Buy a new car now or wait: what's the math say?

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corn18
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Buy a new car now or wait: what's the math say?

Post by corn18 » Mon Jul 08, 2019 4:10 pm

Well, my wife is driving a perfectly good 2011 Acura MDX that has 130,000 miles on it. We have had enough set aside to buy a new one for the last 3 years. It has been sitting in FZDXX earning around 2.2%. She is getting the itch for a new car, and I am having trouble figuring out why she should wait. The money can sit there longer and earn 2.2%, the depreciation is pretty flat and maintenance is just normal car stuff at this point. So is the math as simple as we earn 2.2% more each year we wait?
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Re: Buy a new car now or wait: what's the math say?

Post by Vulcan » Mon Jul 08, 2019 4:12 pm

corn18 wrote:
Mon Jul 08, 2019 4:10 pm
Well, my wife is driving a perfectly good 2011 Acura MDX that has 130,000 miles on it. We have had enough set aside to buy a new one for the last 3 years. It has been sitting in FZDXX earning around 2.2%. She is getting the itch for a new car, and I am having trouble figuring out why she should wait. The money can sit there longer and earn 2.2%, the depreciation is pretty flat and maintenance is just normal car stuff at this point. So is the math as simple as we earn 2.2% more each year we wait?
The new car starts getting older as as soon as you buy it.
If you torture the data long enough, it will confess to anything. ~Ronald Coase

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corn18
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Re: Buy a new car now or wait: what's the math say?

Post by corn18 » Mon Jul 08, 2019 4:14 pm

corn18 wrote:
Mon Jul 08, 2019 4:10 pm
Well, my wife is driving a perfectly good 2011 Acura MDX that has 130,000 miles on it. We have had enough set aside to buy a new one for the last 3 years. It has been sitting in FZDXX earning around 2.2%. She is getting the itch for a new car, and I am having trouble figuring out why she should wait. The money can sit there longer and earn 2.2%, the depreciation is pretty flat and maintenance is just normal car stuff at this point. So is the math as simple as we earn 2.2% more each year we wait?
Good point. The impact to our net worth is nil right now. Put a new car in there with its significant depreciation and it will go down fast.
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Re: Buy a new car now or wait: what's the math say?

Post by dm200 » Mon Jul 08, 2019 4:15 pm

corn18 wrote:
Mon Jul 08, 2019 4:10 pm
Well, my wife is driving a perfectly good 2011 Acura MDX that has 130,000 miles on it. We have had enough set aside to buy a new one for the last 3 years. It has been sitting in FZDXX earning around 2.2%. She is getting the itch for a new car, and I am having trouble figuring out why she should wait. The money can sit there longer and earn 2.2%, the depreciation is pretty flat and maintenance is just normal car stuff at this point. So is the math as simple as we earn 2.2% more each year we wait?
Foe you (and most of us here) - the math is as simple as you state.

But, I suspect your wife does not accept this. Pick your "battles" - buy the car that will make her happy - as long as you exercise regular "due diligence" on getting a good car at a fair and reasonable price.

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Re: Buy a new car now or wait: what's the math say?

Post by Tamarind » Mon Jul 08, 2019 4:15 pm

Wait. I wouldn't be surprised to see a well-maintained Subaru reach 200k.

Also, once a car is over 150k miles, I feel like it's usual to get more value from driving it than anyone will give you for it. Since fatal issues are usually not sudden, I prefer to wait until the car is clearly ailing with something that will exceed its value to fix, then sell. It's a more honest conversation when selling as-is, and you'll know you got full value out of it.

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Re: Buy a new car now or wait: what's the math say?

Post by 02nz » Mon Jul 08, 2019 4:18 pm

Is she looking to replace it with another MDX? The current one is near the end of its cycle (it was redesigned for model year 2014), so I probably wouldn't get another MDX right now - in a year or two it will look "old" again. (That doesn't matter to everyone, but it seems to matter for your wife.)

If you don't really need a three-row SUV, the Acura RDX is a great choice. The new one has received excellent reviews, and while I haven't driven it, every time I see one I think, "wow, that's a good-looking car." Haven't thought that of any Acura in many years. It's a "compact" crossover but these have gotten pretty big.

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Re: Buy a new car now or wait: what's the math say?

Post by UnhandledException » Mon Jul 08, 2019 4:24 pm

Tamarind wrote:
Mon Jul 08, 2019 4:15 pm
I prefer to wait until the car is clearly ailing with something that will exceed its value to fix, then sell.
This is a terrible idea. I drive a 1991 Acura and I am still waiting for the cost of a repair to exceed the value of the car. At this rate, I will never get a new car. :)

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Re: Buy a new car now or wait: what's the math say?

Post by corn18 » Mon Jul 08, 2019 4:25 pm

02nz wrote:
Mon Jul 08, 2019 4:18 pm
Is she looking to replace it with another MDX? The current one is near the end of its cycle (it was redesigned for model year 2014), so I probably wouldn't get another MDX right now - in a year or two it will look "old" again. (That doesn't matter to everyone, but it seems to matter for your wife.)
She is not. She agrees with you and finds the new MDX not much better than her current MDX.

