The "300$/ mo. M3" is a complete myth

"themanwithsauce - has as many vehicles as job titles" (themanwithsauce)
08/03/2014 at 02:22 • Filed to: None

Simple math here. First of all let's take some raw data. !!!error: Indecipherable SUB-paragraph formatting!!! financed at 300 a month = 11 years of payments. That's absolutely ridiculous and no dealership will do it so let's now assume a 0% loan for 5 years and factor in a down payment. At 300$/month that's a down payment of over half what the sticker price is. So you could almost literally pay cash for cars like a fiesta ST or even a one year old FR-S or Focus ST or GTI or V6 mustang.

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Oh and we haven't gotten to my favorite part - INSURANCE. I call complete bullshit that you financed 40k and insured it for less than 300 a month without basically paying for the car outright. The M3 is classified in a league above cars like the V8 pony cars, but still slightly below the evo. For me, with NO POINTS, NO ACCIDENTS, and NO AT FAULTS OF ANYTHING EVER, I'm looking at about 450 a month. Consider that the insurance on an E90 M3 alone would cover the payment + insurance of my FiST. And you see why the M3 is very much a car that costs as much as it does. If I basically dropped my Fiesta ST's MSRP on that E90 M3 I would be paying 750 a month before anything else.

Oh what's that? The article assumes he sells it after 3 years? Wow, way to fucking clickbait while still being horribly wrong. First of all, you assume he sells it for the price you assign. Have fun with that. Secondly, you assume he sells it immediately. Every month that goes by that he doesn't sell it will raise that monthly fee. Third of all, let's revisit that timeline issue. Every month that goes by increases the chance for something out of warranty to go wrong and cost him more money. Your entire premise for the article is based on a massive pile of assumptions. Oh all of this is before insurance too. Which, in a state like michigan, will be in the 300-600$ range depending on age and points on license.

Jalopnik/Oppositelock.....THIS ARTICLE IS COMPLETE BULLSHIT. NO YOU CAN NOT MAGICALLY OWN A 40K CAR FOR 300$ MONTHLY PAYMENTS WITHOUT PAYING A FUCKING MASSIVE DOWN PAYMENT AND MAGICALLY FORGETTING ABOUT INSURANCE.

I will repost this later in the day for the afternoon crowd because graveyard is a bit empty.

DISCUSSION (40)

ygouvouvo > themanwithsauce - has as many vehicles as job titles
08/03/2014 at 02:26

Word is bond.

GhostZ > themanwithsauce - has as many vehicles as job titles
08/03/2014 at 02:27

But that's actually a realistic way of measuring the cost of owning a car, by taking depreciation into account. It's not perfect, but it's better than assuming that loans and leases are the way to measure the ownership cost.

The only way to make it, financially, more accurate is to take liquidity and risk into it.

In other words, yeah, it's clickbait, but the article's biggest sins aren't the ones you're addressing.

themanwithsauce - has as many vehicles as job titles > ygouvouvo
08/03/2014 at 02:27

Word.

themanwithsauce - has as many vehicles as job titles > GhostZ
08/03/2014 at 02:33

Then what are the article's biggest sins? Because the way I see it, assuming a set timeframe and sale price of a used car while ignoring a mandatory running cost and initial cost to own trump something like depreciation are pretty big. This article failed econ 101 let alone any of the more advanced courses in my book. And I am going based off of the title of "Yes, you can drive an E90 M3 for less than 300/mo" which I automatically assume ignores fuel and repair prices as those will vary based on driving styles. But I am, logically, making the assumption that that is your fixed costs for the product summed up in the announced "300$ payment".

GhostZ > themanwithsauce - has as many vehicles as job titles
08/03/2014 at 02:38

The biggest sin is saying "You" not "this guy" in the title, because it doesn't go on and explain how we as individuals could do that now, and what they are asking isn't possible to be replicated anymore because the market has shifted.

If the title said "This guy bought, drove, and sold an E90 M3 for $300 a month" Then yes, that would be a much more accurate title and would make much more sense.

The next biggest problem is not including repair bills. They might be wrong, it may not actually have cost anything more than the initial purchase price and insurance (plus fuel) to own. 3 years isn't long enough for major repairs usually.

