Ask HN: To those who spent big bucks on a luxury car: Was it worth it?
We're in the Bay Area (for work) and drive a 12 year old hybrid car. Will be moving out of US in a couple of years.
We're on the fence about spending around $50k on a luxury car that will lose about 30% value by the time we sell.
Want to get a feel of what its like from those who've gone through this. Was it worth it? Regret it? Did you choose to spend it elsewhere and did it turn out to be a good/bad decision?
Never purchased a luxury car myself, but I know people who have.
Things to consider - the "happyness" or "newness" will wear off and it will become the new normal.
It might make you less happy in the long run as you have to be paranoid about where you park, how you drive etc, as a scratch is more of a disaster on an expensive car, both in terms of cost of fixing and the dent in your pride :-)
Owner of severely dented run of the mill Toyota here. Where I live: been hit and run dented this year, then the hire car I used while that was being repaired was hit and run dented. Out of pocket $3k, and yes I had insurance and I got the excess reduction on the hire car :-( /rant
Having said that if $50k is a drop in the ocean, then why not. But if it is a choice between the car and some kind of investment I'd prefer the investment.
Total waste of money. I've had luxury cars a bit above 50k, more like $75k. Leasing is your best option for 36 months because you'd be paying the depreciation of the car. Loan or lease it's pretty much equals after 3 years. But with a lease, you're not in debts forever and stuck with a huge depreciating asset. Buying is insane because you're looking at a huge down payment (like putting a pile of cash in a trash), very big monthly payment, expensive insurance and since you're in beautiful California, a big yearly registration fee. I call it the CA car tax. In 3 years from now people will literally lowball the hell out of your car to help you get rid of it because you're a private party not a dealer. On the other hand, dealers will lowball even more! They need to make a margin re-selling your car so you're not in for a 30% loss, more like 50%. If you think private parties buy used cars for 30-40k :) you'd be foolish. Again, it's California, what's the point? They would just get a brand new car since anything is financially possible when it comes to debts in CA.
so yeah, lease.
Add up gas (CA prices are laughable), then you're in for a LOT of money. Not just 30%... If I were to do it again, unlike most of the people, I'd actually buy an OK used car (2-3 years) which already took a hit in terms of depreciation, then I'd keep it for 3-4 years. You could get something descent for $25-30k. The loss between 3 to 6 years is usually smaller than a loss from 0 to 3 years. Audi's keep their value high, don't buy infinity or Lexus, with $50k and above, go for a car that has a whole community around it like an 'R' or 'GTR' or 'M', things like that because again, people want those car badly and would do anything to get one cheaper than brand new. Don't buy a standard BMW's because you can't bit BMW dealership in terms of rates, etc. They will always come up with a much better car/deal than you when you're ready to sell. Again, people would rather buy new and at a dealership and get a quick and easy loan going with a low rate.
Leasing was my first choice for the same reasons as you pointed out. However the work visa limits my lease period to 24 months and that drives the monthly lease to around the $700/mo range (not including insurance/gas/maintenance) that adds up to roughly 20k with taxes and fees.
For the same $45k Merc that I am looking at, the 2016 model is up for sale around $28k - $30k. That gave me the impression that I am in for around a 30% hit if I kept it in good condition. Good point about the low balling dealers and the "California debt" factor, I did not look at it that way.
So I'm looking at a price tag of around $30k. Add in insurance, gas and parking.
BMW 3 series is not for me. Too small, stiff ride, not plush enough. 5 and X series lease (for 24 months) is actually higher than entry level Mercedes which I felt was a lot nicer for a little more money.
Also - for a new new cars - check Costco Auto program - they arranging amazing deals for new cars (at Dealers invoice price essentially) for Costco members.
>>> go for a car that has a whole community around it like an 'R' or 'GTR' or 'M', things like that because again, people want those car badly and would do anything to get one cheaper than brand new.
I'm in the same situation, I just have a lot lower budget and still haven't bought a car yet. Have you checked out used cars? It looks like most of the depreciation comes within the first few years. And if you are moving within a couple years I don't think mileage should be a concern if it's a reliable car with decent mileage. Finding a car with the options you want might be an issue though.
I was considering a Lexus CT200h, I really liked the car and prices were decent. The only issue was that I could basically only find base model, and I really want adaptive cruise control. So I don't think I'll get one.
You could also look into leasing. You might be able to find a great deal, https://forum.leasehackr.com/ has a ton of info. And there are some sites that let people advertise leases they want to get out of. Some have really low monthly payments. But that would make me a little nervous. I'd worry a little bit about additional expenses when turning the car in.
I've been lurking on https://forum.leasehackr.com/ for over a month. I've learnt so much about leasing. If you're reading.. thanks guys!
