Want to trade car for Small SUV: Financially good, bad, wash
Want to trade car for Small SUV: Financially good, bad, wash
We have 2 cars, one of them is a 2008 BMW 3-series with about 40,000 miles on it. We are at a different point in our lives with a more "suburban" lifestyle, and kind of desire the utility of a small SUV. Plus my wife is quite short, so she likes the higher ride height as it helps her see.
So I'm considering trading the BMW for a new Honda CR-V or the like (Rav4, Forester, etc). Should all be around the same price point, probably $25kish OTD. Not considering any used cars or non-SUVs, otherwise we'd just keep the BMW.
I'm wondering if this makes much financial sense? Generally it makes more sense to drive a car into the ground, but what if it's a BMW? TBF, my car has been very reliable so far and has cost very little out of warranty. And a car like the CR-V has a reputation for being pretty cheap to own, and it's fuel economy is pretty good for a small SUV as well.
I'm just wondering from a financial standpoint this is a bad idea, or if it might actually be a good idea considering the BMW might start costing me a lot to operate, or it might just be a wash.
So I'm considering trading the BMW for a new Honda CR-V or the like (Rav4, Forester, etc). Should all be around the same price point, probably $25kish OTD. Not considering any used cars or non-SUVs, otherwise we'd just keep the BMW.
I'm wondering if this makes much financial sense? Generally it makes more sense to drive a car into the ground, but what if it's a BMW? TBF, my car has been very reliable so far and has cost very little out of warranty. And a car like the CR-V has a reputation for being pretty cheap to own, and it's fuel economy is pretty good for a small SUV as well.
I'm just wondering from a financial standpoint this is a bad idea, or if it might actually be a good idea considering the BMW might start costing me a lot to operate, or it might just be a wash.
-
- Posts: 18502
- Joined: Tue Dec 31, 2013 6:05 am
- Location: 26 miles, 385 yards west of Copley Square
Re: Want to trade car for Small SUV: Financially good, bad,
Consumer reports consistantly rates cars better for cost and reliability. However, BMW isn't exactly cheap to maintain (I've had a few of them).
Smaller SUVs, crossovers and "tall cars" are all melding together. One that's new in 2013 is the Subaru Crosstrek. We bought one to replace an Outback and I'll tell you that if you live in snow country, it'll outperform them all in snow with good snow tires. More clearance than a Jeep Cherokee. We get over 30 mpg with it, it's taller to see over cars like any SUV and in the limited version has a lot of good options like leather heated seats, backup camera etc.
Smaller SUVs, crossovers and "tall cars" are all melding together. One that's new in 2013 is the Subaru Crosstrek. We bought one to replace an Outback and I'll tell you that if you live in snow country, it'll outperform them all in snow with good snow tires. More clearance than a Jeep Cherokee. We get over 30 mpg with it, it's taller to see over cars like any SUV and in the limited version has a lot of good options like leather heated seats, backup camera etc.
Bogle: Smart Beta is stupid
Re: Want to trade car for Small SUV: Financially good, bad,
Thanks, cool looking car, but we live in sunny California, so probably don't need 4x4Jack FFR1846 wrote:Consumer reports consistantly rates cars better for cost and reliability. However, BMW isn't exactly cheap to maintain (I've had a few of them).
Smaller SUVs, crossovers and "tall cars" are all melding together. One that's new in 2013 is the Subaru Crosstrek. We bought one to replace an Outback and I'll tell you that if you live in snow country, it'll outperform them all in snow with good snow tires. More clearance than a Jeep Cherokee. We get over 30 mpg with it, it's taller to see over cars like any SUV and in the limited version has a lot of good options like leather heated seats, backup camera etc.
Re: Want to trade car for Small SUV: Financially good, bad,
Average wholesale for a 2008 328XI is about 15,000 in above average condition. Figure 25-30,000 for a replacement. My friend, who is a car dealer, says it's almost always cheaper to fix used than buy new. You need to decide how badly you want the suv and if it's worth the expense.
