Sunday Drive?

"Jimmy Tango" (jimcalliu) 08/10/2014 at 18:22 • Filed to: None

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Actually this one is more practical than any Sunday Drive so it probably doesn't qualify. My question is, where is the catch?

TL;DR: E90 328xi for sell for less than 26k, yet only have less than 5k on the meter.

http://www.carmax.com/enus/view-car/…

I have an alert search setup for last year (2011) E90 as I am looking for a new ride. CPO locally are more expensive than CarMax. I basically want 4k for tax buffer and possibly MaxCare so that my used car risk can be mitigated some. My previous e46 coupe had a tombstone epitaphs as "great car I love to fix", while all said and done the depreciation was less than 3k for 3 years, I spend more than 6k on shop visit and DIY repair.

N52B30 engine on this 2011 isn't as prone to !!!error: Indecipherable SUB-paragraph formatting!!! , and you get the naturally aspirated straight six if you are a fan like me. While some BMW enthusiast critics about current electronic assist numb handling, you can enjoy the last hydraulic application on 3 series unless you like current X1.

So why am I asking if there is a catch on this seemly reasonable price used BMW? It only has 5k miles on it, while this is good for low mileage, it's almost too low that it rings bell.

Any takers?

GhostZ > Jimmy Tango 08/10/2014 at 18:27

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Carmax warranty should protect yourself from most problems, I would think.

That aside, it will still depreciate like a rock. You'll be out more than 50% of the purchase price in 4 years. That would be my biggest concern. That would outweight repair costs it wouldn't incur.

heliochrome85 > Jimmy Tango 08/10/2014 at 18:32

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Likely a loaner car. Esp given the equipment and general lack of options.

heliochrome85 > Jimmy Tango 08/10/2014 at 18:33

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You can get a 2013 328i with similar miles for slightly more.

heliochrome85 > heliochrome85 08/10/2014 at 18:33

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BMW CPO that is. They are going for 30-32k here.

AM3R > Jimmy Tango 08/10/2014 at 18:40

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I drive an E90 328i. I haven't heard of any HPFP issues. N52 is a very robust and reliable engine. That low price is probably due to the lack of options, like Heliochrome said it was probably a loaner or maybe even a rental.

Arben72 > AM3R 08/10/2014 at 18:55

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That's because the 328 doesn't have a hpfp. If it wasn't a rental/loaner, the extended warranty is a waste as they're reliable cars even with the gm auto.

Jimmy Tango > heliochrome85 08/10/2014 at 18:58

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Really? I guess it never appear in my autotrader/carmax alert. I'd be interested if it's not in east of Rockies.

Jimmy Tango > heliochrome85 08/10/2014 at 18:59

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yeah that's a lot more though. this one is 26k and anything I buy is prorated with 10% tax.

AM3R > Arben72 08/10/2014 at 19:01

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Exactly, no turbo=no HPFP.

It really is a reliable car, no need for a warranty at all imho. With only 5k on the car, I strongly doubt you'd even have a problem.

Jimmy Tango > GhostZ 08/10/2014 at 19:05

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Well, my previous car is a 04 e46 330ci. When I bought it, it was a little over 7 years old. Like you said, not much drop in depreciation but repair cost basically replace what depreciation would be from my pocket. I see it as a cost of owning BMW. FWIW, the depreciation curve is still better than Merc or Audi.

While this car will be reliable for the first 5 years, I imagine all the plastic and electronic thingy are ready to bust in the future. I studied my e46 pretty thoroughly, and from what I know the E90 and F30 now are even more of those plastic and electronic thingy. I have a theory that car makers are aiming for cars to have a shorter life cycle by design. Hence I want my next car to be a bit newer, despite the depreciation game I will be losing.

Jimmy Tango > heliochrome85 08/10/2014 at 19:07

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Yeah which is why I am passing this one as I only tolerate E90 with M-Sport package. Otherwise I don't really like their appeal.

Tom McParland > Jimmy Tango 08/10/2014 at 19:41

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As others have said probably a demo...could be legit.

GhostZ > Jimmy Tango 08/11/2014 at 06:31

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I have a theory that car makers are aiming for cars to have a shorter life cycle by design.

They completely are.

You can avoid some of the depreciation by getting a more unique model. The sportier BMWs tend to hold their value better, like the 3-series coupes. I actually bet the last few years of 3-series coupes will hold their value much better than the sedans because of the model split. In 10 years they will have that "Hey, is that a 4 series?" "Nope, it was the last year of the 3 series coupe!" vibe.

Personally, I'd find something that would be less comfortable but would appreciate in that same time period. One of the most finance-conscious guys I know (as in, the type would should drive a new C-class sedan every year) buys for himself a early-2000s Jaguar XJ-R. It's appreciated significantly since purchase, despite the fact that it's an older and by all means unreliable sedan, because it's still more reliable than a new car and was relatively rare.

Jimmy Tango > GhostZ 08/11/2014 at 11:30

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Does less comfortable means less practical? If so I'd love to get into that game. Unfortunately in order to satisfy backseat passenger I have moved from coupe lover to (almost) crossover speculator. I hate myself for it.

This weekend I finally shown enough 5 series that my wife feels like that would be a good idea. If the used car plan fell through I am still sticking with 4GC next spring.

Only if now I can find a 550i to be the next car I love to fix (with a extended warranty, of course.)

