Marginal benefit of spending more on car

Questions on how we spend our money and our time - consumer goods and services, home and vehicle, leisure and recreational activities
nolesrule
Posts: 617
Joined: Thu Feb 26, 2015 10:59 am

Re: Marginal benefit of spending more on car

Post by nolesrule » Thu Apr 23, 2015 11:45 am

M_to_the_G wrote:Point taken. Interesting that things like heated seats, blue tooth connectivity, and adaptive cruise control are so important to folks. I still see a car as just a way to get from point A to point B. Perhaps because I've always driven older cars, I never got into those things, so I don't know what I'm missing? That's entirely possible. I have taken trips from Alabama to Maine and back again in my 2002 Accord and never once thought about any of those things. The A/C is cold, the heat is hot, it drives straight, and the lights work. But I get that other people have other standards for features they want/need in a car, and I guess you can't get those things for $10k.
There are states where being seen even touching your cellphone is going to get you a trip to the shoulder of the road and a hefty fine. Bluetooth comes in handy for avoiding that.

As for heated seats, we used to live in Florida. My wife's CR-V was totalled in an accident a couple years ago. She loved the car, so we ended up replacing it with the same year and model, but through in a couple thousand of our own after the insurance settlement and got an upgraded trim package. Part of the upgrade included heated seats and AWD. Who needs those for street driving in Florida? Well, move forward to last fall. We relocated to northern New Jersey near the mountains. Those heated seats came in handy on those freezing cold mornings, and the AWD handled the snow and ice-covered hilly roads better than my Civic.

User avatar
HomerJ
Posts: 11160
Joined: Fri Jun 06, 2008 12:50 pm

Re: Marginal benefit of spending more on car

Post by HomerJ » Thu Apr 23, 2015 4:00 pm

FYI, I have heated seats in my $15,000 2009 Honda Civic, and radio controls on the steering wheel, so you don't really need to upgrade to a Infiniti, etc. for stuff like that anymore.

I saw a commercial that says rear-cameras are now standard in 2015 Honda Civics as well, so in 3 years when I buy a used 2016 Honda Civic, I'll get that feature as well.

I figure I'll just wait 10 years and get all the cool stuff when it becomes standard, and not have to pay $15k extra for each of my cars along the way.

autonomy
Posts: 328
Joined: Fri Jan 24, 2014 2:22 pm

Re: Marginal benefit of spending more on car

Post by autonomy » Thu Apr 23, 2015 4:20 pm

HomerJ wrote:FYI, I have heated seats in my $15,000 2009 Honda Civic, and radio controls on the steering wheel, so you don't really need to upgrade to a Infiniti, etc. for stuff like that anymore.

I saw a commercial that says rear-cameras are now standard in 2015 Honda Civics as well, so in 3 years when I buy a used 2016 Honda Civic, I'll get that feature as well.

I figure I'll just wait 10 years and get all the cool stuff when it becomes standard, and not have to pay $15k extra for each of my cars along the way.
That's great that you have heated seats on your $15K Civic, but you have that because the designers sacrificed other things in order to hit that price point (Also, really, heated seats on a 2009 for 15K? My wife had a $15K 2005 Civic and it didn't even have AC). The Civic is a nice car, but it's not a very comfortable car for long highway trips and it's quite noisy inside. I'm OK with spending a bit more money on insulation and comfort. Rear-view cameras are a government standard and will be on all cars by 2018, so that is a moot point.

As far as trickle-down technology, you can wait 30 years and get even more cool stuff. But some of us want to enjoy our hard-earned money now, and not 30 years from now.