Re: Want to trade car for Small SUV: Financially good, bad,
Every analysis I've ever seen says it is cheaper to keep your old car than buy a new one and always cheaper overall to buy a used car rather than a new car. That's the financial side. But a happy spouse is worth a lot as well. If everyone was totally rational about automobiles, the car industry would be in trouble.
"Worrying is like paying interest on a debt that you might never owe" -- Will Rogers
-
- Posts: 49038
- Joined: Fri May 11, 2007 11:07 am
Re: Want to trade car for Small SUV: Financially good, bad,
you need an SUV for your wife. That's the first, and main point.countofmc wrote:We have 2 cars, one of them is a 2008 BMW 3-series with about 40,000 miles on it. We are at a different point in our lives with a more "suburban" lifestyle, and kind of desire the utility of a small SUV. Plus my wife is quite short, so she likes the higher ride height as it helps her see.
So I'm considering trading the BMW for a new Honda CR-V or the like (Rav4, Forester, etc). Should all be around the same price point, probably $25kish OTD. Not considering any used cars or non-SUVs, otherwise we'd just keep the BMW.
I'm wondering if this makes much financial sense? Generally it makes more sense to drive a car into the ground, but what if it's a BMW? TBF, my car has been very reliable so far and has cost very little out of warranty. And a car like the CR-V has a reputation for being pretty cheap to own, and it's fuel economy is pretty good for a small SUV as well.
I'm just wondering from a financial standpoint this is a bad idea, or if it might actually be a good idea considering the BMW might start costing me a lot to operate, or it might just be a wash.
A new SUV for a used BMW? The SUV will have lower maintenance bills, and if it's the Honda, OK gas bills.
Yes you take a depreciation hit on selling the BMer. But they are not cheap to own long term (expensive repairs). And you get a new car out of the trade. You are in effect trading 'down' (across really, but BMers are expensive).
I'd make sure I got an economical, reliable SUV (like the Honda) and go for it.
Re: Want to trade car for Small SUV: Financially good, bad,
Long term, I'll call it a wash. Way less maintenance cost for a more reliable car under warranty will be far less than BMW (repairs, oil changes, everything). You'll also probably save a decent amount on gas. Mileage might be equal or better on the SUV, and you won't need premium. I think it's close enough that if it makes sense for your lifestyle to have the extra space, you should do it.
An inconvenience is only an adventure wrongly considered; an adventure is an inconvenience rightly considered. -- GK Chesterton
Re: Want to trade car for Small SUV: Financially good, bad,
After owning several BMWs, i will say that owning one out of warranty is a often a very expensive option. On the other hand, I have gotten lucky as well. My advice is to get the honda.
Re: Want to trade car for Small SUV: Financially good, bad,
"A happy wife..." and all of that. Your BMW is six years old, and though it only has 40k miles, I would bet on some significant maintenance expenses. New car warranty, better MPG and little or no maintenance for several years. No, you won't come out ahead on a strictly financial basis, but you'll have a much newer car and make out OK.
I have nothing against Honda or a CRV, but I would be sure to check out all options in that segment, including Kia, Hyundai, Subaru, Mazda, Ford, etc. in addition to Honda and Toyota.
I have nothing against Honda or a CRV, but I would be sure to check out all options in that segment, including Kia, Hyundai, Subaru, Mazda, Ford, etc. in addition to Honda and Toyota.
"The course of history shows that as the government grows, liberty decreases." Thomas Jefferson
Re: Want to trade car for Small SUV: Financially good, bad,
Thanks, we'll be sure to do that but the CR-V seems like the Goldilocks of this segment. It doesn't seem truly outstanding at anything, but also doesn't seem like it has any weaknesses either. When I checked it out the cargo room seemed really good for a car that size, and I also like that the powertrain is an older design - that 4-cylinder 5 speed auto combo is basically identical to an Accord we had in the past, and that car was very reliable. Honda seems to know how to do 4-cylinder engines.deanbrew wrote:"A happy wife..." and all of that. Your BMW is six years old, and though it only has 40k miles, I would bet on some significant maintenance expenses. New car warranty, better MPG and little or no maintenance for several years. No, you won't come out ahead on a strictly financial basis, but you'll have a much newer car and make out OK.
