Paying more than $15,000 for a car is nuts

"Chairman Kaga" (mike-mckinnon) 01/26/2016 at 13:21 • Filed to: None

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Sorry for the essay, I’m writing this to solidify my decision to NOT plan on getting a new car in two years as I’d planned. I’ve spent the past year being bummed that I wasn’t going to get a new car until 2018 at the soonest, and all these awesome machines would be passing me by. One recent morning as I sat in furiously deranged gridlock I accepted a truth - buying a new $36,000 car would be a moronic decision.

Let me preface this by saying for me in particular, and likely for most people, spending $36,000 on a brand new performance oriented car is not a great financial decision. I don’t think there’s a financial advisor on the planet who would argue that buying a brand new car is a good idea unless you have serious bank in the bank.

To start, let’s consider the average transaction price for new cars.

!!!error: Indecipherable SUB-paragraph formatting!!! Unless you’re clearing a net income in the six figures annually, that’s a solid chunk of your pay. Even if you are a 2-percenter, committing to spend $31,000+ interest on a rapidly depreciating asset is sorta dumb. But I’m no Dave Freaking Ramsey.

!!!error: Indecipherable SUB-paragraph formatting!!! but I believe the 60% loss over 5 years still holds in 2015. That’s a crapload of depreciation. You’ve paid $30,000 plus interest - probably around $6,000 - to lose more than half of that to depreciation. Will you get around $20,000 of use, additionally factoring in fuel, insurance, and maintenance, from your car in that amount of time? Again just making generalizations I’d say for most that would be a fairly solid No. You got to work, you made an epic road trip or two, you hung out with friends, impressed someone on a date, etc. And let’s just toss the, “But I enjoyed driving it and that’s the most important thing,” argument for a second, and from a purely utilitarian perspective using most offensive car I can think of, you could have done those things except for impressing your date in a 15-year old $2,500 Corolla you bought from that retired teacher down the street. And if your date is more impressed with your baseball stitched Recaros than your financial acumen... well fine then, they’d be pretty rad. I digress.

“So then what, you pretentious twat? Do I ride a bike?” you ask. After spending many months studying the used car market for something to replace my loathsome 2008 CRV LX, !!!error: Indecipherable SUB-paragraph formatting!!! . I found at least five cars on that list I’d be happy to drive, and looking farther from home I found a good many more. In fact, I found a bunch of $10,000 cars I’d love to have. Man I wanted that 2005 IS300 SportCross... Again, I digress.

Why is that? Why not get something Jalopnik Brand Enthusiast Approved? I spend roughly two hours a day in the ninth worst traffic in the United States. You probably have it better, but I bet you still spend most of your seat time going to work and running errands. My worthwhile vehicle criteria are: comfortable seats, good environmental controls, quality sound, relatively quiet, reliable, generally fuel efficient, and decent to drive. To illustrate, I sat in traffic next to a brand new BMW M4, complete with carbon ceramic brakes and who knows what else checked on the options list for $3,800 a pop, averaging about 6 MPH for roughly 25 minutes. There was finally a break in traffic and the guy floored it. For exactly four seconds. The he was forced to haul it back down to 15 MPH as we crawled to the traffic light where we waited side by side for three minutes before continuing on at 15 MPH. THRILLING! Don’t get me wrong, I’d so much rather have the BMW than my CRV, but I think I’d also feel incredibly frustrated and more than a little cheated.

Of course there’s the weekend when you can finally get out on a lonely hill country road and flog the M4 like it was meant to be, at least until you find yourself trailing a peloton of cyclists or a tractor. The question you have to ask yourself is “Is that hour or so of driving each week worth the hours, days, weeks, and months of my life spent to purchase it?” And, “What would I have rather spent that money on, instead?” Let me ask, have you ever spent three weeks in Tuscany? You could do that about three times for what you lost on your car. Oh, and well, yeah, of course... if you’re one of THOSE people there are investments and retirement plans and property. Bah.

This argument is purely based on financial responsibility, quality of life, and long range goals. According to some hardliners, !!!error: Indecipherable SUB-paragraph formatting!!! , and you are thus part of The Problem. I’m not a hardliner. I’d still drive a 2007 WRX wagon five days a week. Happily.

So back to the thesis - there’s no compelling reason for most people to spend more than $15,000 on a car. I stand by it. Not saying you can’t. It’s your money. And I say that with no judgment or snark. I just feel I can get more than enough car for those two hours a day I’ll be using it, and with that $15,000 cap as the starting AND ending point of my car search. It’s not hard for a middle-class family to save that amount in four or five years if you’re reasonably disciplined, and especially if you don’t already have a car payment, and ESPECIALLY if you have a car to sell or trade. It’s also reasonable to expect the car you choose will be 3-5 years old and have well under 100,000 miles, possibly certified, and if you’re nervous easily eligible for a Doug Demuro authorized extended warranty. Just do your research and take your time shopping, test driving, and inspecting. It’ll still depreciate, but likely not 60% over your time of ownership. Further, in three or four years after you’ve saved up $8,000-10,000, you can sell it for $8,000-10,000 and buy a new used $15,000 car, pocket the remainder, buy a warranty, get some sticky tires, or...

Finally, I learned the hard way that using your daily driver as a weekend warrior is NOT the best idea. Ask me about my beloved 1994 Acura Integra GSR. So you get a boring but competent sedan or hatchback. And it kills you. It’s not a fun car. Your rep as an enthusiast is in shambles. Easy. Spend $13,000 on your new used daily driver and use the other $2,000 to get a project car. Get a Jeep or a truck or a Fox Body or a Panther or a Miata or do like me and get a basket case Alfa Romeo. You ‘ll hate it, but it will complete you in ways you didn’t know were possible. Forget soul mates, you want an Alfa.

Talk amongst yourselves...

