Fancy car - massive depreciation - decision time

[MountainLion]

So, I have a 2014 BMW 750i, and my wife has a 2017 Audi Q7. We bought both cars with cash and those cars were meant to be a reward at this stage of our life. Both of the cars are pretty awesome.

Recently I had to replace the performance run-flat tires on my BMW and the total cost including tire rotation was about $1,600. Those new tires are good for only about 30,000 miles.

Anyway, my BMW, while a fine car, doesn't really excite me that much at this point. People compliment me on it, and it is nice to have the valet part in front at the restaurants, but still, I mostly use it to go back and forth from work and haul the kids around.  My wife's Audi Q7 is more practical, but I'm sure once I get into tires and out of warranty, that thing will be super expensive to maintain.

Maintenance is one though, depreciation is another. I went into these purchases knowing the depreciation of cards like this. I went in with my eyes open. Also, it is a small faction of our net worth, and we have no debt.

Still, lately the fact that my BMW depreciates at a rate of nearly $1,000/month  + the high maintenance (post warranty - which is soon to come) is really bugging me. I'm starting to look at a Toyota's again (I could use an SUV myself).

Still, I ask myself, you can afford this car, so why is the fact that that the depreciation cost is high bothers you so much? I didn't buy the car based on low depreciation, I bought it because it was a hot looking car! Granted, I don't need 450hp.

Anyway, I'd be curious if anyone else went through this - you can afford a nice car,  you know the depreciation is a killer, but you enjoy having nice car.

Or would everyone in the MMM land just opt to get rid of the car and get a used Tesla or a new Volt? (A bike won't be an option).

MountainLion

[Mgmny]

Why don't you get a used Aston Martin or some other ultra luxury/sports car (bentley, rolls royce, etc) from the early-mid 2000s? Much less depreciation and a super cool car!

[Mgmny]

Looks like you can get a 2005ish RR Phantom for about the same (even less!) price as a new 750i, mid 2000s Bentleys can be had for like 50k easy, 2010 aston martin for about $50k as well.

THOSE will be cars that will be cool to park with the Valet.

[DarthCreationist]

Anyway, I'd be curious if anyone else went through this - you can afford a nice car,  you know the depreciation is a killer, but you enjoy having nice car.

Or would everyone in the MMM land just opt to get rid of the car and get a used Tesla or a new Volt? (A bike won't be an option).

Buying a Tesla will be pretty much the same story financially imho (especially if you consider the tires again). But I would go for that if money would no longer be an issue. I am driving an e-Golf and it's the first car I still enjoy every day after two years. It is still a special car, with so few electric cars around.

And in case of the Tesla, it's also a show-off, which I understood is not unimportant to you. ;-)

[Laura33]

Still, I ask myself, you can afford this car, so why is the fact that that the depreciation cost is high bothers you so much? 

I can afford a lot of luxurious things.  That doesn't mean I buy them all.  I try to focus my splurgey spending on things that are meaningful to me.  If some part of owning this car is causing you niggling concern instead of joy, then maybe that's yourself telling you this particular splurge isn't worth it.

I think your language is telling -- you said you enjoy "having a nice car"; you didn't say you enjoy driving your car.  Sounds like you enjoy the feeling you get from owning nicer things than the people around you.  IME, the boost you get from impressing other people with expensive stuff doesn't tend to be satisfying long-term.  Someone will always have better, newer, cooler; and yours will lose its shiny luster; so you have to keep upgrading to regain that feeling.  This is the very definition of the hedonic treadmill.

Don't get me wrong -- I am a car guy; I own a completely unnecessary and impractical third vehicle, and I am even considering upgrading it for an even more expensive and impractical one.  I know that goes entirely contrary to the MMM ethos, and I don't particularly care.  Because, damn, the feeling of downshifting into a corner, the happiness from doing my commute with the top down -- that car brings me moments of pure, visceral joy, every single day I drive it. 

But the value I get from that car has nothing to do with what status it gives me in other people's eyes.  The reality is that most people whose opinion I value would think less of me for having such a frivolous toy -- assuming they waste any time thinking about things like that at all.  OTOH, sure, maybe some people may think I am cooler because I have that car [break for hysterical laughter].  But, you know, those aren't the kind of people I care about impressing anyway.   

[Slee_stack]

I sold off my 'nice' car because the depreciation each month made me sick to think about.  I bought it used for $48k.  The most expensive car purchase I'd ever made (and hopefully ever will) .

Even though it was 'affordable' to us, and wouldn't significantly impact our FIRE plans, I didn't feel I was getting the emotional 'return' of that monthly depreciation cost.

I felt SOOO much better once it was gone!  Beautiful looking and driving vehicle, but SO not worth the $500 - $600 per mo depreciation.  I could get way more fun/satisfaction out of $500 - $600 a month!!.

Our current (2) vehicles combined cost us $27k up front.  Their combined depreciation is a 1/4 of what the above vehicle was, and the thought of it doesn't make me sick anymore.