I have nothing against Honda or a CRV, but I would be sure to check out all options in that segment, including Kia, Hyundai, Subaru, Mazda, Ford, etc. in addition to Honda and Toyota.
- janiebegood
- Posts: 97
- Joined: Mon Feb 03, 2014 7:35 am
Re: Want to trade car for Small SUV: Financially good, bad,
I'm on my third Honda CR-V. I got a new one in 2000, traded it in 2002 to get McPherson strut suspension and ABS on the new model, and then decided eleven years and 88K miles later that I wanted a car with a rearview camera and a USB charger.
So last year, I researched and test drove every small SUV out there, and a couple of bigger ones, too, to see if there was anything I liked better than the CR-V. In the end, even after a two-day flirtation with a 2010 Lexus RX 350, I decided on a new CR-V.
There are more powerful SUVs out there (I'm looking at you, Acura MDX), and cushier SUVs out there (I did enjoy those two days with that RX 350), but the CR-V is a great choice.
So last year, I researched and test drove every small SUV out there, and a couple of bigger ones, too, to see if there was anything I liked better than the CR-V. In the end, even after a two-day flirtation with a 2010 Lexus RX 350, I decided on a new CR-V.
There are more powerful SUVs out there (I'm looking at you, Acura MDX), and cushier SUVs out there (I did enjoy those two days with that RX 350), but the CR-V is a great choice.
Re: Want to trade car for Small SUV: Financially good, bad,
I just traded my 2006 BMW 325xi with 95,000 miles for a 2014 Jeep Cherokee a month ago. We had two sedans and I wanted one vehicle with some carrying capacity. I looked at all the small and mid-sized crossovers and in the end decided that if I was going this route, I would go all the way and get a trail rated Jeep. I live in Minnesota after all and this last winter has been brutal. This is the first new vehicle I've bought since my 1976 Honda Civic but it was an emotional decision, not financial. If I was going to give up all the fun aspects of the BMW I wanted to at least replace the sportiness with all the technology and comfort accessories of the new Cherokee. I think if I'd switched from a BMW to a Honda SUV I would have felt a big loss. With the move from BMW to the Cherokee, it's an even emotional trade in my mind.
Re: Want to trade car for Small SUV: Financially good, bad,
I drive a 2005 CR-V (bought new), currently has 135,000 miles on it. I've been told several times that they can hit 250,000 miles, and believe it, as I often see older models on the road. It's definitely not a "driver's car" like your Bimmer, but it's extremely versatile. Love the view, wish it had better armrests. I imagine the newer models do.
Re: Want to trade car for Small SUV: Financially good, bad,
I don't know where you live, but take a look in your Sunday newspaper.
You can probably lease a Chevy Equinox for 36 months for zero down and $220 a month. Maintenance (oil changes and tire rotations) included. It's a nice vehicle, I got one a couple of months ago.
Why people put tens of thousands of dollars as capital investments into their vehicles just astounds me.
L.
You can probably lease a Chevy Equinox for 36 months for zero down and $220 a month. Maintenance (oil changes and tire rotations) included. It's a nice vehicle, I got one a couple of months ago.
Why people put tens of thousands of dollars as capital investments into their vehicles just astounds me.
L.
You can get what you want, or you can just get old. (Billy Joel, "Vienna")
-
- Posts: 13356
- Joined: Tue Mar 23, 2010 1:45 pm
- Location: Reading, MA
Re: Want to trade car for Small SUV: Financially good, bad,
I think of it as a capital expenditure over ten years or so, not an investment. But there's no question that a 7-10 year old vehicle isn't quite as shiny or dependable as one that's less than three years old.Leeraar wrote:I don't know where you live, but take a look in your Sunday newspaper.
You can probably lease a Chevy Equinox for 36 months for zero down and $220 a month. Maintenance (oil changes and tire rotations) included. It's a nice vehicle, I got one a couple of months ago.
Why people put tens of thousands of dollars as capital investments into their vehicles just astounds me.
L.
So you have to decide where to throw your money...
Attempted new signature...