User avatar
deanbrew
Posts: 1256
Joined: Wed Jul 21, 2010 12:05 pm
Location: The Keystone State

Re: Marginal benefit of spending more on car

Post by deanbrew » Thu Apr 23, 2015 4:25 pm

Rear-view cameras are a government standard and will be on all cars by 2018, so that is a moot point.
That's true, but you have to give Honda credit for putting backup cameras in all of their cars several years before they are mandated. Or at least if that's an important feature to you. But putting individual features aside, there is no arguing that convenience and safety features debut on more expensive vehicles and then work their way down to less expensive ones over time.
"The course of history shows that as the government grows, liberty decreases." Thomas Jefferson

protagonist
Posts: 5242
Joined: Sun Dec 26, 2010 12:47 pm

Re: Marginal benefit of spending more on car

Post by protagonist » Thu Apr 23, 2015 4:48 pm

How many $5k or $10k cars have bluetooth connectivity for phones, with steering wheel controls for the phone and audio systems?.
My gf's $15K 2015 base model Fit does.
How many have power seats, with leather?
What is the advantage of a power seat over a manual controlled seat? And leather gets awfully hot and sticky in the summer. Many people prefer fabric (on sofas as well).
How many have traction control and stability control?
I think her Fit does.
How many have dashboard and side airbags?
I think her Fit does.
How many have adaptive cruise control?
I don't know what that is or what would make it worth thousands of dollars.

I don't pretend to speak for M to the G, but I didn't interpret his post as suggesting that there are NO intrinsic advantages to a $60K car over a 15K car. Of course there probably are. But the point I think he was making is that the substantive differences in function and comfort are very minor in relation to the fourfold increase in cost. The major difference is in image, which is very important to some. I don't think he was being critical- just stating an opinion. Chacun a son gout.

The Wizard
Posts: 11771
Joined: Tue Mar 23, 2010 1:45 pm
Location: Reading, MA

Re: Marginal benefit of spending more on car

Post by The Wizard » Thu Apr 23, 2015 4:59 pm

My leather seats don't get hot & sticky in the summer, be careful you're not talking vinyl.
But I don't know any recent cars with vinyl anymore.
I usually try to get a light leather color to lessen the heat absorption...
Attempted new signature...

The Wizard
Posts: 11771
Joined: Tue Mar 23, 2010 1:45 pm
Location: Reading, MA

Re: Marginal benefit of spending more on car

Post by The Wizard » Thu Apr 23, 2015 5:08 pm

Protagonist mentions a four fold increase in car cost.
Hmmm, that's large, hardly in the realm of marginal benefit analysis.

Let's look at the Honda Fit: $15.6k for the base LX model.
$19.9k for the upscale EX-L model.
No time to detail the differences, but I think that's closer to the subject at hand...
Attempted new signature...

protagonist
Posts: 5242
Joined: Sun Dec 26, 2010 12:47 pm

Re: Marginal benefit of spending more on car

Post by protagonist » Thu Apr 23, 2015 5:49 pm

The Wizard wrote:My leather seats don't get hot & sticky in the summer, be careful you're not talking vinyl.
A comparison of cloth vs leather seats, advantages and disadvantages:
http://blog.consumerguide.com/cloth-vs-leather/

Having had both, I think this is a fair analysis.

User avatar
M_to_the_G
Posts: 529
Joined: Mon Jan 21, 2013 9:57 am

Re: Marginal benefit of spending more on car

Post by M_to_the_G » Thu Apr 23, 2015 6:16 pm

For what it's worth, my $5k Accord has leather seats. :mrgreen:
"It’s basically the plot of 'Charlie and the Chocolate Factory.' If you stick around, doing nothing, while everyone around you ****s up, you’re going to win big." - John Oliver

User avatar
coachz
Posts: 1048
Joined: Wed Apr 04, 2007 7:10 am
Location: Charleston, SC

Re: Marginal benefit of spending more on car

Post by coachz » Thu Apr 23, 2015 6:26 pm

I would never have leather in a car in a climate with high 90s for 3 months or more. Very sticky. Been there, done that. Driving cloth in Charleston, SC
The Wizard wrote:My leather seats don't get hot & sticky in the summer, be careful you're not talking vinyl.
But I don't know any recent cars with vinyl anymore.
I usually try to get a light leather color to lessen the heat absorption...

autonomy
Posts: 328
Joined: Fri Jan 24, 2014 2:22 pm

Re: Marginal benefit of spending more on car

Post by autonomy » Fri Apr 24, 2015 7:30 am

Never had the sticky leather problem in humid and hot coastal MA (OK, maybe not as humid as NC ALL the time). If we had cloth seats in our car, they would've been stained beyond all recognition at this point, so leather staying clean is worth the expense in my book.