For Sweden > Chairman Kaga 01/26/2016 at 13:26

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Luckily the world is full of sub-$15,000 Volvos

d15b > Chairman Kaga 01/26/2016 at 13:28

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Yes, but you get to be the first one to(arguably) fart in the seats.

Just once in my life, I wanted to do that and say I did it.

Edit: TLDR. Soz, mate.

Jdrentarol > Chairman Kaga 01/26/2016 at 13:30

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Can’t wait to see you go to a Lambo dealer

MontegoMan562 is a Capri RS Owner > Chairman Kaga 01/26/2016 at 13:30

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Going to be honest, I skimmed that lol.

But I practiced exactly what you just preached my friend.

I didn’t need a FUN car for my DD, it just needed to be a pretty solid car that was safe for my kid, be reliable, and get decent gas mileage.

So I paid 11k for my Mercury Milan with 45k miles on it (when I bought it) and I had bought the $2500 1968 Mercury Montego the summer before. The Montego is the fun car, it’s also a lot easier to drive the Milan in traffic than the Montego - and I see a lot of it.

Because my wife only has her DD, we paid around 15-16 for her Jeep Commander that had about 45k on the clock of that one. (was a certified used so even came with a warranty, though limited - read the details on those)

It’s a sweet spot. You get a LOT of vehicle for 15k if you’re not afraid to buy a used car.

EL_ULY > Chairman Kaga 01/26/2016 at 13:30

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$14,400 for both of these :]

yay when banks comply and good used car lots play nice. Both have 115k and supah cleeeean! Both 2.5L also lol :]

Nibby > For Sweden 01/26/2016 at 13:30

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BUY ALL THE 240S

Party-vi > For Sweden 01/26/2016 at 13:31

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Some of them only a few years old. I wonder why...

Chairman Kaga > EL_ULY 01/26/2016 at 13:32

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Doing it right.

For Sweden > Party-vi 01/26/2016 at 13:32

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Because the depreciation gods smile upon us

Birddog > For Sweden 01/26/2016 at 13:32

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Luckily the world is full of sub-$1,500 Volvos

That’s better.

Dwhite - Powered by Caffeine, Daft Punk, and Corgis > Chairman Kaga 01/26/2016 at 13:34

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I think its more than fair to purchase a well equipt car new if you plan on owning it for a long time.

My parents bought a new Explorer back in 2012. 4 years and 70,000 miles later it would be tough to say they would be better off with a sub $15000 car.

There is a value to getting specifically what you wanted, and the reliability of a new car.

BrianGriffin thinks “reliable” is just a state of mind > EL_ULY 01/26/2016 at 13:34

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V12 Jake- Hittin' Switches > Chairman Kaga 01/26/2016 at 13:35

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I think it depends on the car. If you spend $30,000 on a new car, it (in general) will lose most of its value and have a shit resale. However, if you’re buying something like my S600, where it’s already lost all its value and is sitting at $16-20,000 you aren’t going to lose much resale from the initial purchase price.

Chan - Mid-engine with cabin fever > Chairman Kaga 01/26/2016 at 13:35

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The average US sale price is inflated because of insanely loose finance terms. People can walk in and drive out with a $400 monthly payment and little to nothing down.

Nobody, figuratively speaking, can afford a $32,000 hulk of depreciating metal and plastic, in cash.

If you plan on keeping the car until it does, buying new is fine. If you like trading cars every 1-2 years, buying new is also probably fine. If you like trading around every 3-5 years like I do, buy cars that have already lost a good chunk of their value when new.

Chariotoflove > Chairman Kaga 01/26/2016 at 13:35

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So did it work? Have you convinced yourself?

Sorry, couldn’t help ribbing you a bit. :) You logic makes sense for many people. Of course, people have different needs. For instance, we started out last Summer’s car search at Carmax, etc. and test-drove lots of quality used vehicles. In the end, though, we bought a new one because it had the features that we had determined were most important to us, and there were no used examples on the market.

I absolutely agree with your view that one should get a car that they will enjoy in the traffic they spend the most time with. How does your calculation work out if you assume that the owner will keep his new car for its entire life? Because then he gets to enjoy that car in the prime of its working life with full warranty and before major maintenance and repair stuff comes, while never having to worry about depreciation. Does tune new car make more sense under those conditions?

Brian, The Life of > Chairman Kaga 01/26/2016 at 13:36

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I guess it’s all relative. For many of us, you’re right; we’d be better off buying used. That said, it’s relative. You could make the same claim about buying new clothes when it’s so much cheaper to shop at thrift stores.

Battery Tender Unnecessary > Chairman Kaga 01/26/2016 at 13:36

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Then I’m waaaaaay past nuts :P

Unless someone is buying a car for the pure utilitarian goal of a Point-A-to-Point-B appliance, buying a car is dumb on its face. We could all get by with a couple horsepower tube on wheels. It’s a personal choice and one based on such a varied number of factors that the “right” choice is often as different as the people making it.

Mercedes Streeter > Chairman Kaga 01/26/2016 at 13:36

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I kinda agree with this rhetoric. I bought my car brand new in 2012, for the whopping price of $16k. 3.7 years later, it’s about to turn 100,000 miles. And 100,000 miles in four years in the smallest car you can buy on American soil? It’s been hard on the little bugger.

Sound system’s crapping out, wheel bearings are shot, exhaust rusted off (replaced), belts squealing, transmission dying, panels falling off or taking damage, and the alignment that still needs fixing. Then there’s the cosmetic things, like the gash in the rear bumper, the deep rock chip in the paint, and the bullet hole.

It’s enough that my car needs enough repairs that I can either: A) Repair it and race onto 200k or B) Dump the car for another cheap car, and be equally just as happy.

Such can’t happen with expensive cars. If your MB S-Class reaches 100k and starts dying, you can’t just get a new one so easily.