Re: Want to trade car for Small SUV: Financially good, bad,
Many years ago my wife and I were looking at a Volvo to either buy or lease. We keep our cars about 8 years +/-.
After discussing it with the dealer, my wife and I went to lunch and she had me explain the lease program.
She said "So you pay them money every month for 3 years and then at the end you give them the car back? What do you have to show for all the money you gave them?" Sometimes common sense from the wife makes life simpler.
We bought the car.
Dan999
After discussing it with the dealer, my wife and I went to lunch and she had me explain the lease program.
She said "So you pay them money every month for 3 years and then at the end you give them the car back? What do you have to show for all the money you gave them?" Sometimes common sense from the wife makes life simpler.
We bought the car.
Dan999
Dan999
-
- Posts: 49038
- Joined: Fri May 11, 2007 11:07 am
Re: Want to trade car for Small SUV: Financially good, bad,
The Wizard wrote:I think of it as a capital expenditure over ten years or so, not an investment. But there's no question that a 7-10 year old vehicle isn't quite as shiny or dependable as one that's less than three years old.Leeraar wrote:I don't know where you live, but take a look in your Sunday newspaper.
You can probably lease a Chevy Equinox for 36 months for zero down and $220 a month. Maintenance (oil changes and tire rotations) included. It's a nice vehicle, I got one a couple of months ago.
Why people put tens of thousands of dollars as capital investments into their vehicles just astounds me.
L.
So you have to decide where to throw your money...
Precisely the point. If you trade in your car every 5 years or less, (not sure where the breakeven point is), then a lease works out. Friends of mine who are very frugal (6 figure combined income, kids in private schools, no mortgage debt on a $1m house, large portfolio) lease their Mercedes-- it works out, financially (again, frugality, they have only 1 car, which is unusual). Last people I would have thought to 1). drive a Merc 2). lease a car. But it works out-- they have done the numbers.
If one's wife does a lot of miles and every day, then your nightmare is that she is stuck in the dark somewhere or beside a highway in a broken down car. You are going to replace your car every 5 years. Then, you should think about leasing.
If you keep your car 10 years, you are better off buying. Ditto I suspect if you do high mileage.
Depends partly on your expected return of alternative investments vs. cost of the lease.
Re: Want to trade car for Small SUV: Financially good, bad,
Leasing can work if you play the game correctly. Here's how it works: Let's say the price of the car is $21,000. In three years time the value is projected to be $14,000. When you lease you take out a loan for the $7,000 difference (about $200 per month). When you lease you are simply paying the depreciation. That's where the money went, and it disappears whether you buy the car or not.Dan999 wrote:Many years ago my wife and I were looking at a Volvo to either buy or lease. We keep our cars about 8 years +/-.
After discussing it with the dealer, my wife and I went to lunch and she had me explain the lease program.
She said "So you pay them money every month for 3 years and then at the end you give them the car back? What do you have to show for all the money you gave them?" Sometimes common sense from the wife makes life simpler.
We bought the car.
Dan999
At least in Michigan, you pay sales tax monthly on the depreciation when you lease. In total, you will pay 6% of $7,000 in sales tax.
If you buy the car, you will pay 6% of $21,000 up front. If you later sell the car (say, for $14,000 in three years) you get none of that tax back. And, you have $14,000 of capital tied up in the car in the meantime.
In this case, it will take 105 months (nearly 9 years) at $200 per month to pay off $21,000. Sure, it may be worth a few grand, but you are likely to have replaced tires, brakes and batteries at least twice each.
There are plenty of gotchas in getting a lease, but I simply ask one question: "Zero down, what's the lowest monthly payment?"
Whatever you do, the ads in the Sunday paper are usually loss leaders designed to draw showroom traffic. Buy or lease, try to get those particular advertised deals. Avoid the bait and switch. If you have emotions about the car you drive, they've got you.
And, if you (or anyone) happen to be interested in a GM vehicle (buy or lease), send me a PM and I'll get you a code for the employee / friends discount. The discount is on the vehicle factory invoice, so the dealer really can't mess with it.
L.