I think we're just arguing about opinions here. Some people prefer to pay bottom dollar for a plain black-box appliance that takes them from point A to point B. Others prefer a bit more comfort. Then there are people who won't spend less than a certain amount because they can't be seen driving a Honda in their social circle.

User avatar
deanbrew
Posts: 1256
Joined: Wed Jul 21, 2010 12:05 pm
Location: The Keystone State

Re: Marginal benefit of spending more on car

Post by deanbrew » Fri Apr 24, 2015 7:38 am

I always had cloth seats until my latest two cars, which have had leather. I much prefer leather. Yes, black leather will get very hot in the summer, which is why I bucked the trend and got tan/camel colored leather in my current car. Doesn't get hot or sticky at all. Leather is easy to clean and looks good after many years. And it just feels better. One of the complaints I had about cloth seats is static shock after getting out. I would shock myself on the door handle after getting out. I haven't had that problem with leather seats.

But, yes, cloth or leather comes down to preference and cost, and can't really be seen as either a safety or convenience feature. The way trim levels are handled by nearly all manufacturers, you sometimes don't have a choice regarding leather or cloth if you decide on a certain trim level for other features and options.
"The course of history shows that as the government grows, liberty decreases." Thomas Jefferson

User avatar
Epsilon Delta
Posts: 7422
Joined: Thu Apr 28, 2011 7:00 pm

Re: Marginal benefit of spending more on car

Post by Epsilon Delta » Fri Apr 24, 2015 10:50 am

autonomy wrote:I think we're just arguing about opinions here. Some people prefer to pay bottom dollar for a plain black-box appliance that takes them from point A to point B. Others prefer a bit more comfort. Then there are people who won't spend less than a certain amount because they can't be seen driving a Honda in their social circle.
It's best to acknowledge the full range of opinion. For many people it's not a trade off of cost v. comfort. I feel that cloth seats are more comfortable, and would pay to avoid leather if I had to. In a different context I have paid to replace leather office furniture with something I can sit on without melting (or freezing -- at the same time).

Savvy
Posts: 261
Joined: Sat May 05, 2012 3:09 pm

Re: Marginal benefit of spending more on car

Post by Savvy » Fri Apr 24, 2015 11:57 am

Buy a used 2010 Honda Civic for the same reason we did (as our only car):

Cheap, Safe, Reliable, and Fuel Efficient.

What else could you need?
Savvy

Johno
Posts: 1883
Joined: Sat May 24, 2014 4:14 pm

Re: Marginal benefit of spending more on car

Post by Johno » Fri Apr 24, 2015 2:50 pm

aaaaaaabbbbbbbbbb wrote:
jackholloway wrote:My rule has become pretty simple - how much joy would I get out of each expense? Money saved can always be turned into a fun experience, money spent has been turned in, so be cautious in direct proportion to the expense size and frequency.
....
Balance that against just under an hour a work day, or 2000 hours in the car over its likely ten year life. Put another way, I am paying between ten and twenty dollars an hour for commute time.

This math is what made me reject all of the Tesla grade cars - there were just too many experiences I wanted more. It did not make me reject new cars altogether. Do your own math.
I used to apply the same analysis to my life, but I am fortunate enough to be wealthy enough that this sort of analysis no longer makes sense. I could retire comfortably today if I wanted to (I don't because I like my job). So it's not the car or extra hours of work - I'll continue working anyway. It's not the car or the vacation - I can do both. (Within reason of course - I could certainly accomplish the feat of running out of money if I tried hard enough.)