I still waste money everyday...but I get far more overall satisfaction back.

I have a hard time appreciating others' new car purchases...mainly because I can't help but think of the depreciation cost that many probably don't truly understand.

[mwulff]

We drove BMW's up until the Tesla was released. Then we switched and never looked back. The depreciation is probably less with the Tesla, and tire consumption is better.

Also the work needed on a Tesla is much less and service costs are known in advance.

If you can afford it and enjoy driving in luxury then a Tesla 75D is a great choice. Or a pre-owned S85 (RWD) or an 85D.

Just make sure that you get an autopilot enabled model.

But on the other end of the spectrum I sometimes look at the Tesla and wish that I was driving an old beater. Just so I didn't have to worry about scratches, dings and dents.

[2Birds1Stone]

Yikes! That is a nice car indeed, but that depreciation makes me squirm.

I thought I was being savvy last year when I purchased a preowned Infiniti G37 Sport, with all the options, 6 speed manual, sport package, etc etc.

The car stickered almost $45k when new. I paid $17k w/ 21k miles on the odometer.

The thing has managed to depreciate $2700 in 14 months already!! That's just under $200, but significant enough to make me question my choice lol.

Best of luck with whatever you decide, a nice 10 year old luxury car can be found for pennies on the dollar. Just look at all of the 2003-2010 BMW 750's on Craigslist/Ebay.

[MightyAl]

I had a couple germans hit me hard too.  My wife had a Q5 that we lost $6k on.  It had the direct injection V6 and had to have an engine out service for the exhaust air injection ports.  It was covered by warranty from audi but really made me cringe.  I had an e46 M3 that I loved but sold it and lost $8k on that one.  I plan on buying another and never selling it.  That was the best car I ever had.

We now have a pair of Toyotas.  A brand new camry and a ten year old sienna.  I use the van as a carry all and family mover.  Built my screened in porch hauling all the materials in the van.  I have also discovered my real love of cars is working on them. 

[MountainLion]

Still, I ask myself, you can afford this car, so why is the fact that that the depreciation cost is high bothers you so much? 

I think your language is telling -- you said you enjoy "having a nice car"; you didn't say you enjoy driving your car.  Sounds like you enjoy the feeling you get from owning nicer things than the people around you.  IME, the boost you get from impressing other people with expensive stuff doesn't tend to be satisfying long-term.  Someone will always have better, newer, cooler; and yours will lose its shiny luster; so you have to keep upgrading to regain that feeling.  This is the very definition of the hedonic treadmill.

Bingo - you nailed it. Thanks for the helpful feedback!

[euphoria]

 You ever heard that saying "you are who you hangout with" when you start hanging around the MMM community.. You start to feel bad about things you like that don't resonate with the teachings. For example MMM said he likes to have a luxurious house just because thats what he enjoys. If you get happiness from cars and can afford it why get a toyota? Keep that paid for beamer that has badass 450hp!! Be yourself man. When the shit is old and deprecated buy a newer one if you can afford it and its a small % of your net worth. Some people spend money on wine, season tickets, TV's, houses. I spend mine on german cars! We're all different! What I've learned is to take pieces of information that you resonate with and build your own life based off what you feel is right. PEACE

[mistershankly]

I owned a CPO convertible 650 and it was awesome to drive.  However, I promptly sold it once I found out that a failed transmission would cost $18k to replace out of warranty.  Current BMWs are made to last the life of a lease (36 months) and anything after that they are a ticking time bomb ready to go off.  I recommend selling the 750 and moving on.

[Rosy]

You ever heard that saying "you are who you hangout with" when you start hanging around the MMM community.. You start to feel bad about things you like that don't resonate with the teachings. For example MMM said he likes to have a luxurious house just because thats what he enjoys. If you get happiness from cars and can afford it why get a toyota? Keep that paid for beamer that has badass 450hp!! Be yourself man. When the shit is old and deprecated buy a newer one if you can afford it and its a small % of your net worth. Some people spend money on wine, season tickets, TV's, houses. I spend mine on german cars! We're all different! What I've learned is to take pieces of information that you resonate with and build your own life based off what you feel is right. PEACE

My thoughts exactly. OTOH - if you have now reached the point in your life that you would rather have an SUV/Toyota then go for it. It is all good - if depreciation keeps you up at night, then this car is no longer giving you joy.
Be yourself - if the car lost it's appeal, sell it. If deep down you really want to keep it and you already know that you can afford it - keep it. It is your life.

[Tetsuya Hondo]

I traded a barely used Audi (although not quite 7 series nice) for a Toyota. I drive more sensibly now and I'm amazed at how cheap the thing is to run. If the kiddo spills milk in the back, I don't care. If it gets a scratch, I don't care. I don't think twice about where I park it. It's nice not to care. It's freeing.

Given that you sound like you're in a good financial position, have you considered a used Lexus? They will run forever, are an order of magnitude cheaper to maintain than a 7 series, and will still give you some luxury.