You can get what you want, or you can just get old. (Billy Joel, "Vienna")
-
- Posts: 1563
- Joined: Sat Oct 06, 2012 1:10 pm
- Location: Where I wanna be.
Re: Want to trade car for Small SUV: Financially good, bad,
Yes my 2014 has armrests. I really like them (something that my previous X5 did not have!).chicks wrote:I drive a 2005 CR-V (bought new), currently has 135,000 miles on it. I've been told several times that they can hit 250,000 miles, and believe it, as I often see older models on the road. It's definitely not a "driver's car" like your Bimmer, but it's extremely versatile. Love the view, wish it had better armrests. I imagine the newer models do.
Re: Want to trade car for Small SUV: Financially good, bad,
I'm 5'0" tall. I drive a Hyundai Santa Fe, a 2007. Love that car. I can see very well and am comfortable. The warranty can't be beat. My car has been a few years out of the warranty and still runs like a charm at 101k. Have had no major issues. They were recently updated and the new design is sleek.
Re: Want to trade car for Small SUV: Financially good, bad,
I own a 2009 Honda CRV Ex. I bought it used with 31,000 miles on it and it is now at 98,000 miles. Previously it was an Enterprise rental car. Unlike you, I live in a snowy area and bought the CRV because it is all wheel drive. I have been very pleased with it.
I have owned 3 Hondas, a 2000 Civic Si (sold at 145,000 miles & still in great shape), a 2005 Honda Pilot Ex (my son is driving) and the 2009 Honda CRV Ex. They have all been great vehicles, although the Pilot has had some issues (now at 150,000 miles). One thing I have found with the Hondas: You do have to add oil from time to time; in the case of the CRV, about 1 quart every 3,000 miles. With the driving I do, the "maintenance minder" (on board maintenance system) tells me to change the oil about every 12,000 miles. I believe in over maintaining my vehicles, so I change it about every 10,000 miles. Some people I know look at oil consumption as a measure of goodness of a vehicle; surprisingly though, they do not feel the same about gasoline consumption. I only mention this because I know it bothers some people.
You probably will not save any money trading from your BMW. You will find, though, that you life is simplified because the Honda seldom needs unscheduled maintenance.
I have owned 3 Hondas, a 2000 Civic Si (sold at 145,000 miles & still in great shape), a 2005 Honda Pilot Ex (my son is driving) and the 2009 Honda CRV Ex. They have all been great vehicles, although the Pilot has had some issues (now at 150,000 miles). One thing I have found with the Hondas: You do have to add oil from time to time; in the case of the CRV, about 1 quart every 3,000 miles. With the driving I do, the "maintenance minder" (on board maintenance system) tells me to change the oil about every 12,000 miles. I believe in over maintaining my vehicles, so I change it about every 10,000 miles. Some people I know look at oil consumption as a measure of goodness of a vehicle; surprisingly though, they do not feel the same about gasoline consumption. I only mention this because I know it bothers some people.
You probably will not save any money trading from your BMW. You will find, though, that you life is simplified because the Honda seldom needs unscheduled maintenance.
Re: Want to trade car for Small SUV: Financially good, bad,
The original post cites a couple reasonable points for switching car types (more suburban lifestyle, taller ride) but then flatly dismisses buying anything other than a brand new SUV. That seems weird. I think the only way to answer the "financial sense?" question with a Yes is to make the replacement SUV a used vehicle.
Say you own the BMW outright (math should work the same regardless) and we look three years out and use realistic but round numbers. You have a $15,000-ish asset today, in three years it will be worth $10,000? Assuming $5,000 total maintenance expenses over three years, you pay 5k and have an asset drop 5k, sounds like an 10k hit. The brand new SUV has no maintenance, but will cost at least an extra $10,000 up front. Financing would drive that up further. Three years out, instead of having a $25,000 asset, you have a $15,000 asset? That sounds like a 20k hit.
Am I oversimplifying or missing something? Decisions like this are rarely made on a strictly financial basis, but if that's the question... looks like a big No to me. Why not turn the $15,000 BMW into a low mileage $15,000 3-4 year old SUV and get the functional benefits without the killer financial hit? Or even spend a couple grand more on the used SUV knowing maintenance will be half as costly as the BMW?