She hasn't really started looking yet, but she seems to be gravitating to the X3, Q5, GLC and Macan type of replacements. I am leaning towards a Highlander, Ascent or Santa Fe. There's enough in the car fund for any of them, but my choices result in enough left to seriously jump start the next car.
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Re: Buy a new car now or wait: what's the math say?

Post by anoop » Mon Jul 08, 2019 4:49 pm

corn18 wrote:
Mon Jul 08, 2019 4:25 pm
02nz wrote:
Mon Jul 08, 2019 4:18 pm
Is she looking to replace it with another MDX? The current one is near the end of its cycle (it was redesigned for model year 2014), so I probably wouldn't get another MDX right now - in a year or two it will look "old" again. (That doesn't matter to everyone, but it seems to matter for your wife.)
She is not. She agrees with you and finds the new MDX not much better than her current MDX.

She hasn't really started looking yet, but she seems to be gravitating to the X3, Q5, GLC and Macan type of replacements. I am leaning towards a Highlander, Ascent or Santa Fe. There's enough in the car fund for any of them, but my choices result in enough left to seriously jump start the next car.
The German cars will cost a lot more to maintain and likely insure (expensive to fix after an accident). I was surprised by how much (almost 20% if I remember correctly) my insurance dropped when going from a 4 year old 328i to a new RDX. Although I never paid for any services with BMW, it was the last year they provided full 4 yr/50k mile free maintenance and I also bought an extended maintenance to 100K which cost around $1800. I was surprised at how little the RDX cost at the first service -- < $100 for oil change and tire rotation. So factor that in. All the European SUVs cited are RDX class, not MDX, but they would likely set you back as much as an MDX.

To answer your original question -- you will pay more in taxes and licensing fees with a new car. But I also don't think these things should be only about math. At some point, if something excites you and you can afford it, you should go for it.

One word of caution--going from an MDX to the German cars, you might take seat comfort for granted. Pay careful attention to that during test drives. There have been many cases of buyers remorse.

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Re: Buy a new car now or wait: what's the math say?

Post by 02nz » Mon Jul 08, 2019 5:05 pm

corn18 wrote:
Mon Jul 08, 2019 4:25 pm
02nz wrote:
Mon Jul 08, 2019 4:18 pm
Is she looking to replace it with another MDX? The current one is near the end of its cycle (it was redesigned for model year 2014), so I probably wouldn't get another MDX right now - in a year or two it will look "old" again. (That doesn't matter to everyone, but it seems to matter for your wife.)
She is not. She agrees with you and finds the new MDX not much better than her current MDX.

She hasn't really started looking yet, but she seems to be gravitating to the X3, Q5, GLC and Macan type of replacements. I am leaning towards a Highlander, Ascent or Santa Fe. There's enough in the car fund for any of them, but my choices result in enough left to seriously jump start the next car.
We have a Macan and previous had a (current-gen) GLC in the household. The GLC is a nice car, but interior fit and finish isn't up to the Macan's standard. The ride is a little weird - I found it too soft, yet also too harsh. It wallows in the corners but when it hits minor impacts (like those light deflectors in the road) you really feel it. I think it's at least partly due to the use of run-flat tires.

The Macan is a bit pricier (and you really need to exercise restraint with the options list - it's possible to buy a Macan for over $100K). The base 2.0-liter is perfectly adequate. It handles better than anything else in its class, and it's still very comfortable. I think it's also the best-looking of the small-ish luxury SUVs. The Macan uses the platform of the previous-gen Q5, but it is not badge-engineered. It drives nothing like (much sportier than) the Q5.

The Q5 is a very, very nice car. But it's pretty ubiquitous and rather bland. And now it's made in Mexico. Audi's parent company, VW, doesn't have a great track record with its Mexican-made cars, and the current Q5 is too new to have much of a reliability record.

The X3 is a sporty car. I haven't driven the current gen.

I'd add the Mazda CX-5 (2-row) and CX-9 (3-row) to the shopping list. Especially in the upper trims, they are nearly as nice as the luxury brands. And they're better-looking and -driving than the competitors from Toyota, Honda, Subaru, etc.

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Re: Buy a new car now or wait: what's the math say?

Post by H-Town » Mon Jul 08, 2019 5:36 pm

corn18 wrote:
Mon Jul 08, 2019 4:10 pm
Well, my wife is driving a perfectly good 2011 Acura MDX that has 130,000 miles on it. We have had enough set aside to buy a new one for the last 3 years. It has been sitting in FZDXX earning around 2.2%. She is getting the itch for a new car, and I am having trouble figuring out why she should wait. The money can sit there longer and earn 2.2%, the depreciation is pretty flat and maintenance is just normal car stuff at this point. So is the math as simple as we earn 2.2% more each year we wait?
Get her what she wants.