Also, This is not a Jalopnik article. It was posted by a single person from Oppo, for his own blog and site. The only journalistic standards it needs to hit are it's own, and Jalopnik isn't really responsible for making sure user-created content is held to quality standards. It's held under the same microscope as your own rant, so bear that in mind.

DanZman > themanwithsauce - has as many vehicles as job titles
08/03/2014 at 02:48

Just curious... How old are you? Because your insurance rates seem crazy high. I bought my C6 z06 for my 26 birthday and I only pay about $225/mo. Thats regular use insurance, not collector car insurance. In fact it was cheaper to insure than the 350z I had before it.

themanwithsauce - has as many vehicles as job titles > GhostZ
08/03/2014 at 02:52

I see what you're saying and yes that would correct a lot of problems so long as they specified that was just the "monthly cash payment" and nothing else. I'm aware it's an Oppo article, but it was shared to the FP which is typically reserved for articles of significant quality and importance.

themanwithsauce - has as many vehicles as job titles > DanZman
08/03/2014 at 02:53

I am 25 in Michigan. Michigan is the key here. An EVO is upwards of 600$/mo depending on who you go with. M3s are crashed and ticketed fairly often so that's probably why they're worse than a V8 mustang or camaro or challenger which is about 250 to 300/mo for me. FOr comparison my FIesta ST is only 140/mo but a GTI would be 250/mo.

DanZman > themanwithsauce - has as many vehicles as job titles
08/03/2014 at 03:03

WOW thats crazy. I'm in AZ and I would never even think of paying that for insurance. I guess thats just another reason for me to never go to michigan. Also, I didnt mention it in my first comment but I completely agree with you. That other article was full of shit.

themanwithsauce - has as many vehicles as job titles > DanZman
08/03/2014 at 03:19

Lol, you have no idea. My best friend from college moved here after graduation. He had 3 cars to his name and couldn't figure out why everyone who paid their own insurance only had one, maybe 2 cars with actual coverage. Well it turns out his insurance for an FR-S, a 280Z, and an 80s 3-series was upwards of 500$/mo just to be able to drive them.

Meanwhile in Ohio it was like 150/mo. Or less.

DanZman > themanwithsauce - has as many vehicles as job titles
08/03/2014 at 03:23

your friend has good taste in cars, I hope he didnt have to sell them. Is the 280z an S30 or an S130?

themanwithsauce - has as many vehicles as job titles > DanZman
08/03/2014 at 03:25

S30. And he did have to sell the 3 series since the floorboards were rusting through an the guy he bought the car with as a joint project backed out almost immediately.

Arben72 > themanwithsauce - has as many vehicles as job titles
08/03/2014 at 04:24

My m3 is cheaper to insure then a v6 Camaro. It's really not that bad. The ridiculous cost is gas, because you'll love driving it so much, and you'll find every reason to go w.o.t.

E92M3 > themanwithsauce - has as many vehicles as job titles
08/03/2014 at 09:54

I'm 35 and pay $75 @ month to insure my 2011 M3 thru State Farm.

You're looking at the article wrong. It's based on what he paid for the car minus what the average price is for the same car today. Thats the depreciation, then divided by the number of months he's owned it. NOT what his monthly payment is.

My previous E46 M3 I paid $31k for, drove it 4 years, and sold it for $25k. $6k in depreciation in 4 years is hard to beat for this kind of car.

rayJoyal > themanwithsauce - has as many vehicles as job titles
08/03/2014 at 10:09

I bought, drove, and sold a 2009 Silverado for $200/month.
Owned it for 52 months.
Purchase price - sale price: $9500
Total maintenance: $700 (I do all my own work so that includes oil changes and the one thing that broke out of warranty.)
I didn't include insurance or fuel costs because it was replacing an old regular cab truck AND an old car, so my net cost for that portion was probably lower.

We replaced it with what the wife really wanted but couldn't afford at the time: a 2010 Avalanche. It's like having a crew cab and a long box truck at the same time.

