BMW7_LS430

Hello friends. Here is how I calculate my bottom-line to own my vehicles.
Numbers are a sample only and you can change variables.
Constant depreciation rate is assumed.
This helps me not make hasty car buying decisions.

Legender

And that...boys and girls, is why I never buy new cars... only used ones.. and there is no better value than purchasing a used LS430 for around $10k with 100k miles on it. All the same amenities and plushness as when it was $60k plus brand new... yet a fraction of the cost... good info and just supports my current philosophy... humble as it is...

Sentinel

I like the idea but I dont follow the methodology. Where are the car payments or do you assume cars are bought cash up front? Maintenance seems low/repairs seems low. Depreciation isnt realized until you sell or trade the car if you never do then?

I have bought new and used. I dont care for having a car out of warranty I dont like dealing with mechanics there is some quantifiable value to just dropping the car of and saying fix it.

Ill probably do certified used going forward.

Sentinel

Conceptually how do you account for the cost of vehicle if comparing something you own already vs buying new?

If I follow the logic of that sheet all it really tells you is that you are always better off keeping your old car then buying a new one..... And you are always better buying a used car vs a new... It seems the only question is comparing new vs new or used vs used

BMW7_LS430

Idea is to understand total cost of ownership. Some people are worried about gas mileage so much that they ignore that fact that incremental cost is just a small fraction of overall cost of ownership.

As far as owing the vehicle outright, you have to consider cost of opportunity...meaning how much annual return you would have made on the money if you had not bought the car but invested somewhere else. Even 5 year CD at 2% means some cost of opportunity.

Sorry, I don't subscribe to concept of car payments. I did that only once when I had no money but needed a car.
Now I make ca decision whether to finance it and invest money somewhere else or buy it outright.
It makes no sense to me to buy top of the line luxury car with car payments. Sorry if I hurt any feelings.

Sentinel

Ah gotcha no hurt feelings. Just understanding the thought process. I see your point on gas mileage i have done similar math but I drive a lot of miles.

I dont subscribe to committed relationships but im in one.

Jabberwock

1. It is almost always less expensive to maintain a reliable used car then it is to buy a new car.

2. A car depreciates every single month that you own it, and the more miles you drive it the faster it depreciates. For most luxury car owners the monthly depreciation costs outweigh all other costs.

3. For most folks owning a modern day average reliable car, the cost of depreciation, and for those stuck on the "easy payments" treadmill to the poorhouse, financing far exceed costs for gas and maintenance.


I agree with upline poster that purchasing a older LS430 with semi high miles (like 100-150k for under $10-12k) is likely an excellent low cost way to drive a luxury car with very little depreciation costs and low cost maintenance because the LS430 is super reliable if well maintained.

SC400-V8

iTrader: (1)

Even better, just stalk the Internet for 3-6 months until you find one with 25-60k miles and buy it for about 3-4k more. Best value ever... Often the super-low miles don't fetch much of a premium when the car is 10 yrs old.

I just did that myself

BMW7_LS430

Yes, I agree with that approach and it helps sell the car as well if you have to just within a few years as it is still a low mileage car.
I do believe that low mileage is not indicator of reliability but majority of average buyers do.
As an added benefit you get close to new interior with a low mileage car purchase.

warminwisc

I usually buy cars 4 years old with 30-60k with some type of power train warrantee. This seems to put them at about 1/2 price luxury cars usually less(now days this segment is tight people keep em or sell to buddies). some cars with 0 financing are best bought new, Subaru Outback for example, Highlander maybe cars in demand. There is nothing like being the first owner, though I would not know.

jayclapp

My 04 UL is the first used car (21,000 miles in 07) I ever bought in my life. It's also the best car I ever bought in my life. I'm now 74.

Jabberwock

Agree on used cars being potential great buys.

New car depreciation on new luxury cars is huge for almost every brand over the first 3 years.

Buying used takes a lot more work than buying new, but buying used luxury car in great condition is the way to go if you want to save some money for other toys and hobbies.

BMW7_LS430

I have assumed flat rate of depreciation in my original post but in reality even the rate of depreciation drops as vehicle ages. See chart below.
You are not only saving because of the lower purchase price but also lower rate of depreciation at later stages of life of a vehicle. Buying a vehicle in a great condition is a key though.
Don't just fall in love with a color combo.

AJT123

Lol I agree, my car (04) still drives and looks new inside and out. It's just old. But it still feels like a precision engineered $60,000 machine. Even with almost 100k. The joke is on everyone else. I paid $16,900 for a $60k when new car that I still plan to get over 150k miles out of total. (I bought it with 75k a year and a half ago and plan to drive it to AT LEAST 225k). And I'm quite confident it will last that long with minimal (if any) issues. I see others with 200k+ miles FOR SALE (not in the junkyard lol) all the time.

I'd venture to affirm the view that the Lexus LS is probably the most reliable ever built.

warminwisc

The high quality of the build lends to very usable parts from salvage yards if it ever does break.