Side note: that's why car companies do so well and I benefit as an investor. When people said they buy a new car and drive it 10+ years or until the wheels fall off, most of the time they buy another new car much sooner then they should. Not saying it's good or bad, but people tend to overestimate the time they'll keep the car. It'll the same ole new safety features, fancy tech, and just a neat looking new car.

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Re: Buy a new car now or wait: what's the math say?

Post by Lee_WSP » Mon Jul 08, 2019 6:24 pm

corn18 wrote:
Mon Jul 08, 2019 4:14 pm
corn18 wrote:
Mon Jul 08, 2019 4:10 pm
Well, my wife is driving a perfectly good 2011 Acura MDX that has 130,000 miles on it. We have had enough set aside to buy a new one for the last 3 years. It has been sitting in FZDXX earning around 2.2%. She is getting the itch for a new car, and I am having trouble figuring out why she should wait. The money can sit there longer and earn 2.2%, the depreciation is pretty flat and maintenance is just normal car stuff at this point. So is the math as simple as we earn 2.2% more each year we wait?
Good point. The impact to our net worth is nil right now. Put a new car in there with its significant depreciation and it will go down fast.
Exactly. That is the downside. The upside though is that you have a newer car with more safety features and newer parts which may or may not need fixing later than your current car. And it'll be newer.

That said, if it's just a blip on your net worth, it's probably not going to impact you either way.

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Re: Buy a new car now or wait: what's the math say?

Post by randomguy » Mon Jul 08, 2019 7:14 pm

The new car is going in price by 2% or so a year so your not gaining much ground by saving. You are saving money by driving in the low depreciation/some what reliable year range where ownerships costs are pretty low. Running another 2-3 years (call it 150-175k miles) is probably the "responsible" way to go,.

Waiting gives time for more technology to show up. Buying now gets you current generation technology today. 2011 isn't too old but your probably missing blind spot, lane keeping, adaptive cruise control and decent headlights. Wait another 2 or 3 years and you might get a car that can do 90% of highway driving semiautonomously. Or maybe EVs will become available at affordable prices with either the Model Y or one of the annouced Audi, BMW, or VW SUV option set for 2020-2021.

GLC is a pretty old model at this point (2015?) but the RDX, X3, XC60 and Q5 are all 2018/2019 models. The lexus NX is a sort of old model and has some polarizing stylying:). The Mazda cx5 with a turbo is worth a drive also depending on why she wants the luxury car versus the mainstream brand. It sort of splits the difference of being nicer than a CRV but definitely a notch below Q5.

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Re: Buy a new car now or wait: what's the math say?

Post by snackdog » Mon Jul 08, 2019 8:43 pm

There is an opportunity cost of the "cash drag" of having this money uninvested, but you have already accepted that. It is far better to +2% on your money than negative 10-20% per year in car depreciation plus higher insurance costs. You could run a discounted cash flow calc with the money invested as a reference case and the money poured into the new car now, in one year, in two years, etc then look at the differences in NPV.

However, when it comes to making or keeping spouses happy, math is rarely part of the equation.

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Re: Buy a new car now or wait: what's the math say?

Post by Tamarind » Mon Jul 08, 2019 8:53 pm

UnhandledException wrote:
Mon Jul 08, 2019 4:24 pm
Tamarind wrote:
Mon Jul 08, 2019 4:15 pm
I prefer to wait until the car is clearly ailing with something that will exceed its value to fix, then sell.
This is a terrible idea. I drive a 1991 Acura and I am still waiting for the cost of a repair to exceed the value of the car. At this rate, I will never get a new car. :)
That is precisely the idea. :sharebeer

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Re: Buy a new car now or wait: what's the math say?

Post by rascott » Mon Jul 08, 2019 9:27 pm

Cars are basically about how money you want to light on fire every year. I try to buy lightly used entry-luxury cars.....under 40k miles. And then drive them until just past the point of embarrassment. Obviously need to find a reliable make/model....but I'm finding that most cars are fairly reliable these days. I've never owned a European brand, however.

I keep an eye on depreciation costs more than anything.

I have no idea when I'll ever buy a new car. I figured once I hit a certain NW...it would be ok. I'm past that point and still don't feel anywhere close to spending that kind of money. I may literally never buy a new one.....heck, I've bought houses cheaper than a lot of new luxury cars.

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Re: Buy a new car now or wait: what's the math say?

Post by Watty » Mon Jul 08, 2019 9:44 pm

What type of car do you drive?

It might make sense for you to swap cars with your wife until you feel comfortable with buying a replacement.

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Re: Buy a new car now or wait: what's the math say?