Following this analysis, I start to think that I might as well spend $100k on a car because the money isn't doing me any good just sitting there and piling up. But then I ask myself "really how much better is the $100k car, surely I shouldn't spend money so frivolously"... hence this thread.
Same here, can buy anything I want (there are many things I can't afford but I don't really want any of them) so there's no particular trade off between other consumption, present or future, and a more expensive car. I can get a Lambo if I want to, it's just not practical, neither would a Tesla be, and at a certain point you do get sucked into the 'pretentious' thing, even if it's just at nth-order level (do they think I think they think I think I'm better than them because I drive this car?...). I accept as objective fact that my relatively modest, for me, new BMW 328 isn't twice as good as the best $24k car. But if I don't spend the other $24k on the car, and don't feel I have to deprive myself to give more to charity (to me, 10 or 15% of spending to charity is enough and that's that), and don't feel the kids need a marginal increase in their inheritance, there's not much alternative utility to the extra $24k. If something else comes up that costs $24k and we want it, we'll get that too. So the BMW doesn't have to be much better, just a little better, which it is in our opinion.

I don't condemn the more conventional BH attitude about stuff like this. I had it, and it's a good attitude while you're making your money. But if fortunate (or however else you want to characterize it) enough, that attitude eventually reaches a limit IME. You really can't take it with you, and scrimping to free up every marginal $ for charity/heirs is seldom people's real attitude IMO. That's more likely an excuse for people who just can't break out of a frugality that doesn't suit their situation anymore. But if one needs to watch their spending, the marginal benefit/$ of a luxury car might well be inadequate to justify its purchase.

The Wizard
Posts: 11771
Joined: Tue Mar 23, 2010 1:45 pm
Location: Reading, MA

Re: Marginal benefit of spending more on car

Post by The Wizard » Fri Apr 24, 2015 4:08 pm

Savvy wrote:Buy a used 2010 Honda Civic for the same reason we did (as our only car):

Cheap, Safe, Reliable, and Fuel Efficient.

What else could you need?
Savvy
How does that address the benefit of spending more?
It does not...
Attempted new signature...

User avatar
HomerJ
Posts: 11160
Joined: Fri Jun 06, 2008 12:50 pm

Re: Marginal benefit of spending more on car

Post by HomerJ » Fri Apr 24, 2015 9:31 pm

aaaaaaabbbbbbbbbb wrote:Following this analysis, I start to think that I might as well spend $100k on a car because the money isn't doing me any good just sitting there and piling up. But then I ask myself "really how much better is the $100k car, surely I shouldn't spend money so frivolously"... hence this thread.
Give it to someone else and make their life better.... Heck, give it to 10 other someones and make their lives better.

User avatar
snowshoes
Posts: 348
Joined: Tue Feb 03, 2015 12:33 pm

Re: Marginal benefit of spending more on car

Post by snowshoes » Fri Apr 24, 2015 9:38 pm

I'd suggest buying used. I see many 35-45k auto's sold at auction for 1-5k. Do you really need heated windshield wipers? :P
Last edited by snowshoes on Mon Apr 27, 2015 11:07 pm, edited 1 time in total.

epilnk
Posts: 2603
Joined: Wed Apr 18, 2007 7:05 pm

Re: Marginal benefit of spending more on car

Post by epilnk » Mon Apr 27, 2015 4:24 pm

HomerJ wrote:What features exactly would make it worth spending fifteen or thirty THOUSAND extra dollars on a car? How much more comfortable could it be? My $15k (bought 2-year used) Honda Civic even has heated seats (which I almost never use since I park in a garage). What do the $50k cars offer that would make me $35,000 happier?
For you? Maybe not much. For me, with chronic back pain that I've had for decades and is only getting worse? A lot. I'm still mourning the loss of my 2000 Jetta that was unreliable, yet more comfortable for me than any seat in my home.

Hondas are uncomfortable and had to be ruled out. Ditto for Chrysler and GM (though not Ford). I can't even test drive Toyotas because the aggressive headrest pushes my neck forward at an unsafe angle. I'm looking at larger family vehicles which rules out the low end. It needs to be comfortable for both of us to drive and my husband is nearly a foot taller than me. The options narrow, and I haven't exhausted them all yet.