Hmm, so I wrote the above with the conclusion already in mind. Walked away, pondered, now think my math was screwed up. Another way of looking at this...
10k in the bank
15k vehicle asset
three-year scenario 1: bank reduced to 5k due to high maintenance costs of BMW (too pessimistic?) ... 10k vehicle asset due to depreciation (too pessimistic?) ... 15k combined outcome
three-year scenario 2: bank reduced to 0k to buy new SUV on top of BMW sale ... no maintenance cost ... 15k vehicle asset due to depreciation ... 15k combined outcome
That analysis makes it seem like a wash. Can that really be correct? Being more optimistic on the BMW maintenance and depreciation while factoring in a loan cost on the new SUV could swing things by a few grand, maybe that's it -- those are really high maintenance numbers for a vehicle with 40,000 miles on it. I feel like I'm missing something. Maybe the nagging feeling is the opportunity cost of the money being burned in the new vehicle's depreciation. The smarter play would still be a 3 year old used SUV, but I can't believe the new vehicle scenario could almost even out. Must be missing something. Why am I trying to do this at 1:30 AM...
Say you own the BMW outright (math should work the same regardless) and we look three years out and use realistic but round numbers. You have a $15,000-ish asset today, in three years it will be worth $10,000? Assuming $5,000 total maintenance expenses over three years, you pay 5k and have an asset drop 5k, sounds like an 10k hit. The brand new SUV has no maintenance, but will cost at least an extra $10,000 up front. Financing would drive that up further. Three years out, instead of having a $25,000 asset, you have a $15,000 asset? That sounds like a 20k hit.
Am I oversimplifying or missing something? Decisions like this are rarely made on a strictly financial basis, but if that's the question... looks like a big No to me. Why not turn the $15,000 BMW into a low mileage $15,000 3-4 year old SUV and get the functional benefits without the killer financial hit? Or even spend a couple grand more on the used SUV knowing maintenance will be half as costly as the BMW?
Hmm, so I wrote the above with the conclusion already in mind. Walked away, pondered, now think my math was screwed up. Another way of looking at this...
10k in the bank
15k vehicle asset
three-year scenario 1: bank reduced to 5k due to high maintenance costs of BMW (too pessimistic?) ... 10k vehicle asset due to depreciation (too pessimistic?) ... 15k combined outcome
three-year scenario 2: bank reduced to 0k to buy new SUV on top of BMW sale ... no maintenance cost ... 15k vehicle asset due to depreciation ... 15k combined outcome
That analysis makes it seem like a wash. Can that really be correct? Being more optimistic on the BMW maintenance and depreciation while factoring in a loan cost on the new SUV could swing things by a few grand, maybe that's it -- those are really high maintenance numbers for a vehicle with 40,000 miles on it. I feel like I'm missing something. Maybe the nagging feeling is the opportunity cost of the money being burned in the new vehicle's depreciation. The smarter play would still be a 3 year old used SUV, but I can't believe the new vehicle scenario could almost even out. Must be missing something. Why am I trying to do this at 1:30 AM...
Last edited by Prov227 on Tue Apr 08, 2014 1:18 am, edited 1 time in total.
"...and the borrower is slave to the lender." -Proverbs 22:7
- White Coat Investor
- Posts: 17413
- Joined: Fri Mar 02, 2007 8:11 pm
- Location: Greatest Snow On Earth
Re: Want to trade car for Small SUV: Financially good, bad,
I use a simple algorithm for questions like these:
Can you afford it?
If yes, do you want it more than you want something else that costs the same?
If the answer is yes, then buy it.
It's a consumption decision, not an investment decision. You've got to spend your money on something and you can't take it with you. We don't save for savings sake.
Can you afford it?
If yes, do you want it more than you want something else that costs the same?
If the answer is yes, then buy it.
It's a consumption decision, not an investment decision. You've got to spend your money on something and you can't take it with you. We don't save for savings sake.