Post by kinless » Mon Jul 08, 2019 9:51 pm

H-Town wrote:
Mon Jul 08, 2019 5:36 pm
When people said they buy a new car and drive it 10+ years or until the wheels fall off, most of the time they buy another new car much sooner then they should. Not saying it's good or bad, but people tend to overestimate the time they'll keep the car. It'll the same ole new safety features, fancy tech, and just a neat looking new car.
You could be right. Anecdotally, I'm still driving a 15 year-old Saturn purchased brand new and at this point only has 125k miles on it; could probably last another 10-15 years. But to your point there is a tiny itch for a new ride when I said I'd keep this car forever. Tastes can change!
randomguy wrote:
Mon Jul 08, 2019 7:14 pm
Waiting gives time for more technology to show up. Buying now gets you current generation technology today. 2011 isn't too old but your probably missing blind spot, lane keeping, adaptive cruise control and decent headlights. Wait another 2 or 3 years and you might get a car that can do 90% of highway driving semiautonomously. Or maybe EVs will become available at affordable prices with either the Model Y or one of the annouced Audi, BMW, or VW SUV option set for 2020-2021.
Absolutely. I personally think we're still in the middle of a crossroads with the vehicle industry between all the autonomous driver safety features and electric/hybrid technology over the next decade. Even with all the advancements in automotive technology in just the last 5 years, we're still in the middle of a transition with all car makers catching up to their competition, and anything you buy today may be grossly outdated in just another 5 years. I would love to buy a new compact SUV for 2020 but afraid I will envy the guy next to me with his Level 4 autonomous plug-in hybrid SUV in 2025 lol.

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Re: Buy a new car now or wait: what's the math say?

Post by Cycle » Mon Jul 08, 2019 9:52 pm

We have a 2011 CRV w/ 90k miles on it. It is the last non-self driving car we will have, possibly even the last personal car. I'd hold onto that Acura for another 5 years and reassess at that time. The rationale would be to avoid a huge depreciation cliff event as a result of autonomous tech panning out.

Even if in 5 years they aren't fully autonomous, they will certainly be fully autonomous on the highway in good driving conditions. The car companies predict they will have this level of autonomy by 2020, though i'm skeptical
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Re: Buy a new car now or wait: what's the math say?

Post by anoop » Mon Jul 08, 2019 10:26 pm

I'm not as optimistic about level 4 automation and beyond. The only piece of tech that has actually added value since my last low tech car (when ABS and traction control were cool), is the backup camera and maybe parking sensors. I am so pessimistic in fact that I don't think we will ever get there.

There's going to be no cliff where cars suddenly become worthless, unless the govt. steps in and say "no more gasoline cars" after year x or some such thing, in which case IC vehicles would become worthless.

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Re: Buy a new car now or wait: what's the math say?

Post by Flyer24 » Mon Jul 08, 2019 10:42 pm

I vote for time to make the purchase. My wife will not drive one over 100K miles.

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Re: Buy a new car now or wait: what's the math say?

Post by randomguy » Mon Jul 08, 2019 11:05 pm

Cycle wrote:
Mon Jul 08, 2019 9:52 pm
We have a 2011 CRV w/ 90k miles on it. It is the last non-self driving car we will have, possibly even the last personal car. I'd hold onto that Acura for another 5 years and reassess at that time. The rationale would be to avoid a huge depreciation cliff event as a result of autonomous tech panning out.

Even if in 5 years they aren't fully autonomous, they will certainly be fully autonomous on the highway in good driving conditions. The car companies predict they will have this level of autonomy by 2020, though i'm skeptical
The problems comes in 5 years when the autonomous car is still 5 years out and now you need a new car.:) Imagine that something like GM supercruise 2.0 is standard. DO you buy in or do you decide man in 2 years we will get something that works on local streets also. Waiting for tech is a tough game to play.

I doubt there will be a huge depreciation cliff from either self driving tech or EVs or anything else. The markets just move too slowly. In 5 years the person buying your 20k SUV (50k new) will not be able to afford the 60k self driving SUV. It will not be an option. They will buy the 5 year old SUV that has slightly better tech than what they are driving and will go the next car will have those features.

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Re: Buy a new car now or wait: what's the math say?

Post by grabiner » Mon Jul 08, 2019 11:37 pm

corn18 wrote:
Mon Jul 08, 2019 4:10 pm
Well, my wife is driving a perfectly good 2011 Acura MDX that has 130,000 miles on it. We have had enough set aside to buy a new one for the last 3 years. It has been sitting in FZDXX earning around 2.2%. She is getting the itch for a new car, and I am having trouble figuring out why she should wait. The money can sit there longer and earn 2.2%, the depreciation is pretty flat and maintenance is just normal car stuff at this point. So is the math as simple as we earn 2.2% more each year we wait?
Your cash is basically keeping pace with inflation, so you aren't gaining anything in particular by leaving the cash sitting to buy something; it will buy something of the same value next year.

The math still favors waiting, for two reasons. Depreciation is not linear, as cars depreciate more in their early years; therefore, the longer you keep your cars, the less per year you lose to depreciation. In addition, there is a transaction cost. When you trade in a used car, you lose the difference between the dealer value and the trade-in value of the car. Again, you reduce the amount you lose by keeping cars longer. (Eventually, you reach a point of diminishing returns, when the cost of keeping the old car working plus the depreciation starts to increase.)