Well, the 24 month hard limit on the lease skyrockets the total amount as compared to 36 months. Plus I drive around 12k miles a year. Also, the visa situation right now makes me very uncomfortable around the 2 year commitment with no exit strategy.
- lease a car - especially that car that has low depreciation. The lower depreciation - the cheaper the lease. Sometimes it maybe cheaper to lease more expensive car because it has low depreciation.
- Buy used, in-demand car with very low mileage and 1.5-2 yrs of remainder of warranty.
Depending on your use case, the most luxurious thing you can do is Uber everywhere. Maybe not quite yet price-viable for a daily commute, but I've been working remotely in LA and have had a great exp basically depending entirely on Uber.
You eliminate all the hassles associated with having your own car and free yourself up to actually utilize the drive time doing something. It's also a highly efficient way to socialize with strangers (if you use Uber Pool) which has been an unexpectedly pleasant benefit.
Agree with others saying leasing is the best way to fix costs. I've also had a great experience running an old Merc. I got 1999 soft top CLK back in 2011 with 63K miles. It's now done 110K. Nothing has gone wrong, so I've done ~50K miles on routine servicing only. Merc have always claimed a low TCO, and my experience has borne that out. So I say get a 10 year old hi spec Merc for low cost luxury motoring.
Unless you are looking to pull chicks just buy the cheapest car you feel comfortable driving.
If you really want to know if buying a luxury car is worth it then hire the car of your dreams for a week and see if the value provided is worth the cost.
Buy an older used luxury car. That way you can save some money, potentially a lot of money (Depreciation can be very cruel for some but cool for others).
Things to consider - the "happyness" or "newness" will wear off and it will become the new normal.
It might make you less happy in the long run as you have to be paranoid about where you park, how you drive etc, as a scratch is more of a disaster on an expensive car, both in terms of cost of fixing and the dent in your pride :-)
Owner of severely dented run of the mill Toyota here. Where I live: been hit and run dented this year, then the hire car I used while that was being repaired was hit and run dented. Out of pocket $3k, and yes I had insurance and I got the excess reduction on the hire car :-( /rant
Having said that if $50k is a drop in the ocean, then why not. But if it is a choice between the car and some kind of investment I'd prefer the investment.
I am already careful (what SO likes to call 'paranoid') about where I park, how I drive etc I imagine its just going to get worse.
I feel ya about the dual hit and run man.
so yeah, lease.
Add up gas (CA prices are laughable), then you're in for a LOT of money. Not just 30%... If I were to do it again, unlike most of the people, I'd actually buy an OK used car (2-3 years) which already took a hit in terms of depreciation, then I'd keep it for 3-4 years. You could get something descent for $25-30k. The loss between 3 to 6 years is usually smaller than a loss from 0 to 3 years. Audi's keep their value high, don't buy infinity or Lexus, with $50k and above, go for a car that has a whole community around it like an 'R' or 'GTR' or 'M', things like that because again, people want those car badly and would do anything to get one cheaper than brand new. Don't buy a standard BMW's because you can't bit BMW dealership in terms of rates, etc. They will always come up with a much better car/deal than you when you're ready to sell. Again, people would rather buy new and at a dealership and get a quick and easy loan going with a low rate.
For the same $45k Merc that I am looking at, the 2016 model is up for sale around $28k - $30k. That gave me the impression that I am in for around a 30% hit if I kept it in good condition. Good point about the low balling dealers and the "California debt" factor, I did not look at it that way.
So I'm looking at a price tag of around $30k. Add in insurance, gas and parking.
Wow! Just Wow!
+10
I was considering a Lexus CT200h, I really liked the car and prices were decent. The only issue was that I could basically only find base model, and I really want adaptive cruise control. So I don't think I'll get one.
You could also look into leasing. You might be able to find a great deal, https://forum.leasehackr.com/ has a ton of info. And there are some sites that let people advertise leases they want to get out of. Some have really low monthly payments. But that would make me a little nervous. I'd worry a little bit about additional expenses when turning the car in.
Well, the 24 month hard limit on the lease skyrockets the total amount as compared to 36 months. Plus I drive around 12k miles a year. Also, the visa situation right now makes me very uncomfortable around the 2 year commitment with no exit strategy.
- lease a car - especially that car that has low depreciation. The lower depreciation - the cheaper the lease. Sometimes it maybe cheaper to lease more expensive car because it has low depreciation.
- Buy used, in-demand car with very low mileage and 1.5-2 yrs of remainder of warranty.
You eliminate all the hassles associated with having your own car and free yourself up to actually utilize the drive time doing something. It's also a highly efficient way to socialize with strangers (if you use Uber Pool) which has been an unexpectedly pleasant benefit.
If you really want to know if buying a luxury car is worth it then hire the car of your dreams for a week and see if the value provided is worth the cost.