He just got out of debt too, and is getting a personal loan @ 15% p.a to finance said car - no savings.
How do I prevent him from making a terrible mistake?
If your friend cannot be stopped getting a fast car, try to convince him at least to get Tesla which is faster than SLK and can be used as family car.
The bottom line is that he appears to be an impulsive type of person.
You could try rational, logical arguments and they probably won't work. You need to understand his motivations about who he wants to impress. "Quality of life" might refer to who he wants to impress and what he thinks the new car will reflect upon his image. You might try to make him see that this is not the best path towards that goal.
Is it really going to be a "terrible mistake" or a learning experience that he will look back upon as another adventure in folly.
As a SWE he might pay it off quickly and having scratched that itch. It might be the motivation he needs to excel down the track or a passing fad. As a good friend you probably will be there to help him pick up the pieces if it comes to that.