But it isn't all math. If you buy new cars more often, you have cars with the latest safety and convenience features. Essentially, buying a new car when you have a working used car is a consumption decision, and it is quite reasonable to spend more on consumption in areas which are important to you.
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Re: Buy a new car now or wait: what's the math say?

Post by Xrayman69 » Tue Jul 09, 2019 2:14 am

grabiner wrote:
Mon Jul 08, 2019 11:37 pm
corn18 wrote:
Mon Jul 08, 2019 4:10 pm
Well, my wife is driving a perfectly good 2011 Acura MDX that has 130,000 miles on it. We have had enough set aside to buy a new one for the last 3 years. It has been sitting in FZDXX earning around 2.2%. She is getting the itch for a new car, and I am having trouble figuring out why she should wait. The money can sit there longer and earn 2.2%, the depreciation is pretty flat and maintenance is just normal car stuff at this point. So is the math as simple as we earn 2.2% more each year we wait?
Your cash is basically keeping pace with inflation, so you aren't gaining anything in particular by leaving the cash sitting to buy something; it will buy something of the same value next year.

The math still favors waiting, for two reasons. Depreciation is not linear, as cars depreciate more in their early years; therefore, the longer you keep your cars, the less per year you lose to depreciation. In addition, there is a transaction cost. When you trade in a used car, you lose the difference between the dealer value and the trade-in value of the car. Again, you reduce the amount you lose by keeping cars longer. (Eventually, you reach a point of diminishing returns, when the cost of keeping the old car working plus the depreciation starts to increase.)

But it isn't all math. If you buy new cars more often, you have cars with the latest safety and convenience features. Essentially, buying a new car when you have a working used car is a consumption decision, and it is quite reasonable to spend more on consumption in areas which are important to you.
Is the 2.2% interest also hit by income and possibly state taxes thus furthering the drag to actually around 1,7%?

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Re: Buy a new car now or wait: what's the math say?

Post by aquaman » Tue Jul 09, 2019 9:30 am

anoop wrote:
Mon Jul 08, 2019 4:49 pm
The German cars will cost a lot more to maintain and likely insure (expensive to fix after an accident).
This is a commonly repeated fallacy. In reality, there are plenty of German models that are actually extremely reliable and are pretty inexpensive to maintain. One of the reasons that the above fallacy is still around, is because the Germans also produce a number of much higher performance, feature laden models that are a lot less reliable and are significantly more expensive to maintain.

So, what people have a tendency to do is, for instance, to read about the expense and the subpar reliability of certain BMW 7-series models and then extrapolate this to all BMW's. In reality, other than the BMW label, something like a 328i has nothing to do with a 750i, for instance, and their ownership costs are going to be orders of magnitude different.

Likewise, a blanket statement that German cars are more expensive to insure is also untrue. Depending on the year and the model, the parts costs are actually not necessarily different. More importantly, the parts costs are actually just one out of a number of factors that affect insurance costs. Depending on your driver profile, higher performance cars can be more expensive to insure (their drivers tend to be more aggressive, which increases the severity of the crashes); certain cars protect their occupants better than others; certain cars may protect their occupants well, but at the expense of increasing the severity of the other vehicles' damage, etc... Likewise, certain cars can be more expensive to insure with certain carriers, while the exact opposite would be true with other carriers.

The point here is to avoid assumptions that the ownership costs of all German cars will necessarily be higher, that all Japanese cars will necessarily be more reliable (speaking of the Acura MDX in particular, the older models had a major problem with their transmissions, which was a frequent and very expensive failure point), etc... Instead, you need to look into each model that you're considering.
I was surprised at how little the RDX cost at the first service -- < $100 for oil change and tire rotation.
For whatever reason, this point comes up all the time without people realizing that they're comparing apples and oranges. Most German cars use synthetic oil, which requires an oil change every 10K - 13K miles. A lot of Japanese cars use conventional oil, which requires an oil change every 5K - 7K miles.

I am not advocating German over Japanese or vice versa, as it's a pointless comparison without drilling down into the specific models, years and options. I am saying that people choosing their cars based on all these rules of thumb fail to realize that with a little bit of research they could be driving better cars for less.

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Re: Buy a new car now or wait: what's the math say?

Post by Olemiss540 » Tue Jul 09, 2019 12:00 pm

aquaman wrote:
Tue Jul 09, 2019 9:30 am
anoop wrote:
Mon Jul 08, 2019 4:49 pm
The German cars will cost a lot more to maintain and likely insure (expensive to fix after an accident).
This is a commonly repeated fallacy. In reality, there are plenty of German models that are actually extremely reliable and are pretty inexpensive to maintain. One of the reasons that the above fallacy is still around, is because the Germans also produce a number of much higher performance, feature laden models that are a lot less reliable and are significantly more expensive to maintain.

So, what people have a tendency to do is, for instance, to read about the expense and the subpar reliability of certain BMW 7-series models and then extrapolate this to all BMW's. In reality, other than the BMW label, something like a 328i has nothing to do with a 750i, for instance, and their ownership costs are going to be orders of magnitude different.