The Acura that is currently at the top of my list is over $50K. We're considering it, but it offends us that we can only get passenger lumbar support on the highest trim package. We don't want the entertainment system but to buy this vehicle I do need that seat. Is it worth $35K? At my age, maybe. I'm too old and too financially secure to suffer unnecessary pain.

sambb
Posts: 2028
Joined: Sun Mar 10, 2013 3:31 pm

Re: Marginal benefit of spending more on car

Post by sambb » Mon Apr 27, 2015 8:19 pm

deleted

firecaptain
Posts: 3
Joined: Mon Feb 01, 2010 9:58 am

Re: Marginal benefit of spending more on car

Post by firecaptain » Mon Apr 27, 2015 9:57 pm

I would like to chip in my 2 cents. One of the most important elements of a vehicle is its SAFETY RATINGS! $10,000 buys a larger, safer vehicle. This past week I was t- boned at an intersection by a vehicle that went through a stop sign at 35 mph. I was probable 6 inches from being crushed to death. I was driving a Toyota Highlander. If I was driving a Toyota Yaris I would be in the intensive care unit at the local hospital. Be safe. There are many distracted drivers out there.

lumberingc
Posts: 190
Joined: Tue Apr 07, 2015 11:46 pm

Re: Marginal benefit of spending more on car

Post by lumberingc » Tue Apr 28, 2015 2:08 am

aaaaaaabbbbbbbbbb wrote:I used to apply the same analysis to my life, but I am fortunate enough to be wealthy enough that this sort of analysis no longer makes sense. I could retire comfortably today if I wanted to (I don't because I like my job). So it's not the car or extra hours of work - I'll continue working anyway. It's not the car or the vacation - I can do both. (Within reason of course - I could certainly accomplish the feat of running out of money if I tried hard enough.)

Following this analysis, I start to think that I might as well spend $100k on a car because the money isn't doing me any good just sitting there and piling up. But then I ask myself "really how much better is the $100k car, surely I shouldn't spend money so frivolously"... hence this thread.
Buy a used civic and donate $95,000 to the peace corps. If you do this, you win my life-long admiration. Fancy cars mean nothing, but supporting an organization that seeks to help those in need and improve international relations leaves an indelible legacy.

-L

cjking
Posts: 1788
Joined: Mon Jun 30, 2008 4:30 am

Re: Marginal benefit of spending more on car

Post by cjking » Tue Apr 28, 2015 4:12 am

I was in similar position to OP when I bought a new car almost exactly a year ago. I had, within reason, an unlimited budget. Money spent on the car was not going to deprive me of spending anywhere else. I was determined to buy what I wanted, without regard to cost. (I exaggerate a little, I probably had a psychological limit of 40K.)

Having looked at the whole market, especially at all the offerings of Audi, BMW, Mercedes, Jaguar and Land Rover, it transpired that somehow the perfect car for me was a VW Golf, in the middle trim-level. Only Jaguar and Land Rover offered something I wanted that was better than I was getting in the Golf, but the Golf was better than them in other respects that mattered more to me.

I suppose what I'm trying to say is that even with almost no price constraints, the absolutely best car for me turned out to be far from the most expensive one I was willing to buy. I'm still a little bemused by that.

Aish
Posts: 128
Joined: Thu Mar 20, 2014 7:49 pm

Re: Marginal benefit of spending more on car

Post by Aish » Tue Apr 28, 2015 4:20 am

jackholloway wrote: That 15k would pay for 1500 hours with a trainer, 3000 hours of art classes, two family trips overseas, seven family trips in state at 300 a night hotels, 1500 albums, six of every us silver eagle ever made, 2000 ebooks, 1600 massages, ten pieces of fine jewelry, five paintings, seven new camera kits, or $450/yr in retirement.

Balance that against just under an hour a work day, or 2000 hours in the car over its likely ten year life. Put another way, I am paying between ten and twenty dollars an hour for commute time.

This math is what made me reject all of the Tesla grade cars - there were just too many experiences I wanted more. It did not make me reject new cars altogether. Do your own math.
Where do you get $9 massages and $10 per hour with a trainer? That seems super cheap.