DipodomysDeserti > themanwithsauce - has as many vehicles as job titles
08/03/2014 at 10:10

Those are insane insurance rates. I have full coverage with low deductibles including glass, medical, uninsured/under insured coverage, on a 335d, Abarth, and an old Loyale and I pay $170/month for all three cars.

Jayhawk Jake > themanwithsauce - has as many vehicles as job titles
08/03/2014 at 10:44

Where are you getting your insurance number?

I suppose I haven't tried to quote having just an M3, but I've never seen numbers that high. When I dreamed of a WRX in college I quoted one and came out to ~$175/mo as a 21 year old single male. When I entered a sweepstakes for a 2014 Stingray ($85000 value), I curiously quoted adding it to my insurance along with my Sonic: it went up from $90/mo to about $115/mo.

I'll go quote an E90 M3 and get back to you. EDIT: did a quote with progressive. 25 yr old single male with a college degree, clean record, did a voluntary accident prevention course recently (everyone should do this, no brainer): $137/mo for a 2008 M3 used as a primary car, $500 deductibles. No idea how you come up with $450 a month, if insurance is 3 times higher in Michigan than in Kansas you should move.

I rolled my eyes at the article because of financing alone. Unless you're leasing a new car on a low mileage lease you aren't paying for a $40,000 car with payments less than 300 a month, unless of course you paid enough down to pay cash for a cheaper new car.

trmoore09 > DanZman
08/03/2014 at 10:53

yea his rates are insane. Our coverage for our e90 m3 and s2000 was $1500/yr for both.

Jayhawk Jake > E92M3
08/03/2014 at 10:54

That's a really dumb way to look at it though, or at least the article should have been more clear that they were only talking about depreciation. It's not like it's that cheap to own the car, especially if you are making payments and consider insurance.

E92M3 > Jayhawk Jake
08/03/2014 at 10:59

It's not dumb considering a brand new Camry will depreciate more than that. The point is you can buy a nice barely used luxury car for the same cost of a new normal/cheap car.

trmoore09 > themanwithsauce - has as many vehicles as job titles
08/03/2014 at 11:01

The article never says his monthly payment was $300/MO. you made that assumption. The main point of this article is that if you play the depreciation game and win, you can drive a nice car for relatively cheap.

Jayhawk Jake > E92M3
08/03/2014 at 11:12

It's dumb because depreciation isn't the only cost of owning a vehicle, at least not without a disclaimer.

If you paid cash in full and didn't have any maintenance to do, fine. But saying 'you can own an M3 for less than $300 a month' is like saying you can live on Mac and Cheese for only $3 a week, if of course you ignore rent, utilities, etc...

E92M3 > Jayhawk Jake
08/03/2014 at 11:18

But depreciation is constant among everyone with the same car. Everything else is a variable. Insurance depends on your age, and record. If you like to do burnouts you'll buy more tires. If your commute is longer you'll use more gas. You can't include all of those. Otherwise you'd have an article titled "the cost to own ANY car varies on too many factors to accurately predict".

Jayhawk Jake > E92M3
08/03/2014 at 13:35

I just don't get why people care so much about it. Cars depreciate. Big whoop. When you buy a car you expect it to do so. Considering depreciation as the sole cost of the car is pointless IMO

Manwich - now Keto-Friendly > DanZman
08/03/2014 at 13:47

But even in lowest risk places, you're still looking at a minimum of $150/month.

With payments and insurance, you're already looking at $500/month.

Then there's fuel, maintenance and repairs to consider as well. And those three things are not 'nothing'. They typically make up for 50-60% of the total cost of owning a car in the long run.

DanZman > trmoore09
08/03/2014 at 14:16

thats really cheap! If you dont mind me asking, how old are you?

manofwar > themanwithsauce - has as many vehicles as job titles
08/03/2014 at 15:03

Dude go back and read the article again. $300/month is depreciation. $39,600 (what it cost him in 2011) - $30,000 (approximate value in 2014) divide that by 36 months is $266/month. The car will easily sell for $30k!