GhostZ > Jimmy Tango 08/11/2014 at 12:27

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Less comfortable does not mean less practical. I mean go for a reliable 4-seater coupe that isn't from a luxury brand. It will cost you a lot less in the long run, and you can use that money toward better things.

There are good 2-door coupes with plenty of back seat space (a 3 series coupe is a great example) and there are far better sedans out there if you're looking to avoid spending too much.

As for Crossovers, they only offer more cargo space over a sedan when you're carrying 4 passengers at all time. Otherwise, they actually have about the same. A hatchback gives you the same boost over a sedan for 4 passengers, but is less than both with less than 4 passengers.

Crossovers and Sedans break even with 3 passengers, slightly in the Sedan's favor. 2 Passengers, and the Sedan is the best choice every time for passengers.

A 4GC actually doesn't sound too bad.

Still, 550i or 4GC are going to burn you on depreciation. You can probably buy and drive an older (pre-2005) Bentley Continental for less money at the end of the day. If you are absolutely set on a post-2010 BMW then you should possibly look at leasing, which might save you money, though limit you on what you can do with the car in the long run.

You'd have to spend close to $30,000 on repairs and maintenance on a Continental GT before it becomes more expensive to own than a, say, a 2012 550i. Let me explain:

You can buy a 2005 Continental GT for around $62,000 with 30,000 miles on it. In 3 years, it will have likely appreciated by $10,000 to $72,000, assuming you put less than 55,000 total miles on it. Sell it, and your ownership cost is +10000. Your yearly insurance is likely around $1000, with 1 major service ($2500) and 3 10k services ($2000 total). Average fuel economy is 20mpg, and let's assume average fuel price of $4 a gallon.

-62,000 Purchase Price
-3000 Insurance for 3 years
-2500 Major Service
-3000 Minor Services
-5000 Total fuel cost (25000 miles / 20mpg * $4 a gallon)
+72000 resale price, +/- $5000
Final cost of ownership: - $3500, +/- $5000

Or you can buy a 2012 550i. Let's assume you purchase it for $50,000. In 3 years it will depreciate to $25,000 or less. Let's assume you put the same total miles on it (30000 to 55000). Yearly insurance is likely $800, 1 major service is likely around $1500, and 3 oil changes for a total of $500. 27mpg. The 550i has "condition based servicing" which means it's very difficult for you to expect when or if you have to service it, but you could get lucky and not need anything beyond oil changes for 3 years.

-50,000 Purchase Price
-2400 Insurance for 3 years
-1500 Major Service
-500 Minor Services
-3700 Total fuel cost (25000 miles / 27mpg * $4 a gallon)
+25000 resale price (this is much easier to predict, so no variance here)
Final cost of ownership: - $33100.

Now, this is an extreme example, but it shows how, in the long run, you can totally screw yourself on depreciation, paying the entire cost of another new car more than you need to for the same level of prestige, comfort, refinement, performance, etc.

The Continental GT would have to drop in price by $20,000 just to break even with the 550i, which while it can happen, is far less likely than that it stays around the same price or appreciates. There are other cars out there with the same properties. I am not advocating you go out and blow 62,000 on a Bentley continental . But do keep all of these costs in mind and watch the market more than your 'nickel and dime' costs.

Jimmy Tango > GhostZ 08/12/2014 at 15:59

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I want to buy you a beverage of your choice if you ever land foot on Emerald City! I don't use the car to commute so the miles could be less than 8k a year (my current car racked up grant total of 2k since June, including the trip I drove all the way from SF to Seattle, of course I am not taking this little Mazda 3 for roadtrip, more on that in a different post.)

But yeah, I serious see where you are going with this. I think currently the 4GC leasing make sense because:
1. I could do a European delivery which I want to do for long time. Check off Nürburgring on my bucket list is just a plus.

2. Less risk on car breaks down when you need it: my 330ci which reserved a special place in my mind, it broke down when my wife went into labor. That just crushing all the rosy image my wife may have toward an (older) used car. I love cars, but love and respect my wife much more. Not saying new cars won't break down, but it's not as risky than a 10yrs old car.

3. We are a growing family and it's realistic that 3 years down the road we could outgrow the gran coupe. We will get our turn to choose family car again. Although that does mean close to 20k down the drain.

4. Call me unlucky or incompetent but I have been rear end twice in a 3 cars + pile that I am not at fault. When that happens to your car, it's likely 5-10% value drops due to that injury. Leasing return doesn't account for that. As long as you fix the vehicle to passable condition.

Again, thanks for chime in and detail analysis. Wouldn't mind that approach when I am in the position to get a second car.

GhostZ > Jimmy Tango 08/12/2014 at 16:02

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4GT Lease sounds like a good approach to me as well. It's far more likely that the dealership will over-estimate the value of the car than under-estimate it, letting you effectively own the same metal for a lot less money in the long run. Then you can buy it back at far lower than its sticker price if you play your cards right. Convince the lease company that you'll be DDing it so they estimate you for closer to 10k or 15k a year if you expect 8k a year.

Jimmy Tango > GhostZ 08/12/2014 at 16:41

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That's a good angle to consider! I was thinking I don't need even 10k a year but that's 3% difference from 10k per to 15k per (BMWNA set the number, not the dealership.), which would be about 1.5k consider 4GC's MSRP. And if I have a good faith in its value after 3 years of care from MYSELF, then I got a great deal if I do want to buy it after lease up, or walk away.