TradingPlaces
Posts: 1245
Joined: Sun Nov 09, 2014 1:19 pm
Location: 30.286029, -97.530011

Re: Marginal benefit of spending more on car

Post by TradingPlaces » Tue Apr 28, 2015 4:44 am

M_to_the_G wrote:Point taken. Interesting that things like heated seats, blue tooth connectivity, and adaptive cruise control are so important to folks. I still see a car as just a way to get from point A to point B. Perhaps because I've always driven older cars, I never got into those things, so I don't know what I'm missing? That's entirely possible. I have taken trips from Alabama to Maine and back again in my 2002 Accord and never once thought about any of those things. The A/C is cold, the heat is hot, it drives straight, and the lights work. But I get that other people have other standards for features they want/need in a car, and I guess you can't get those things for $10k.
Yes, but a 2002 Accord is a very comfortable car. Try that same trip in a 2001 Civic, and you will change your mind about buying a Civic forever.

TradingPlaces
Posts: 1245
Joined: Sun Nov 09, 2014 1:19 pm
Location: 30.286029, -97.530011

Re: Marginal benefit of spending more on car

Post by TradingPlaces » Tue Apr 28, 2015 4:46 am

Aish wrote:
jackholloway wrote: That 15k would pay for 1500 hours with a trainer, 3000 hours of art classes, two family trips overseas, seven family trips in state at 300 a night hotels, 1500 albums, six of every us silver eagle ever made, 2000 ebooks, 1600 massages, ten pieces of fine jewelry, five paintings, seven new camera kits, or $450/yr in retirement.

Balance that against just under an hour a work day, or 2000 hours in the car over its likely ten year life. Put another way, I am paying between ten and twenty dollars an hour for commute time.

This math is what made me reject all of the Tesla grade cars - there were just too many experiences I wanted more. It did not make me reject new cars altogether. Do your own math.
Where do you get $9 massages and $10 per hour with a trainer? That seems super cheap.
3000 hours of art classes for $15K. $5 a class?

First of all, who offers classes for that cheap.

Second, what is the utility of taking 3000 hours of art classes?

TradingPlaces
Posts: 1245
Joined: Sun Nov 09, 2014 1:19 pm
Location: 30.286029, -97.530011

Re: Marginal benefit of spending more on car

Post by TradingPlaces » Tue Apr 28, 2015 4:48 am

lumberingc wrote:
aaaaaaabbbbbbbbbb wrote:I used to apply the same analysis to my life, but I am fortunate enough to be wealthy enough that this sort of analysis no longer makes sense. I could retire comfortably today if I wanted to (I don't because I like my job). So it's not the car or extra hours of work - I'll continue working anyway. It's not the car or the vacation - I can do both. (Within reason of course - I could certainly accomplish the feat of running out of money if I tried hard enough.)

Following this analysis, I start to think that I might as well spend $100k on a car because the money isn't doing me any good just sitting there and piling up. But then I ask myself "really how much better is the $100k car, surely I shouldn't spend money so frivolously"... hence this thread.
Buy a used civic and donate $95,000 to the peace corps. If you do this, you win my life-long admiration. Fancy cars mean nothing, but supporting an organization that seeks to help those in need and improve international relations leaves an indelible legacy.

-L
Yes, but life long admiration from you, or from other strangers, might give absolutely no utility to him. At least to me, gaining the life-long admiration of total strangers, even related through an internet forum, would mean absolutely nothing.