EL_ULY > Chairman Kaga 01/26/2016 at 13:37

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I only make $14/hr. so I ain’t super rich or anything. Like Kevin said doe .

Bytemite > Chairman Kaga 01/26/2016 at 13:37

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Would the SF-R tempt you to buy new in 2 years? Apparently it will be close to $15,000...

AM3R shamefully returns > Chairman Kaga 01/26/2016 at 13:37

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For about the price of a fully loaded 335i, I bought a 328i, C300, and a 335i. I luv depreciation. The sweet spot is right when they get off CPO/right when they get off warranty.

BrianGriffin thinks “reliable” is just a state of mind > Chairman Kaga 01/26/2016 at 13:39

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(Slight) counter argument:

Buying a new $25k car allows you to know the vehicles maintenance history. I’m planning on keeping my Forester to, reasonably, 120k miles or so (so like 10 years of ownership). I know what work has gone into the car and what the future will most likely hold.

Maybe at ten years old it will be worth $10k, a “loss” of $15k plus interest. But I’ve only had to pay purchase taxes once. I got 40k miles out of tires, 80k out of brakes, and knees when they were going to be needed and could budget.

Tl;dr it may make sense to buy new or more expensive if you're going to keep the car for a long time.

Tripper > Chairman Kaga 01/26/2016 at 13:39

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This logic sits with most, but I bought a 15k ish car once and I ended up losing the most $$$ in the shortest period of time of any car that I have owned.

I bought a brand new 2013 Jetta to DD thinking I would be fine with my E46 M3 on the weekends. Wrong, so I had the jetta for 8 months and racked up 18k miles, then traded it for a 4k loss because I hated driving it.

Master Cylinder > Chairman Kaga 01/26/2016 at 13:40

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I agree with the basic idea of this article, but the $15K point can vary depending on your income level. For me, I can get a bunch of good, fun cars for less than $10K, but they will probably be ten or more years old or have over 100K on them.

In a couple years, if my career stays on track, I could see spending up to $25K or so, but honestly what are you getting beyond that besides a new-car smell?

I will say I am quite tempted by the Focus RS even though it would be financial suicide at the moment.

Van Man, rocks the Man Van > Chairman Kaga 01/26/2016 at 13:40

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You sound like my dad (in a good way). He thinks his there’s no car truly worth more than $40,000-$50,000, but for a totally different reason than you. He focuses on everything else you could do with the money rather than depreciation, but it's really taught me to think about the real value of money. I love cars, but even as an enthusiast I couldn't justify spending $100,000 on one.

Stapleface > Chairman Kaga 01/26/2016 at 13:40

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Your reasoning is sound, and makes a fair amount of sense.

That being said, it’s always a crapshoot when you’re buying someone else’s vehicle. Who knows how it was maintained? What problems might creep up on you that you weren’t expecting?

In no way am I saying buy an expensive car, but you have to be diligent in what you’re looking for and checking it out. In retrospect I PROBABLY should have done this when I purchased my 2015 Civic. I was looking for a used Fit in that sweet spot, but it turns out I couldn’t find a comfortable driving position in either the previous or current gen Fit. And I got a good deal on the Civic, so that’s what I ended up with.

The used market certainly holds more value than the new market though. You just have to hope that the car you're paying for works the way you expect it to.

Mercedes Streeter > EL_ULY 01/26/2016 at 13:40

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Clean garage, sweet Lolvo/BMW combination. I think I found my new hero. 

GTI Sprinks > Chairman Kaga 01/26/2016 at 13:41

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All those enthusiast cars ain’t going to buy themselves. Different strokes for different folks.

Chairman Kaga > Chariotoflove 01/26/2016 at 13:42

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I’ll fess up - we bought my wife a new 2014 Highlander last spring. The reasons were simple - the 2014 was a MASSIVE upgrade over the 2013, but which wasn’t being discounted enough that it would make sense and which were also REALLY holding their value as used or CPO, and my wife keeps cars for 15 years, so by the time we sell or trade it’ll have long been at the bottom of the depreciation curve anyway.

EL_ULY > Mercedes Streeter 01/26/2016 at 13:42

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We named them El Zapatito (little shoe) and El Moose :]

Chairman Kaga > Battery Tender Unnecessary 01/26/2016 at 13:43

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Which is what I said. I won’t fault anyone for buying the car they want and that makes them happy. I also acknowledged that truly fiscally responsible folks solidly espouse the purely utilitarian ride. Look to the Mr. Money Moustache Manifesto. I can’t go that far.

Chairman Kaga > Stapleface 01/26/2016 at 13:44

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Which is exactly why you take your time researching, shopping, inspecting, test driving, and inspecting again.

Chairman Kaga > Master Cylinder 01/26/2016 at 13:45

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You pegged the exact car I was referring to...

gin-san - shitpost specialist > Chairman Kaga 01/26/2016 at 13:45

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For the longest time, I equated being a car nut with having a performance machine. To many people, this equation remains true, but over time I came to realize that your love of cars can be for many things other than performance. Perhaps it’s the rarity of a vehicle or even comfort, etc. but the more and more I think about it, as much as I want a performance car, a comfortable car with some power when I need it is really what I need.

You’re right about the average new car cost, though - I wouldn’t want to spend more than half my annual pay on a regular car.

If I think about my own situation and go back a few years, I was thinking of buying a new Hyundai (the Elantra GT) at the time because of 0% financing and it’s a decent looking hatch. I’m glad I didn’t, because that same car can be had (a couple of years older now) for surprisingly low prices.

It all comes down to disposable income, and I very much prefer to allocate my disposable income to other things than a heavily depreciating vehicle.