1) Invest you must 2) Time is your friend 3) Impulse is your enemy |
4) Basic arithmetic works 5) Stick to simplicity 6) Stay the course
Re: Want to trade car for Small SUV: Financially good, bad,
my wife and I are on our 2nd Honda CRV.
we both really like the CRV and dependability of Honda in general.
the CRV is HER vehicle; I drive a Honda Accord (2007).
never any problems; the local service is very good.
we looked at other vehicles, GMC, Ford, Toyota, Nissan....none had the mileage we are looking for.
on the highway, I get in the low-mid Thirties; as high as 38.
but I drive a reasonable speed; 62 highway.
good luck with your choice.
Don
we both really like the CRV and dependability of Honda in general.
the CRV is HER vehicle; I drive a Honda Accord (2007).
never any problems; the local service is very good.
we looked at other vehicles, GMC, Ford, Toyota, Nissan....none had the mileage we are looking for.
on the highway, I get in the low-mid Thirties; as high as 38.
but I drive a reasonable speed; 62 highway.
good luck with your choice.
Don
Re: Want to trade car for Small SUV: Financially good, bad,
In scenario 1, you might be too pessimistic regarding $5,000 in maintenance and repairs over the next three years, but it's probably not a bad estimate given the anticipated need for tires, brakes, rotors and other items. I think you are close on the depreciation, though certainly not too pessimistic. $5k in depreciation over three years is only $1,667 per year, which is very low. Actual depreciation might be more like $6-8k.three-year scenario 1: bank reduced to 5k due to high maintenance costs of BMW (too pessimistic?) ... 10k vehicle asset due to depreciation (too pessimistic?) ... 15k combined outcome
three-year scenario 2: bank reduced to 0k to buy new SUV on top of BMW sale ... no maintenance cost ... 15k vehicle asset due to depreciation ... 15k combined outcome
In scenario 2, you will still have some maintenance for oil changes, wiper blades and the like, but probably not much else. You are assuming $10k depreciation in three years, which is probably reasonable for a new car. What you are missing, though, are the transaction costs involved with buying a new car such as registration and sales tax. But I don't think that changes much, really.
So, the numbers don't give clear guidance, which brings the other factors to the forefront: a) what your wife wants; b) having a new car that presumably is more reliable; c) having a new car warranty; and d) what your wife wants.
No, that was not a typo.
"The course of history shows that as the government grows, liberty decreases." Thomas Jefferson
-
- Posts: 846
- Joined: Mon Mar 03, 2014 11:56 pm
Re: Want to trade car for Small SUV: Financially good, bad,
While your life is your own:
I'd like to point out, being short doesn't mean you need a SUV.
My girlfriend, she's 4 foot 5. Yeah, 7 inches shorter than 5 foot. Me at 6 foot 1, her head goes straight into my solar-plexus when she hugs me.
She likes small cars. You just have to be very particular about the car.
She has to sit so close to the steering wheel, in any vehicle, that if the air-bag went off, it'd probably suffocate her.
I'd like to point out, being short doesn't mean you need a SUV.
My girlfriend, she's 4 foot 5. Yeah, 7 inches shorter than 5 foot. Me at 6 foot 1, her head goes straight into my solar-plexus when she hugs me.
She likes small cars. You just have to be very particular about the car.
She has to sit so close to the steering wheel, in any vehicle, that if the air-bag went off, it'd probably suffocate her.
Systems Engineer
Re: Want to trade car for Small SUV: Financially good, bad,
FWIW, I agree. It kind of cracks me up to see all of these small women in great big SUVs. "But I like sitting up so I can see." Well, that's because there are all of these other SUVs on the road and you can't see over, through or around them. They are a plague, and I can't stand them. And, yes, I realize a Honda CRV is not a big SUV, but it's still taller and bigger than it needs to be given the interior room.Angelus359 wrote:While your life is your own:
I'd like to point out, being short doesn't mean you need a SUV.
I still like driving a car, not a SUV or CUV or crossover or whatever you want to call it. But that's my opinion, and clearly a lot of people disagree.
"The course of history shows that as the government grows, liberty decreases." Thomas Jefferson