Likewise, a blanket statement that German cars are more expensive to insure is also untrue. Depending on the year and the model, the parts costs are actually not necessarily different. More importantly, the parts costs are actually just one out of a number of factors that affect insurance costs. Depending on your driver profile, higher performance cars can be more expensive to insure (their drivers tend to be more aggressive, which increases the severity of the crashes); certain cars protect their occupants better than others; certain cars may protect their occupants well, but at the expense of increasing the severity of the other vehicles' damage, etc... Likewise, certain cars can be more expensive to insure with certain carriers, while the exact opposite would be true with other carriers.

The point here is to avoid assumptions that the ownership costs of all German cars will necessarily be higher, that all Japanese cars will necessarily be more reliable (speaking of the Acura MDX in particular, the older models had a major problem with their transmissions, which was a frequent and very expensive failure point), etc... Instead, you need to look into each model that you're considering.
I was surprised at how little the RDX cost at the first service -- < $100 for oil change and tire rotation.
For whatever reason, this point comes up all the time without people realizing that they're comparing apples and oranges. Most German cars use synthetic oil, which requires an oil change every 10K - 13K miles. A lot of Japanese cars use conventional oil, which requires an oil change every 5K - 7K miles.

I am not advocating German over Japanese or vice versa, as it's a pointless comparison without drilling down into the specific models, years and options. I am saying that people choosing their cars based on all these rules of thumb fail to realize that with a little bit of research they could be driving better cars for less.
BMW honk here. If you think the generalization that a German car is more expensive to maintain than a Japanese car is false you have obviously been blinded by brand marketing. There is zero comparison when comparing like for like models that the German car GENERALLY and almost certainly will average higher repair costs.

Brake pads on my relative's standard x5 (front axle only) were just installed at a 4-figure cost if you are looking for anecdotal experience. Dealer/mechanic costs compared to non-German counterparts are EXTREMELY biased. Ever think the mechanic working on a 130k dollar 7 series will charge the exact same labor rate as one working on a 38k 3 series?
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Re: Buy a new car now or wait: what's the math say?

Post by aquaman » Tue Jul 09, 2019 12:34 pm

Olemiss540 wrote:
Tue Jul 09, 2019 12:00 pm
There is zero comparison when comparing like for like models that the German car GENERALLY and almost certainly will average higher repair costs.
You make a broad statement, such as the one that I am quoting, and then give the example of a brake job on an X5 :confused

Every brand and model has certain nuances and certain services that surprise those who aren't familiar with the brand and model. When it comes to BMW's, the two things (other than the synthetic oil changes, which I already addressed above) that are always brought up as examples of "extremely expensive maintenance" are brake jobs and battery replacements. Because of the location of the battery, battery replacements on some (not all) BMW models do cost substantially more, especially if you use a dealer to do the programming. Likewise, BMW brakes are designed in a way that frequently causes brake pads and rotors to wear out simultaneously, and frequently on all four wheels. BMW dealers take the position that even to the extent the rotors are not worn out below spec, they should not be turned but must, instead, be replaced at the same time that you replace your pads.

There's nothing complicated or expensive about BMW's pads, rotors or sensors or about the labor that goes into it. In fact, both the parts and the labor costs, both at dealers and independents, are very similar to those that you would pay with any other mainstream luxury brand (Acura, Lexus, Infiniti, Mercedes, etc...). What tends to happen though is that on a BMW, you are just a lot more likely to end up having all 4 pads, rotors and sensors replaced simultaneously, which is how you end up with an expensive bill.

There are several well known ways to mitigate against those types of expenses on BMW's, but overall, your brake related expenses are going to be higher on all BMW models. Again, other brands and models have their own "quirks" (I use quotation marks here because BMW brakes are intentionally designed in a way to maximize certain characteristics; as a result, they wear out faster, but BMW's position is that it's an acceptable downside for the performance) like that. This is the reason that you need to be comparing the overall maintenance and other ownership expenses over specified time and mileage periods.

Finally, an X5, while anything but an exotic vehicle, is a very poor model to look at. It does generally have higher maintenance costs than the competition from its Japanese counterparts, and that's the least of the issues with the X5.

P.S.
I am not mentioning the expenses (and the pros and cons) associated with runflat tires, as they are not specific to BMW's and are a separate conversation. In short, for a certain category of buyers, runflat tires are actually a plus. For many other ones, runflat tires is a prime example of the reasons that they've switched away from BMW's.

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Re: Buy a new car now or wait: what's the math say?