Textured Soy Protein > Chairman Kaga 01/26/2016 at 13:47

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I’ve come around to this idea as well lately. Once I return my leased 135is I’m going to stick with my old ’05 Grand Cherokee that I’ve been using as my winter car. I got it for $10k and have been keeping it in good shape, putting work into it as needed, and keeping extensive records of all that work so I can show it to prospective buyers down the line. Basically trying to retain as much resale as possible.

Chariotoflove > Chairman Kaga 01/26/2016 at 13:47

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So you did the right thing. Guidelines are just that: guidelines. Funny how when you get right down to business you can end up deviating pretty far from them. Doesn’t mean it isn’t good to have them as a place to start, though.

Chairman Kaga > Dwhite - Powered by Caffeine, Daft Punk, and Corgis 01/26/2016 at 13:48

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And to be fair, we bought a brand new 2014 Highlander XLA last year. The ‘14 was a massive upgrade over the previous generation, but those models were holding onto their resale value like pitbulls. We decided since my wife keeps her cars 12-15 years (seriously, she’s had THREE cars her entire life including this one) that it was worth the premium to get the upgrade. It’ll be bottomed out by the time we trade or sell, and there’s a good chance our daughters will inherit it anyway.

Party-vi > Chairman Kaga 01/26/2016 at 13:48

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I purchased a $12k car three years ago. Here’s the total for all the shit BMW says is wrong with it after the consecutive visits I’ve had at their lovely Catonsville service location since my purchase. This does not include the preventative maintenance I had done after purchase (water pump, transmission fluid, plugs, etc.). In three years I could have spent $24,000 on my originally $12,000 car. If I had purchased a $30,000 car I would only be $14,500 into my payments. That’s a $10,000 savings.

Granted, most of those items are regular maintenance issues, but you would not see bills for any of those items after the average of 12,000 miles per year of driving. In my case it’s been around 23,000 miles per year.

Chairman Kaga > V12 Jake- Hittin' Switches 01/26/2016 at 13:49

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Yeah, of course every situation is different. I’m just saying for the average consumer with the average middle-class income and average needs... That said a fully depreciated S-Class is a screaming deal, as Tavarish demonstrates.

Chariotoflove > Master Cylinder 01/26/2016 at 13:49

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Mmmm, new car smell...

Battery Tender Unnecessary > Master Cylinder 01/26/2016 at 13:50

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I’ve been trying to find out how many RS’s Ford plans on making, because it could easily become the second coming of the 1M Coupe (prices never dipping below sticker) if they are rare enough. The Fiesta ST already commands dumb used prices that are sometimes even or just below new prices.

Chairman Kaga > gin-san - shitpost specialist 01/26/2016 at 13:52

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And like I did, you can always find some more interesting way to express your enthusiasm. Spending a few hours a week working on my Alfa is great therapy and intellectual exercise. I might only get to drive it a few hours a year, but I still count the time I spend with it as important to me.

I have thought about selling it and importing a Kei car next year, though... Maybe a ‘91 Honda Beat? About $8500, all inclusive.

Gone > Chairman Kaga 01/26/2016 at 13:53

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Our next car will cost right there ($15-18k) and will be the most we’ve ever paid for a car. When we get replacement #2 next year, it’ll be the same or a little less. It doesn’t make sense to us. Fiscally we could afford much more, but the only time I spend more than $15k on a car is a when we will either pick her up a musclecar or a long nose 911/912 or an older supercar for me in the next couple years.

Chairman Kaga > Party-vi 01/26/2016 at 13:54

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I’m really not trying to sound like an ass, but maybe that particular $12,000 BMW wasn’t the best $12,000 BMW you could have bought? It takes a LOT of work to get a good used car in your garage, and even then it’s always a crapshoot. Unless you’re Doug Demuro of course.

vondon302 > Chairman Kaga 01/26/2016 at 13:57

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I said I’d never buy another new car after the Boss. Then the Rs came out. Fate and depreciation are 2 evil bitches.

Meatcoma > Brian, The Life of 01/26/2016 at 13:59

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Could also make the same claim about a house. Buy a trailer! It’s not how much time you spend, but how you spend your time.

Party-vi > Chairman Kaga 01/26/2016 at 13:59

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There is no such thing as a best $12,000 BMW haha. That’s what I was getting at. A $15k car might fit the on-paper requirements of someone looking for a car, but you could run into maintenance issues like I did.

RiceRocketeer Extraordinaire > Chairman Kaga 01/26/2016 at 14:02

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Yep. I have a ‘99 Camry and an S2000 and neither car is depreciating much if at all.

Wife insists on leasing something nice-ish for herself and internally I cringe at how much it costs - I could get an E46 M3 with that money! But she pays for her own car, so that’s her thing. *shrug*

Seriously though, I haven’t come up with a cheaper way of getting around than the old Camry. I plan to keep it until autonomous/electric cars take over the world.

V12 Jake- Hittin' Switches > Chairman Kaga 01/26/2016 at 14:08

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Especially if you can find rare options that were $10000 from the factory but add virtually nothing to the resale. Also, it's helpful to budget for costly repairs.

V12 Jake- Hittin' Switches > Party-vi 01/26/2016 at 14:10

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True story. $3000 ABC jobs aren't very funny.

14FeistyFieSTa > Chairman Kaga 01/26/2016 at 14:13

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So you definitely bring up some good points. However, as always, there are exceptions to the ‘rule’. For example, some ‘performance’ cars will hold value better than others, and often better than ‘regular’ cars. Take Subaru STIs, they generally hold their value from new for a few years better than most other cars.

Another example may end up being the Focus RS. Obviously it’s too soon to say for sure, but personally I will be surprised if they lose much value the first year or two of ownership.