User avatar
TheGreyingDuke
Posts: 1458
Joined: Fri Sep 02, 2011 10:34 am

Re: Marginal benefit of spending more on car

Post by TheGreyingDuke » Tue Apr 28, 2015 6:10 am

As someone who has purchased over 50 cars (mostly $300 beaters back in the 1970's) I am reminded of an old saying among gearheads:

"There are two "best" days of car ownership, the day you buy it and the day you sell it." :happy
"Every time I see an adult on a bicycle, I no longer despair for the future of the human race." H.G. Wells

bloom2708
Posts: 4101
Joined: Wed Apr 02, 2014 2:08 pm
Location: Fargo, ND

Re: Marginal benefit of spending more on car

Post by bloom2708 » Tue Apr 28, 2015 7:23 am

We have two contrasting vehicles. A 2014 Ford Explorer Limited and a 2004 Ford Taurus SES. I paid $4200 for the Taurus used with 65k on it. The Explorer was north of $40k. I'll let you guess which one I drive and which one my wife drives. :mrgreen:

With a 10 year/10x cost difference, I would drive the Taurus any day. It has 2 air bags and traction control and a sun roof and AC. Nice cloth seats compared to leather in the Explorer. I do like the Explorer when it comes to overall safety features and carting the 3 kids around. It is awesome in snow. It also hauls people and lots of stuff.

I get better mileage with the Taurus in town than the Explorer gets on the highway. You still can't beat a sedan for the ability to just cruise along comfortably. Yes you do sit lower to the ground.

I would choose the $4200 Taurus and have the other $36k in Vanguard index funds. :sharebeer
"We are here not to please but to provoke thoughtfulness" Unknown Boglehead

Johno
Posts: 1883
Joined: Sat May 24, 2014 4:14 pm

Re: Marginal benefit of spending more on car

Post by Johno » Tue Apr 28, 2015 9:40 am

TradingPlaces wrote:
lumberingc wrote:
aaaaaaabbbbbbbbbb wrote:I used to apply the same analysis to my life, but I am fortunate enough to be wealthy enough that this sort of analysis no longer makes sense....
Following this analysis, I start to think that I might as well spend $100k on a car because the money isn't doing me any good just sitting there and piling up. But then I ask myself "really how much better is the $100k car, surely I shouldn't spend money so frivolously"... hence this thread.
Buy a used civic and donate $95,000 to the peace corps. If you do this, you win my life-long admiration. Fancy cars mean nothing, but supporting an organization that seeks to help those in need and improve international relations leaves an indelible legacy.
Yes, but life long admiration from you, or from other strangers, might give absolutely no utility to him. At least to me, gaining the life-long admiration of total strangers, even related through an internet forum, would mean absolutely nothing.
+1, the response seems to make the puzzling assumption that 'life long admiration' from a disembodied voice on the internet has any utility. The discussion, as I take it, is about utility function.

As I mentioned, my policy toward charity is no less than 10% of spending, but typically no more than 13-15%. So charity basically falls out of the equation of how much to spend on a car. If I spend more on cars or in general, I'll give more to charity to maintain at least 10%. Others are free to have different policies, but statements by anonymous strangers saying I should change my policy would have no impact.

Valuethinker
Posts: 34857
Joined: Fri May 11, 2007 11:07 am

Re: Marginal benefit of spending more on car

Post by Valuethinker » Wed Apr 29, 2015 5:44 am

jackholloway wrote:My rule has become pretty simple - how much joy would I get out of each expense? Money saved can always be turned into a fun experience, money spent has been turned in, so be cautious in direct proportion to the expense size and frequency.

I drive a ten year old Honda. I am actually getting annoyed at certain missing critter comforts, I like the idea of using the charging stations my employer provides, car pool lane access for electrics, and I want better android and iOS integration with my phones. I thus open the bidding with a leaf, a Prius, an accord, a Camry hybrid, a fusion hybrid, a volt, and the fiat electric. No tesla until I have 3-4m in the bank and everything paid off. (And that might as well be never.)

Those cars run high 20s-high30s, or about a 15k swing top to bottom.

That 15k would pay for 1500 hours with a trainer, 3000 hours of art classes, two family trips overseas, seven family trips in state at 300 a night hotels, 1500 albums, six of every us silver eagle ever made, 2000 ebooks, 1600 massages, ten pieces of fine jewelry, five paintings, seven new camera kits, or $450/yr in retirement.

Balance that against just under an hour a work day, or 2000 hours in the car over its likely ten year life. Put another way, I am paying between ten and twenty dollars an hour for commute time.