Post by Olemiss540 » Tue Jul 09, 2019 1:25 pm

aquaman wrote:
Tue Jul 09, 2019 12:34 pm
Olemiss540 wrote:
Tue Jul 09, 2019 12:00 pm
There is zero comparison when comparing like for like models that the German car GENERALLY and almost certainly will average higher repair costs.
You make a broad statement, such as the one that I am quoting, and then give the example of a brake job on an X5 :confused

Every brand and model has certain nuances and certain services that surprise those who aren't familiar with the brand and model. When it comes to BMW's, the two things (other than the synthetic oil changes, which I already addressed above) that are always brought up as examples of "extremely expensive maintenance" are brake jobs and battery replacements. Because of the location of the battery, battery replacements on some (not all) BMW models do cost substantially more, especially if you use a dealer to do the programming. Likewise, BMW brakes are designed in a way that frequently causes brake pads and rotors to wear out simultaneously, and frequently on all four wheels. BMW dealers take the position that even to the extent the rotors are not worn out below spec, they should not be turned but must, instead, be replaced at the same time that you replace your pads.

There's nothing complicated or expensive about BMW's pads, rotors or sensors or about the labor that goes into it. In fact, both the parts and the labor costs, both at dealers and independents, are very similar to those that you would pay with any other mainstream luxury brand (Acura, Lexus, Infiniti, Mercedes, etc...). What tends to happen though is that on a BMW, you are just a lot more likely to end up having all 4 pads, rotors and sensors replaced simultaneously, which is how you end up with an expensive bill.

There are several well known ways to mitigate against those types of expenses on BMW's, but overall, your brake related expenses are going to be higher on all BMW models. Again, other brands and models have their own "quirks" (I use quotation marks here because BMW brakes are intentionally designed in a way to maximize certain characteristics; as a result, they wear out faster, but BMW's position is that it's an acceptable downside for the performance) like that. This is the reason that you need to be comparing the overall maintenance and other ownership expenses over specified time and mileage periods.

Finally, an X5, while anything but an exotic vehicle, is a very poor model to look at. It does generally have higher maintenance costs than the competition from its Japanese counterparts, and that's the least of the issues with the X5.

P.S.
I am not mentioning the expenses (and the pros and cons) associated with runflat tires, as they are not specific to BMW's and are a separate conversation. In short, for a certain category of buyers, runflat tires are actually a plus. For many other ones, runflat tires is a prime example of the reasons that they've switched away from BMW's.
Sounds like you have been sold a very expensive bill of goods. I have owned/raced BMWs for a long time so trying to speak from direct experience. Ultimate driving machines are built with some inherent tradeoffs to assist in improving feel and performance. https://www.consumerreports.org/car-mai ... ownership/ I am sure you have had great luck and will cover why all 3rd party sources have been slanted due to 7 series reliability so continuing this dialogue seems pointless.

Sorry OP.will quit derailing this thread with pointless bantering and good luck on your vehicle search!
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Re: Buy a new car now or wait: what's the math say?

Post by corn18 » Tue Jul 09, 2019 1:34 pm

Olemiss540 wrote:
Tue Jul 09, 2019 1:25 pm
Sorry OP.will quit derailing this thread with pointless bantering and good luck on your vehicle search!
Not derailing at all. I am reading all of this with great interest. Fingers crossed she likes the CX-5. But she has the budget for any 2 row she wants that isn't an M or SQ type.
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Re: Buy a new car now or wait: what's the math say?

Post by sunny_socal » Tue Jul 09, 2019 2:06 pm

That Acura will stay on the road until you get sick of it. We still have our 2007 Honda Pilot, was my wife's before and now our 16-yr old has it.

Wife got a Volvo XC90, highly recommended. Costs less than Audi/BMW, best vehicle we've ever owned. Look good, drives great, plenty of bells & whistles, likely the safest SUV on the road.

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Re: Buy a new car now or wait: what's the math say?

Post by aquaman » Tue Jul 09, 2019 2:08 pm

Olemiss540 wrote:
Tue Jul 09, 2019 1:25 pm
Sounds like you have been sold a very expensive bill of goods. I have owned/raced BMWs for a long time so trying to speak from direct experience.
Excellent, so then why would you bring up an X5 or the brake costs, which you should know are not at all representative of the overall maintenance experience? It's perfectly fine to disagree with my posts, but you are posting very clear red herrings.
https://www.consumerreports.org/car-mai ... ownership/ I am sure you have had great luck and will cover why all 3rd party sources have been slanted due to 7 series reliability so continuing this dialogue seems pointless.
Speaking of pointless, a CR chart that "detail(s) those average 12-month costs for owners of 2014 and 2007 models for the brands about which we have survey data" tells you absolutely nothing about the reliability of any specific models or any specific options, particularly if they are not 2014 or 2007 model years.

I am also not in any way advocating for BMW. I am one of many folks out there who do not like the direction in which BMW has gone, so I have switched to other manufacturers and do not currently own any BMW models.

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Re: Buy a new car now or wait: what's the math say?

Post by corn18 » Tue Jul 09, 2019 2:22 pm

sunny_socal wrote:
Tue Jul 09, 2019 2:06 pm
That Acura will stay on the road until you get sick of it. We still have our 2007 Honda Pilot, was my wife's before and now our 16-yr old has it.

