, loan term and highest monthly payment you can make.

Everything is interconnected, so your specific inputs will impact the end result. For instance, a higher down payment means a lower loan amount and a longer loan term typically means a higher interest rate. Adjusting variables allows you to compare different loan scenarios and choose the most suitable option for your budget.

The calculated amount includes additional charges like taxes and documentation fees. However, it’s not an official guarantee you’ll qualify for the loan or be approved for that specific amount.

4. Is This the Best Time to Get Another Vehicle?

Even if you can afford another BMW, you should still consider if the timing is right. Car prices tend to fluctuate and you could save a ton of money just by buying during more favorable periods. Generally, October, November and December are the best months to purchase a vehicle, as auto retail prices tend to be more negotiable.

5. Am I Buying a Regular BMW or an EV?

Electric vehicles are all the rage now and you’ll find no shortage of BMW options. Around 15% of the 2.5 million units sold in 2023 were EVs.

BMW’s electric cars boast the same superior performance and sleek design as their fuel-powered counterparts. They’re also equipped with innovative features to address the usual limitations of EVs, such as driving range and charging time. For instance, the BMW i5 eDrive40 has an electric range of 498–582 kilometers and a DC charging time of 30 minutes.

Of course, you can expect to pay more for an EV. At the same time, several rebates and incentives can offset the cost, so feel free to explore your options.

6. Does It Align With My Long-Term Financial Goals?

You might be able to afford it now, but will owning another BMW fit your long-term financial objectives? Consider whether the purchase impacts other targets, such as saving for retirement, purchasing a home or family-related expenses. Remember — balancing luxury desires with prudence is the key to sustaining financial health.

7. Will I Get it New or Used?

If budget is an issue, consider getting a second-hand Bimmer. BMWs are notorious for their five-year depreciation rates, typically above 50% compared to other vehicle brands. However, that can be a good thing if you’re looking to buy a used car. You already know what it takes to keep a BMW running smoothly, so maintenance is less of a concern.