The other thing is that there are plenty of used vehicles that are towards the bottom of their depreciation curve that are still more than $15k. An example might include the 987.1 Porsche Cayman S(2006-2008), they’re around $25-30k right now. I would not expect them to get much lower in the next couple of years (for example, a high mileage Cayman S right now may go for closer to $22k or $23k). A BMW E46 M3 in good condition might be similar - around $20-25k now (with 3 pedals), and if they stay in good condition even with a few more miles on it, you likely won’t lose much value, if any at all.

There are plenty of used Mercs, BMWs, Audis, etc... that depreciate a lot at first, but after a few years are fairly affordable and, as long as they are kept in good shape, likely won’t lose too much value.

Master Cylinder > Battery Tender Unnecessary 01/26/2016 at 14:19

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Yeah, unfortunately what I’ve read / heard so far points to small volumes. I think they should just build as many as they can sell, but I’m of course talking as one of the scavengers who wants a used one for $25k a couple years later.

Master Cylinder > Chairman Kaga 01/26/2016 at 14:23

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SO tempting. I make an average salary (literally, almost exactly the US average) and I could afford an RS if I really stretched my budget (or if I didn’t have those damn student loans). But I’d be so financially vulnerable for at least the first 1-2 years while I was paying it off that it really scares me off. Maybe if I get a surprise promotion and they keep making them on into 2018 or so...

Mr Parker > Party-vi 01/26/2016 at 14:28

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I’m guessing your BMW is an E90 or maybe an E60?

Milky > Chairman Kaga 01/26/2016 at 14:30

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Ahem.

Sam > Chairman Kaga 01/26/2016 at 14:34

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On some cases, it is a poor financial decision, in others it is a great financial decision. It all comes down to the car. McLaren 675LTs, for example, have actually appreciated in price already. You literally get paid to drive the car for a year or more. That is pretty much the enthusiasts dream.

Party-vi > Mr Parker 01/26/2016 at 14:39

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E46 brudda.

Future next gen S2000 owner > Chairman Kaga 01/26/2016 at 14:51

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There are a lot of assumptions but the main problems is this one. If no one bought a new vehicle, then there would be no used vehicles. That in and of itself is a very good reason to buy new.

At that price point - 15K, a lot of people are still financing. For instance, personally, I won’t take out a loan on any vehicle with more than 30K miles and 3 years old. So financing a 10 year old car with 95K miles is a nonstarter. Most people don’t have 15K laying around is cash.

I’m not saying spend every dime on your pay on a new car you can barely afford, but some instances buying new makes sense. I just ordered a ‘16 Tacoma cheaper than a comparable ‘15 is being sold for on dealer lots. So I could get a ‘16, which is the new update, with all the equipment I want for the same price as a year old truck with 15K on the odometer. You would be dumb to get the ‘15.

Arrivederci > EL_ULY 01/26/2016 at 14:52

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Your garage indicates otherwise! Not that that may be important to you, but you certainly bought well!

Arrivederci > Chairman Kaga 01/26/2016 at 14:53

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OMG all the wasted monies!!! ;-)

JGrabowMSt > Chairman Kaga 01/26/2016 at 14:55

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The HEMIWagon was sub 10k, and the SL was just over 10k.

I (right now in life), am not interested in having a new car. That doesn’t mean I’m discounting the possibility of a new car for my girlfriend, but nothing on the market screams my name loud enough to pull my attention away from where I am currently.

I don’t specifically agree with your specific budget idea, but I would definitely say that new cars are not for most enthusiasts for the sole reason that modifications or track abuse will do far worse than the depreciation of purchasing a new vehicle and keeping it for several years.

I think that there’s some merit to driving a small car on a regular basis that isn’t necessarily anything special because it allows you to save your pennies and spend them on a true project car that you will enjoy greatly. Personally, I don’t follow this. The HEMIWagon and the SL are both my toys, I just happen to drive the HEMIWagon most days of the week. The SL will never be modified, but the maintenance on it isn’t for those with weak stomachs (or wallets, for that matter), while the Magnum is my indefinite (or infinite) project, destined for massive muscle.

The only thing between owning a car and owning an enthusiast car is whether you’re enthusiastic about it to begin with.

Arrivederci > Chairman Kaga 01/26/2016 at 14:57

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Financially-speaking, almost any new car is a bad decision. There are outliers of course, such as the BMW 1M, but 99.5% of all new cars sold will quickly depreciate.

That said, your depreciation cost does actually pay for something. The car will be warrantied, maintenance may be included. If you buy at the right time and have good credit, you may not pay interest.

If I have to have only one car that I absolutely must rely on, I’m most comfortable buying something new or nearly new and CPO. That way, if it breaks, I’m not holding the bag to fix it.

Now, if I already have a car and want another, I’ll buy something fun, used and somewhat inexpensive. That way, if it breaks, I’ll have an immediate fallback to rely on while the other is getting mended.

gin-san - shitpost specialist > Chairman Kaga 01/26/2016 at 14:59

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As much as I want a Japanese RHD car, I don’t think it’s possible anymore to get insurance for them in Ontario. I’d love to have a Cappuccino just for fun and to eventually swap the engine for something more powerful, but you'd probably end up with that pointless insurance where you can't drive it anywhere except to and from auto shows.

Brian, The Life of > Meatcoma 01/26/2016 at 14:59

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Houses depreciate? According to Zillow (ymmv), my house doubled in value since I bought it in 2010.

;)

EL_ULY > Arrivederci 01/26/2016 at 15:14

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a lot of shopping around, negotiating, and good credit (that I had for some unknown reason) goes a long way. Busting ass from 7-7 helps also, dat overtime, yo!