[Tyson]

It's the desire to present an image of wealth and success that you need to address. 

If presenting that image is necessary for your career then OK.  But if not, then just drop it.  I had to shift my thinking from "I've made it because I have a nice house and nice cars and clothes and etc...." to "I've made it because I have a lot of money in the bank".

It's hard though.  One thing that helped me, a lot was getting rid of cable.  I originally did it as a way to save $$, but the side effect has been that I get much less exposure to lifestyle-escalating messages. 

[ysette9]

You bought the car as a reward for yourself, presumably for the hard work you've done to reach this stage of your life. That means the car is supposed to bring you joy. If it isn't bringing joy, then by all means get rid of it and do something different that will bring you happiness. Maybe cars just aren't your thing. Maybe a great vacation? A nice tool for your hobby? Supposedly we are wired to get more satisfaction out of experiences, so maybe you can replace the car with something more functional and figure out an experience that you would give more lasting satisfaction.

[Retire-Canada]

I'm sure my truck had a massive depreciation curve when I bought it, but I paid cash and never thought about the cost again after the day I bought it. It meets my needs and I like driving it.

If you have an expensive car you are not particularly happy to own, maintain or drive it would be silly to keep it. However, before you jump into another potentially unsatisfying expensive vehicle it's time to analyze how you made this poor decision and how you are going to prevent doing it again.

[Freestyler]

Though I can’t relate a lot to some of the other things, I can relate to liking nice cars. I have always REALLY liked them. I have never had one though. And it’s been some time since I could afford one. It’s also been… forever? since everyone around me has a MUCH nicer car than me even though most of them can afford it much less than I can. In fact, I drive my wife’s old compact Toyota and I don’t really own a car anymore nowadays. I caved in and owned a sports motorbike for a while: very fond memories and no regrets. Not the same price tag neither.

I am pretty sure I would own or use very fancy cars if I really was megarich. Not being the case at present time the sheer thought of felling that I “have to work for my car” on those moments when I feel stressed out, down, trapped, stretched to the limit, etc. serves as a powerful deterrent. The fact that I am semi FI brings some comfort on those moments. I don’t think fancy cars would be worth losing that. Feeling that I have to sacrifice and stick out for my children? Not always great but my responsibility and worth it (no choice in any case). The same for cars? No thanks. 

[Freestyler]

Also, I am in eternal awe as to how trouble free the Toyota is, as someone also said.

[JLee]

I love cars.  I don't like losing money on them.

I drive a 1991 Toyota MR2 Turbo (paid $7k in May 2008..and too much in go-fast stuff since then) and a 2005 Lexus GX470 that's well past the vast majority of its depreciation curve (I paid $8150 in October 2016 - it was $46k new in 2005: $59k inflation-adjusted to today).  My GX has 182k miles on it and just today I was talking with someone who has 403k on his.

That way I get my fast car fix, my offroad-capable fix, and I'm not bleeding money from new-car depreciation.

[Villanelle]

The idea of "rewarding" myself with something that essentially steals $1000 every month from my retirement account does not compute.  I could never look at something like that as a reward.  In fact, it would very much feel like a burden rather than a boon. 

What do your FIRE plans and numbers look like?  Can you reframe the "reward" as being a used 2007 Civic, that "rewards" you with retirement 14 months earlier? (Or whatever you figures are.)  If it's about having a reward, looking at how you define that, and what kind of reward is more important--an earlier FIRE date, or a status symbol care that impressed people who know absolutely nothing meaningful about you--might help with this.

[chasesfish]

Why don't you get a used Aston Martin or some other ultra luxury/sports car (bentley, rolls royce, etc) from the early-mid 2000s? Much less depreciation and a super cool car!

I'm kind of in this same spot - If you want to "really" enjoy cars, why not go into the 10 year old market that's higher than a BMW.   I have a friend who's partially retired and loves cars, he always has one in his garage and usually makes money via geographic arbitrage.  He'll take two days off and buy a Ferrari from somebody in one part of the country and drive it to the southeast, get its maintenance right, then sell it after a few months.  He breaks even and enjoys having a Porsche, Ferrari, or Lamborghini in his garage.

[Morning Glory]

If you want to keep the car, you could get some different rims that fit on your car and take cheaper tires. My car (not a luxury car) came with fancy rims that took shitty low profile tires: they are expensive, wear out fast, and cause the car to fishtail in any kind of snow. My husband got me some normal rims (I think a smaller size) from the junkyard that fit on the car and can take normal tires: they last longer, are cheaper to replace, and perform much better in winter.  You could also start going to an independent tire shop instead of the dealership.

If you no longer love the car, just sell it and get something more practical.

[sequoia]

If you need SUV and Toyota, take a look at Land Cruiser or Lexus LX/GX series. I bet the maintenance cost is not nearly as high as BMW.

I own an older high miles LC myself and we really like it.