IT'S THE MATH, STUPID! :-)

The article specifically says it's "not counting regular maintenance like tire replacement, oil changes etc." Any car will have regular maintenance, and yes the M3 replacement parts cost more, but that's not the point of the article.

manofwar > themanwithsauce - has as many vehicles as job titles
08/03/2014 at 15:03

IT'S THE MATH, STUPID! :-)

manofwar > themanwithsauce - has as many vehicles as job titles
08/03/2014 at 15:03

IT'S THE MATH, STUPID! :-)

E92M3 > Jayhawk Jake
08/03/2014 at 15:24

Because if you let someone else take the majority of the depreciation you save money. Money that can be used for other things. Some examples are vacations, trackdays, funding retirement, etc. That's like saying "Whats the big deal with a raise? Who cares about more money in their pocket?"

trmoore09 > DanZman
08/03/2014 at 15:29

26, but this was 2 years ago. So 24 at the time.

n54 & s38 > DanZman
08/03/2014 at 15:29

Yeah that seems really high to me as well.

Jayhawk Jake > E92M3
08/03/2014 at 16:24

That has nothing to do with the car once you own it.

The article wasn't about buying an M3 for some depreciated value, it was about the depreciation of the car once it's purchased. At that point who cares? You own the car. If you like it enough buy it new and take the depreciation because you know it's coming.

If resale value is a priority, then your priorities are out of whack.

Spasoje > trmoore09
08/03/2014 at 16:34

That's like saying you're guaranteed to be a millionaire by going to Vegas.

E92M3 > Jayhawk Jake
08/03/2014 at 17:19

Yes every car depreciates, but you don't have to take the majority of it. There's very nice cars out there that are barely broken in at 40-45% discounts from MSRP. If you can buy a used M3 and drive if for 3 years and only lose $9000 in it's value why not do that over buying a new Sonic RS, and also losing $9000 in 3 years?

The original owner of my old M3 lost $45k to put only 14k miles on it. That's $3 A MILE (not counting consumables like gas and tires). I got 3 times the usage he did for less than a third of the cost.

GTRZILLAR32-Now saving for Godzilla and a condo > themanwithsauce - has as many vehicles as job titles
08/03/2014 at 17:27

I pay $290/mo on my loan and another $180/mo on insurance on my E46. The E90 seemed to be a bit of a stretch to me too.

Jayhawk Jake > E92M3
08/03/2014 at 17:30

I wouldn't buy an M3 because I don't like BMWs, and also an M3 =/= the practicality of a Sonic RS. I couldn't carry the stuff I need to carry in an M3.

I'm not losing $9000 in 3 years because it's not an investment. I bought a car. It's my car. If I sell it down the road, it'll sell for whatever it's worth. I don't lose money on it, I own it, drive it, then sell it in the future.

My point is I don't look at it like that because it's a silly way to look at it. The cost of owning the car is the money I spend while I have it, not the money I lose when I sell it. Just like the cost of buying a refrigerator is the cost of the refrigerator, not how much you can get for it when it's time to upgrade.

E92M3 > Jayhawk Jake
08/03/2014 at 19:22

I will argue your measurement is a silly way for figuring the cost to own. Lets say I bought a Camry for $27k cash drove it for 2 years and sold it for $18k. My insurance was only $40 a month and I only did regular oil changes. Using your math it only cost me $960 for insurance plus say $3000 for gas and 3 oil changes. So with your math it only cost me $4100?

Depreciation is a much more acurate measurement no matter how it was bought (financed or cash).

Jayhawk Jake > E92M3
08/03/2014 at 20:06

I'm saying the resale price is irrelevant. I don't get why people get their panties in a bunch about it.

If you want a car, buy it. End of discussion. Want to buy new? Buy new. Want to buy used? Buy used. Who cares? The FP article was just a dumb click bait headline trying to argue for buying used.

If you want to save money, you should buy used. If you want a new car buy a new car. Don't try to make people feel bad for buying new because after all every used car had to be bought new at some point

Roadster Man > themanwithsauce - has as many vehicles as job titles
08/03/2014 at 22:00

It's pretty obvious that they used crackhead math by comparing the depreciation of the car from the purchase date to now and then saying: "presto! he only paid $300/month!"

Like you said: no mention of gas, insurance, repairs, maintenance, tires..... Anyone with half a brain will see it's clickbait bullshit.