RX > Chairman Kaga 01/26/2016 at 15:19

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I bought a 2005 Lotus Elise in 2010 with 14k miles for $26k. I’ve driven the crap out of it for clost to 6 years. It now has 40k miles on it and I could sell it for more than I paid for it, and probably cover all the maintenence, (not the insurance or gas, but it’s similar to any other car). On the flip side my house is worth 24% less (zillow) than I paid for it in 2006, and I cant think of anything else I’ve ever purchased outside of a mutual fund that has maintained it’s value.

gawdzillla > Future next gen S2000 owner 01/26/2016 at 15:23

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I looked HARD at the tacoma before buying my 15 silverado for the same reason

Chairman Kaga > BrianGriffin thinks “reliable” is just a state of mind 01/26/2016 at 15:24

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Right. Which is why I prefaced the argument with the word “generally” and also admit we bought the wife a brand new 2014 Highlander XLE last spring. The ‘14 was a major upgrade over the previous gen, but those cars weren’t being discounted enough to justify not getting the newer, quantifiably better car. And like all Toyotas the HIghlaner was clinging to its resale values quite well, meaning even going CPO or plain old used wasn’t going to net us much benefit, especially considering my wife keeps her cars 12-15 years. She’s 37 and this is only the third car she’s owned.

Porsche was my first word > Chairman Kaga 01/26/2016 at 15:27

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... Man I wanted that 2005 IS300 SportCross... I digress. ...

But why? Since I was first into the SportCross they went nothing but up. That was 2009. But there were no available

... My worthwhile vehicle criteria are: comfortable seats, good environmental controls, quality sound, relatively quiet, reliable, generally fuel efficient, and decent to drive. ...

Same with me though I live in Germany. I almost do nothing else then Autobahn and inner city traffic, therefore I went auto tranny. Furthermore I chose a Diesel because of the lew rev grunt. Now I have fun at every intersection but get a decent fuel economy. I’m around 30 mpg doing Autobahn at decent speed (100 mph and above).

... So back to the thesis - there’s no compelling reason for most people to spend more than $15,000 on a car. ...

Totally agree on that.

... It’ll still depreciate ...

If you do your research you can still buy cars that won’t depreciate at all. Said that it’s mandatory you put a lot of effort (and money) in maintaining the car in good condition. You can get a Porsche 928 for decent money. If you put a lot of time and knowledge in your search you would certainly get a decent car. Put some said time and effort in the car and it actually go up in value. Or take a BMW E30 325 Convertible. They are still pretty cheap in the US, but here in Germany you won’t find one for under €10,000 in good condition.

... Spend $13,000 instead and use the other $2,000 for a project car. ...

Or the other way around. Get a daily driver for let’s say $5,000 and a fun car for 10,000 and you’re in driving heaven.

Porsche was my first word > Party-vi 01/26/2016 at 15:39

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Bought a 90,000 miles BMW and put another 90,000 on it. Everything works, nothing apart from the service needed, good for at least another 90,000 miles the garage said.

Mattbob > Chairman Kaga 01/26/2016 at 15:39

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Wharever makes you feel good man.

Party-vi > Porsche was my first word 01/26/2016 at 15:46

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So no brakes or water pumps or belts or coolant or shocks or control arm bushings in 90,000 miles or in 180,000 miles? Are you sure you didn’t buy a Honda?

/Idon’tbelieveyou

BLCKSTRM > Chairman Kaga 01/26/2016 at 15:49

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Wow, that’s maybe $1,000 worth of parts total, plus $10,000 for markup and labor. Insane!

How handy are you? Are you completely redoing the Alfa?

I ask because I also have an old BMW like Party-vi. I have to address the same issues he does, but I do it all myself and I’m out between $1,000-$2,000 on average per year (which is about half maintenance and half upgrades).

An E46 M3 falls in your budget, and is likely depreciating VERY slowly at this point, driven by mileage more than anything else (and possibly appreciating depending on how many miles you put on it). I’m a BMW guy, but there are surely other things in your price range that are collectible enough that you’ll be out very little at the end of the day.

Even better, manual E36 M3 sedans aren’t depreciating anymore until you get to crazy mileage, are fairly practical, and are relatively inexpensive. You’d be way under budget, and could get your kicks addressing all the little things Party-vi just highlighted above. And then invest in upgrades, which is also a lot of fun.

Plus, they’re in this cool gray area between slow car fast (Miata, BRZ) and fast car.

Yeah, I’m biased, but there has got to be something your flavor that is in a similar position. But probably better odds with something German or Japanese than American.

AMGtech - now with more recalls! > Chairman Kaga 01/26/2016 at 15:49

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This is why I spent $8400 on an old AMG instead of $50000 (well, lease, at employee rates) on a new C450.

BLCKSTRM > Party-vi 01/26/2016 at 15:59

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No offense, but you’re crazy taking an e46 to the dealer for service. I don’t blame you for not doing that stuff there.

All that stuff should be way less at an indy shop, and only about $1,000 grand total in parts cost if you do it yourself.

He does note he did needed service, which should include the things you mention. Which would be needed on any car with that kind of mileage. It’s not nearly as expensive if you 1) do it as you go, and 2) don’t take it to the most expensive place you can find (the dealer).

Eric @ opposite-lock.com > Chairman Kaga 01/26/2016 at 16:00

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That 60% loss in 5 years that your opinion is based on hasn’t been true since the Clinton Administration.

Porsche was my first word > Party-vi 01/26/2016 at 16:01

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Oh, yes, the control arm bushings. But they wear out in every car. And they are due in the next time. Brakes only the pads (normal wear). I added some brake fluid once. When I slammed the drivers door hard (instead of hitting another driver) I had to replace a little part for the electric window. Once I hit the curb hard and had to replaced a control arm in the rear.

Apart from that everything is working properly. But I did mainly long legs with no demanding conditions. I don’t know if the shocks or anything was replaced before I bought the car, but I expect them to be replaced in the next 20,000 miles.

No turbo, no differential (I have AWD), no waterpump, no cylinder head needed to be replaced.

