The Money Mustache Community
Learning, Sharing, and Teaching => Ask a Mustachian => Topic started by: Portland Man on June 01, 2012, 11:17:10 AM
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Hi, long time reader, first time poster...
Today's triple M article made me think of the things I already own, and whether or not it would be worth getting rid of non-mustachian stuff, multiple high-end bikes, for example.
The biggest item we have that falls in that category is a 2004 BMW 325i wagon, we paid $14k for it a couple 2.5 years ago, we could probably sell it for ~$13k right now (it's a stick). It gets 28mpg hwy/24 mpg city. I think our annual mileage is around 6-8k miles.
The man with the 'stache says "you can't afford that!" And he's right. When we bought it we had a significantly higher income (wife quit her job when we had our kid), but now - ... it doesn't really cost us anything. Opportunity cost of ~ $7-8k compared to buying something that we "can*" afford today, additional fuel costs of ~$300 per year.
How Antimustachian is it to keep such a frivolous car? I plan to retire in ~20 years, $7500 could grow to about $22k in that time, which would cover 7 months of expenses at our current expenditure rate.
What say the masses?
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Trading down for something else seems like a painless way to make 8 grand to me. What's holding you back? Is there any reason you'd like to keep the car? Is it a luxury that's worth what it's costing you?
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A BMW will cost more to repair when the time comes. How do you feel about getting a Toyota Matrix?
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How Antimustachian is it to keep such a frivolous car? I plan to retire in ~20 years, $7500 could grow to about $22k in that time, which would cover 7 months of expenses at our current expenditure rate.
I guess the question would be how much pleasure does this car give you. Some people truly love their cars, and that's definitely worth something. I enjoy being in other people's nice cars and sometimes feel tempted to get a sweet, quiet ride with a great sound system, but the temptation always passes. Unless you have a strong emotional connection to this car, you probably wouldn't regret trading down.
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Only a couple things tie me to the car -
We looked for it for a long time (e46 5 speed wagons are rare), and it's the car I wanted.
It serves our needs well. It's got low mileage (much lower than a $5000 Toyota), and it doesn't cost much more to operate than a cheaper ride.
I don't really feel like dealing with buying/selling.
By the time it's "used up" - in 8 years or so, it'll still worth $4-5k and we'll have something like $10k in the car replacement fund.
It just seems to me that controlling recurring expenses is more important than long-term expenses. I know that with cars MMM recommends buying for price, reliability and economy. This car is decent for the second two, and factored over 10 years the difference between $14k and $5k is only $75/month, less than most people spend on their lunch.
edit - one other thing I like about the car - when we were shopping we were looking at subarus, mazda 3s and maybe a newer honda fit, but subarus and mazdas of a similar vintage go for about the same as we paid for the bmw... they have great resale, bmws have shitty resale. "Oh, it's the cost of maintenance" Only kind of, the cost of maintenance on some "luxury" vehicles is greatly overstated. My folks spend more on that Subarus than we do on our bmw (love those boxer headgaskets, yeah?)
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Sounds like you've already made your decision.
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Sounds like you've already made your decision.
I have, but it's fun to second guess, play what if and discuss stuff.
Playing around with excel, $7500 in my pocket today is roughly equivalent to $50/month for the next 20 years. We are generally pretty stoked when we eliminate $50/month, so maybe it is worth it.
That's also 10 months worth of savings in our main account... moving us into a new house that much sooner.
Oy, we could also stop putting money into a car savings fund pretty much altogether (add $70/month to general savings) because we would already have the dough in there for the next 2 cars...
I do like that car though.
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Sounds like you've already made your decision.
Second this. You seem to agree that judged on a strictly financial basis you are foregoing value and accepting a smaller stash/later retirement in exchange for the pleasure of driving this car. I'm not sure we validate that this is the "right" choice, as it's based on personal preference.
Edit: Calculating how long this choice is delaying your retirement or other investment goals might give you another way to measure the value foregone against your love of the car.
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Is it a 325xi or just a 325i?
If it is a 325xi, you must sell it (to me)!