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Science of buying a New Car (concluded with a Rant)
For years I have bought cars using an Excel spreadsheet and am convinced that it has saved me from several expensive mistakes. If anyone is interested I finally wrote about it on my blog:
http://www.dotnetworkaholic.com/
If anyone spots mistakes or improvements then I'd be interested to hear back.
| | Reply » Science of buying a New Car (concluded with a Rant) |
Quote: For years I have bought cars using an Excel spreadsheet and am convinced that it has saved me from several expensive mistakes. If anyone is interested I finally wrote about it on my blog:
http://www.dotnetworkaholic.com/
If anyone spots mistakes or improvements then I'd be interested to hear back. | After reading your website & Excel spreadsheet, I still don't get it. You know I'd rather to drive a BMW over Mazda Miata for several reasons:
1) BMW has a lot of safety features...better than Miata.
2) BMW is fun to drive. The "fun factor" is about the same as Miata, I think.
3) Of course, the cost of owning a BMW cost more than a Miata. By spending extra money on an expensive car could also mean that you'll have a better chance to save your life from serious accident. To ride in a safer car is important to me. Trying to save money in owning a car isn't important to me. Life is far more valuable than trying to save money.
I, myself, don't like Accords and Camrys. There are TOO MANY Accords and Camrys on the road, especially here in Southern California. It's almost like living in a Communist country where most people drive same brand cars. I was in London the other day and I've seen lots of people driving their Vallux (spelling?). They all look the same to me.
So, if you feel that you made the wise decision in buying a car...cheaper to own, cheap on gas, cheap to maintain, etc, and you're worried about your retirement plans...maybe you shouldn't get a BMW?
Live your life right now is important...and don't worry too much about your retirement stuff. Life is too short, you gotta do something for fun. Go out and play with your kids (if you have them). They are precious to you.
-madmax
| | Reply » Science of buying a New Car (concluded with a Rant) |
I'd be very surprised if you could sell a base 325i for 74-to-76% of original cost after three years.
Your tire costs seem to be off? $400 for a 325i set? That's closer to the price of one run-flat but is almost right for Falken Azeni's for a Miata.
You also assumed quite a bit of driving distance (4 major services in 3 years?). But this is not an "error." Same deal with Sales Tax (8.25% where I live, must be 5% in Atlanta?). Same deal with vehicle registration (many places insignificant, in CA it is something like 0.8% of current value per year).
| | Reply » Science of buying a New Car (concluded with a Rant) |
Car buying is mostly an emotional purchase, no matter how scientific you want to make it out to be.
Used is almost always the better way to go about purchsing a car.
IMO a car note is way a of life now for 90% of the population (some don't need one and pay cash, some can't afford a car payment so they buy as cheap as possible). I am not opposed to leasing a car as I once was. I hate being upsidedown in a car loan which is what most people will be in the first 3-4 years of a car loan (assuming that most people are geeting a 5 to 6 year note).
By your logic we should buy a Kia or a Hyundai b/c in your words they are just as reliable as any other car out there (I highly disagree with this) and put the rest of your money into retirement. I agree with saving for retirement (most people on this website won't get anything from Social Security and most companies now don't offer a pension so retirement is now YOUR responsibility). However, I believe in "Carpe Diem"- tomorrow isn't promised to nobody, live today like it is your last.
| | Reply » Science of buying a New Car (concluded with a Rant) |
Direct link to the post is here:
http://www.dotnetworkaholic.com/NON+TECH+Science+Of+Buying+A+New+Car+Concluded+Wit h+A+Rant.aspx
Penforhire:
You are correct on the price of runflats; I was still using the cost of tires for my E46 ($80 each from tire rack + about $100 fitting). It will not make much difference to the cost/ month though. Bridgestone Turanza EL42 RFT are $165 each right now, but in two or three years when we'll need replacements I'll bet the price of runfalts has fallen significantly.
As always there are details that I did not explain for sake of brevity. If you click on the resale % you'll see it is one figure divided by another. Generally the residual is from kbb + a fudge factor to make up for inflation.
As for 74-76%: My current car ('03 Sedan with 39K miles) will be sold this month for I expect to see an easy $21,000 (cheapest other '03/'02 5sp in the local autotrader is $25K and is an '02 with more miles).
Kbb says my car is worth more but I tend to do easy quick sales and almost always the first to see buys. I paid $25,500 + 5% tax in 2003 ($26,775) so the final percentage is 78.4%. Used buyers want all the extras (for free), but apart from with nearly-new cars most buyers prefer the cheapest car in the best condition. $21K will buy my three year old 325i with under 40Kmiles or a five year old car with 70K or more miles; it is often a no brainer.
Different states and countries have different rules and the spreadsheet can be modified accordingly. Probably the relative costs will be close.
All in all it proves how cheap BMW ownership can be.
madmax1: It is Vauxhall and most are company cars driven by sales reps. Competent cars but boring. You may have missed the point of the post, I was trying to get people to 'Think before the leap' into ownership of a shiny new car.
| | Reply » Science of buying a New Car (concluded with a Rant) |
I also made a spreadsheet similar to yours. I compared cars like a Mini, Mazda3, E90 330i, etc, to just keeping my old E36. It was very informative, because when you realize that a $27k Evo costs the same to own over 3 years as a new $40k 330i, it helps you realize the car is not a bargain. Keeping my E36 was the cheapest option, one I strongly considered.
But like these guys said, when it came down to it, I bought the car that fit me the best, even though it was fairly high on the list for cost of ownership.
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Science of buying a New Car (concluded with a Rant)