Eric @ opposite-lock.com > Battery Tender Unnecessary 01/26/2016 at 16:07

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In my region the ST3 FoST barely dips, too. They’re practically solid gold in spite of being fairly common. The only thing that damages their resale value is modifications. Apparently this isn’t true in the rust belt or SoCal, so YMMV.

Eric @ opposite-lock.com > Chariotoflove 01/26/2016 at 16:08

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When does it go away? 9 months in and people still mention it when they get in my car.

Party-vi > BLCKSTRM 01/26/2016 at 16:10

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The service at my local (30 minutes away is local I guess) dealer is phenomenal. For an hour of labor ($120) they’ll inspect the entire vehicle and prepare a report (screenshot above of the totals) and give me a loaner at about $10 a day. I perform work myself if I have time. I usually go to them for fluid service jobs. For other work I use another mechanic that charges around a third-less for labor.

The parts list above is realistically $1500 or so depending on the manufacturer. It also doesn’t take into account any special tools you would need to do the work.

Chariotoflove > Eric @ opposite-lock.com 01/26/2016 at 16:11

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I think you’d have had to order a factory delete. :/

Chairman Kaga > Eric @ opposite-lock.com 01/26/2016 at 16:21

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My opinion is based on MANY factors. New car depreciation is just one issue among many, and as far as I can tell the 60% over 5 years has remained relatively consistent over the years.

Dru > Chairman Kaga 01/26/2016 at 16:25

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I really like what you had to say here. I’d like to add, if I may...

I spent 12K on my Jeep 5 years ago. It was already 7 years old, but it was the last year of the WJ chassis and solid front axles, so that’s what I wanted. I paid it off not too long ago, and I absolutely love this thing.

Every morning I fire it up, switch on the heaters to thaw it out, hear the burble of the V8, smell the leather as it warms my lazy ass with seat heaters. I am reminded a car should be less like a cell phone, replaced every few years when the latest and greatest comes out, and more like a pair of shoes, worn, broken in, mended, and loved.

At least when it comes to a DD. I have a bit of a basket case old Toyota 4x4 that hogs my garage space.

Dru > Master Cylinder 01/26/2016 at 16:26

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Plus side to the RS is that depreciation will be minimal, probably in line with the Subie STI if not better.

Chairman Kaga > Dru 01/26/2016 at 16:28

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Yeah, there is REALLY something to be said for finding your “life partner” car. I feel like my old Integra GSR could have been with me for a looong time if it hadn’tbeen totaled, or my Saabaru if I hadn’t moved abroad and sold it. I do wish there was a car out there I wanted badly enough that I’d want to keep it forever, but at the moment I’m taking a basic, utilitarian point of view and just planning on getting a car that’ll get the job done without making me sad.

I’m never giving up my garage hog Alfa, either.

Rico > Chairman Kaga 01/26/2016 at 16:28

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There is a villa in Tuscany that could’ve had your name on it!

Kidding!

Dru > Chairman Kaga 01/26/2016 at 16:36

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I’ve felt like I found that with my ole girl. The V8 has so much torque, its rather quick for an SUV. I’ve hauled people, mulch, musical instruments, furniture, and god knows what else in it. I’ve towed an enclosed trailer when we moved. I really want to get into 4x4ing to take advantage of that aspect.

Quite literally the only downside to this car is 13mpg in the city. On long trips I can easily get 20-22mpg. But I only use about 30 gallons of fuel per month, so its not a huge deal.

I hope you find your life partner on wheels.

FidelFastro > Chairman Kaga 01/26/2016 at 16:55

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Totally agree and id argue some “used” cars are even better ideas.Some more points to solidify your position

-Everyone forgets to factor in the huge differences in insurance prices once your car is older (becasue its worth 40% of its value now) so the numbers you quoted would be even higher. I thin ka good round number for the average person is $300/month obviously extremely variable

-How much value did you get out of your car? $300 x 12 = $3600 and 100% the mileage. Did your car provide you with $3600 worth of VALUE? they just cant for me. Add in the fact that you could most likely have bought another car to fulfill 90% of the same functionality for the payments you made.

-But its not fast! Well my argument there is also much the same as yours. How much pwer and performance do you really need? Id rather have something I can use everyday rather than be hating my life sitting in traffic in my car that does sub 4 seconds zero to sixty. Anytime ive been able to drive a Hellcat or scat pack challenger, a viper or a corvette im just frustrated. When I drive my “120hp” $2400MR2 to work, yep even in the snow and rain, I have a smile on my face everytime

Loved the article, glad im not the only one

duurtlang > Chairman Kaga 01/26/2016 at 17:25

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I agree. Seeing what kind of quality (in different ways) I can buy for peanuts, buying something that depreciates a lot is nuts... to me. I’ve got a €28k company car (Ford Focus wagon), and a daily driver I paid €3k for 100k km/3+ years ago. A now 16 years old Pininfarina built Peugeot 406 coupe. Guess which one is more enjoyable to drive and generally the better car? It’s not the Ford... Cost for the Peugeot after 100k km: maintenance: €0.025 a km, 95% outsourced. Depreciation: €0.01 a km. Peanuts.