This math is what made me reject all of the Tesla grade cars - there were just too many experiences I wanted more. It did not make me reject new cars altogether. Do your own math.
Jack I'd just like to congratulate you (Holloway is a prison in London, but that's not what you meant in your nick, I am sure ;-)).

What you have done is *precisely* how we should work out big financial choices, and what most of us (self included) don't do (or at least not in a structured way).

Good on ya for really nailing the tradeoffs.

an_asker
Posts: 2111
Joined: Thu Jun 27, 2013 2:15 pm

Re: Marginal benefit of spending more on car

Post by an_asker » Wed Apr 29, 2015 9:58 am

aaaaaaabbbbbbbbbb wrote:I am looking to buy my first car. On the one hand, I can easily afford an expensive ($50k+) car. On the other hand, I live frugally (how else would I have gotten to a place where I can easily afford an expensive car!), so I am hesitant to pay much. I looked at car-buying guides, but they have you calculate your budget first, then find a good car for you in that range. But my budget is anywhere between $5k and $100k (if I can be convinced to pay that much).

So my question to you Bogleheads is: at each price point, what's the marginal benefit of spending more on a car?

I know that for $5k, I can get a quality used car like an old civic or crown vic. I know that at $500k, I am paying mainly for name, exclusivity, and power that is wasted because it cannot be delivered to the wheels without losing traction. But what's the progression between these two extremes?

What does going from $5k to $10k get me (in terms of reliability, performance, comfort, safety, properly designed cupholders, etc.)?

What about going from $10k to $20k? $20k to 30k? etc.
This sounds similar to (though it is different as well) the question I asked a few months back!

User avatar
mbk734
Posts: 460
Joined: Tue Jan 21, 2014 2:14 pm

Re: Marginal benefit of spending more on car

Post by mbk734 » Fri May 01, 2015 10:18 am

The Boglehead's Guide To Car Buying:

Buy a new Camry/Accord base model (Legacy if you need AWD). Sell and repeat every 10 years.
If you really want more features that you don't need, get the higher end trim.
If you have lots of kids, get the Toyota/Honda minivan.
If you are young or small get the Corolla/Civic.
If you are low on cash, buy used.
If you must buy a luxury car, buy a 1. Lexus (more reliable) 2. BMW (more fun to drive)
If you're uber rich, do whatever you want - Rolls Royce, Ferrari, Tesla, Mercedes (I would ride around in the back of a limo)
You can't stop the waves, but you can learn to surf

Imbros
Posts: 183
Joined: Mon Jan 23, 2012 11:41 pm
Location: Wisconsin

Re: Marginal benefit of spending more on car

Post by Imbros » Fri May 01, 2015 12:28 pm

bloom2708 wrote:We have two contrasting vehicles. A 2014 Ford Explorer Limited and a 2004 Ford Taurus SES. I paid $4200 for the Taurus used with 65k on it. The Explorer was north of $40k. I'll let you guess which one I drive and which one my wife drives. :mrgreen:

With a 10 year/10x cost difference, I would drive the Taurus any day. It has 2 air bags and traction control and a sun roof and AC. Nice cloth seats compared to leather in the Explorer. I do like the Explorer when it comes to overall safety features and carting the 3 kids around. It is awesome in snow. It also hauls people and lots of stuff.

I get better mileage with the Taurus in town than the Explorer gets on the highway. You still can't beat a sedan for the ability to just cruise along comfortably. Yes you do sit lower to the ground.

I would choose the $4200 Taurus and have the other $36k in Vanguard index funds. :sharebeer
Totally agree.

My '06 SAAB that cost me only $5k (because no one else wants it) has tan leather seats, bunch of airbags, ABS, Stability and Traction Control, 5 starts from Euro-NCAP and IIHS crash tests, AUX input for ipod/music players and as much power as a brand new compact luxury car from brands like BMW, Acura, Audi that costs $35k+.

The $30k I saved looks much better in my Vanguard account.
There is no greatness where there is no simplicity, goodness and truth. -L. Tolstoy

Post Reply