I recently bought a neglected ‘97 EA0 Mitsubishi Galant wagon with the base 4g63 two liter engine. As a beater rally (Alps + Pyrenees) candidate, but it’s almost too nice. I paid €500 for the car, then changed the front brakes (discs/pads), tie rod ends, front tires, motor oil(+filter) and had it aligned. Preventively did the airfilter, interior filter and spark plugs as well. Other than the little dent in the back it’s a perfect-ish car now. For less than €1k I’ve got a car that will never depreciate and still has a lot of life left in it. I really don’t see why I’d spend a few thousand a year in depreciation and increased insurance cost alone for a new but boring commuter.

acs335i > Chairman Kaga 01/26/2016 at 17:34

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Lease new, buy used

Chairman Kaga > duurtlang 01/26/2016 at 17:40

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While I was in graduate school in Leeds (2003-2005) one of the guys in the adjacent flat had a 406 coupe. I didn’t get French cars AT ALL until I’d taken a ride in his. Although my eyes weren’t truly opened until I got to experience a DS.

krhodes1 > Chairman Kaga 01/26/2016 at 17:44

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All I can say is meh. While I was growing up and paying my dues the first 20 years of my career, I bought MANY a $5-10K used car. Wrenched on them myself, had fun with both driving them and fixing them. Now firmly in middle age, I still do it - I have the best $5500 15yo Range Rover the world has ever seen. But I have also bought two brand-spanking shiny new BMWs in the past 5 years, and a new Fiat Abarth in-between, and a new Saab 9-3SC (admittedly for $13K off retail) before that. Because once you can afford to very comfortably buy whatever you want, you buy whatever you want, exactly the way you want it. The first new BMW is a 2011 328i wagon, RWD, 6sp stick - in a special order only color combination. Go find one used. Yeah, that’s right, there aren’t any for anything resembling a reasonable price compared to what I paid for it new, with European Delivery. I plan to keep it so long that the depreciation is just a distant memory. The second is an M235i. Also RWD, also 6spd, with no sunroof. Similarly, find one of those used, I’ll wait. And it will be a REALLY long wait to get one for $15K. Also Euro-Delivered, which is quite difficult to do on a used car. The experience of driving YOUR shiny new BMW (built to your spec, just for you) on the Autobahn and through the Dolomites is well worth the depreciation cost. Probably won’t keep this one more than 3-4 years, then get something else fun to replace it. Might be new, might be used, doesn’t much matter to me.

Ultimately it comes down to "can you afford it"? There were times in my life where I couldn't really afford a $1500 car. Today I could probably afford a $100K car if I really, really wanted to and were willing to give up some other hobbies and go down to having only one or two cars instead of four or five. I find $50K to be the point of diminishing returns. I see no point in the 5-series over a 3-series, or an M4 over my M235i for example.

One tip - skip having kids. As I pointed out to one of my co-workers when I bought the Abarth having just bought the 328i a year or so earlier - a 3-series costs about one year of tuition at a private college, the Fiat costs about one year of tuition at a state college. He has three kids - do that math and faint dead away. Much more fun to be the cool uncle with all the great cars.

krhodes1 > Master Cylinder 01/26/2016 at 17:50

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The main thing you get with a new car is that you get exactly what *you* want. Not somebody else’s sloppy seconds with unknown maintenance and hooning history. Not as important if you are buying a Honda Civic that comes in four colors, three trim levels, and two options, but becomes increasingly relevant when you get into things like BMWs that come in literally millions of combinations that don't suffer abuse and neglect well. Even if the most common is white, silver, or black, on beige or black, AWD, automatic, with premium package. The dealer special!

Chairman Kaga > krhodes1 01/26/2016 at 17:55

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Except you’re more what we aspire to be... Although I’ll be honest with you. If I land this new job and within two or three years I’m making twice my current income, I’ll probably still just get a GTI... and sell my GTV6 to get a 2000 GTV.

And I already have two kids. Four and two. Both girls. I’m screwed.

krhodes1 > Brian, The Life of 01/26/2016 at 17:58

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My house has doubled in value since I bought it in 2001. But on the other hand, I have spent $45K in real estate taxes, and another $65K+ in repairs, maintenance, and upgrades, and an amount in interest that I prefer not to think about. None of which really did more than maintain the value. And I still need to spend $15K+ having the driveway dug up, drainage fixed, and repaved in the next year or two. And then $12K to have the garage re-sided. and on, and on, and on. Houses are a lousy investment, but I couldn't find an apartment with a 3400sq/ft garage. :-)

Master Cylinder > krhodes1 01/26/2016 at 18:01

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True. I tend to modify cars much more extensively than the average buyer, and I tend to prefer simpler, more stripped-down cars, so that kind of stuff doesn’t matter to me all that much, although certain options are desirable in some cases.

But yeah, there’s no better way to get what you want then buying new if you have very specific criteria.

Manwich - now Keto-Friendly > Chairman Kaga 01/26/2016 at 18:12

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$15,000? I’ve never spent more than $5700 (included tax/registration/safety/etest) buying a car.

And buying a really high powered car when you do a lot of stop and go driving is senseless. A lower powered car actually works better in daily-driving traffic.

It’s more fun to drive a slow car fast given the reality of speed limits and traffic.

Brian, The Life of > krhodes1 01/26/2016 at 18:16

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I’ve spent less than $10k in maintenance (house was built in ‘35), roughly $6k/year in property taxes, a good chuck on interest - my guess is roughly $30K/year, and (on paper) my house has gained over $100k/year in value. Like I said, your mileage may vary, but I’ll take that kind of annual return any day. Especially when I write off the mortgage interest each year.

Manwich - now Keto-Friendly > Party-vi 01/26/2016 at 18:19

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The first problem is dealership pricing. Once the BMW is out of warranty, you look for an independent specialist. It will still be expensive, but not as expensive.

Second problem... it’s a BMW. There is no such thing as a cheap BMW. You either pay more when you buy it or you pay more fixing it.

Third... the only way to make BMW ownership cheaper is if you buy one and once the warranty ends, start doing at least some of your own wrenching.

But I’d like to reiterate... there is no such thing as a cheap BMW.

Chairman Kaga > Manwich - now Keto-Friendly 01/26/2016 at 18:21

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I actually miss my ‘07 Fit base with the on/off clutch for that very reason.

Although I will say that the CRV is horrendously sluggish to the degree that merging or passing is exciting, but not in a good way...