Wife got a Volvo XC90, highly recommended. Costs less than Audi/BMW, best vehicle we've ever owned. Look good, drives great, plenty of bells & whistles, likely the safest SUV on the road.
Is the Volvo in the Acura class of maintenance costs or the Merc/BMW class? I have heard great things about them, but they ain't cheap. Priced the XC60 T6 Inscription @ $61k MSRP.
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Re: Buy a new car now or wait: what's the math say?

Post by bottlecap » Tue Jul 09, 2019 2:35 pm

The "maths" always say a good running car is better to keep.

I love my wife. She got excited about getting a "new" 8 year old vehicle with a 103,000 miles on it.

If you can't find one of those wives, the best thing for you to do is buy her a new car to fix her itch and you keep her old car until it becomes unserviceable. Rinse and repeat.

Good luck,

JT

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Re: Buy a new car now or wait: what's the math say?

Post by ohai » Tue Jul 09, 2019 2:39 pm

Why argue about cost of ownership when some companies have already quantified this for you?

https://www.edmunds.com/bmw/3-series/20 ... =401729243
https://www.edmunds.com/acura/mdx/2019/cost-to-own/
https://www.edmunds.com/lexus/gs-350/2019/cost-to-own/
https://www.edmunds.com/lexus/is-300/2019/cost-to-own/
https://www.edmunds.com/bmw/x3/2019/cost-to-own/

It seems that statistically, the 5y ownership cost for BMW is higher, price adjusted, by about 10% to 20% compared to a non-German luxury car, i.e. Acura or more relevantly, Lexus. Whether this comes from depreciation, maintenance, or other reasons is probably not material to your decision process.

I suspect the same comparison will be valid for Audi, Mercedes, or another German luxury brand, but that can be easily tested.

Some people will undoubtedly try to debunk these statistics with anecdotal evidence, which is a weak argument in general.

Maybe you don't care about the cost difference because you just like BMWs. That's fine too.

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Re: Buy a new car now or wait: what's the math say?

Post by jman36 » Tue Jul 09, 2019 3:03 pm

02nz wrote:
Mon Jul 08, 2019 4:18 pm

She is not. She agrees with you and finds the new MDX not much better than her current MDX.

She hasn't really started looking yet, but she seems to be gravitating to the X3, Q5, GLC and Macan type of replacements. I am leaning towards a Highlander, Ascent or Santa Fe. There's enough in the car fund for any of them, but my choices result in enough left to seriously jump start the next car.
Specific note : If your wife does decide on a new X3 , you are now able to spec out the 3.0 with all season Non-Run Flats + Space-saver spare . My last two cars came with Run-Flats and I dreaded getting puncture knowing the tire cannot be plugged. You end up replacing the tire at $250/$300(x3/all seasons) vs a $15 plug if you punctured a Non-Run flat through the thread.

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Re: Buy a new car now or wait: what's the math say?

Post by randomguy » Tue Jul 09, 2019 3:08 pm

corn18 wrote:
Tue Jul 09, 2019 2:22 pm
sunny_socal wrote:
Tue Jul 09, 2019 2:06 pm
That Acura will stay on the road until you get sick of it. We still have our 2007 Honda Pilot, was my wife's before and now our 16-yr old has it.

Wife got a Volvo XC90, highly recommended. Costs less than Audi/BMW, best vehicle we've ever owned. Look good, drives great, plenty of bells & whistles, likely the safest SUV on the road.
Is the Volvo in the Acura class of maintenance costs or the Merc/BMW class? I have heard great things about them, but they ain't cheap. Priced the XC60 T6 Inscription @ $61k MSRP.
It is the jaguar Land Rover class looking up at Audi/bme🙂. Volvo made some major changes to their platforms and they have had tons of teething issues. You can Google around for the list. Long term reliability is unknown(pretty much none of them have over 100k since the 2016 reworks) but most sources expect below average.

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Re: Buy a new car now or wait: what's the math say?

Post by ssquared87 » Tue Jul 09, 2019 3:33 pm

02nz wrote:
Mon Jul 08, 2019 5:05 pm
corn18 wrote:
Mon Jul 08, 2019 4:25 pm
02nz wrote:
Mon Jul 08, 2019 4:18 pm
Is she looking to replace it with another MDX? The current one is near the end of its cycle (it was redesigned for model year 2014), so I probably wouldn't get another MDX right now - in a year or two it will look "old" again. (That doesn't matter to everyone, but it seems to matter for your wife.)
She is not. She agrees with you and finds the new MDX not much better than her current MDX.

She hasn't really started looking yet, but she seems to be gravitating to the X3, Q5, GLC and Macan type of replacements. I am leaning towards a Highlander, Ascent or Santa Fe. There's enough in the car fund for any of them, but my choices result in enough left to seriously jump start the next car.
We have a Macan and previous had a (current-gen) GLC in the household. The GLC is a nice car, but interior fit and finish isn't up to the Macan's standard. The ride is a little weird - I found it too soft, yet also too harsh. It wallows in the corners but when it hits minor impacts (like those light deflectors in the road) you really feel it. I think it's at least partly due to the use of run-flat tires.

The Macan is a bit pricier (and you really need to exercise restraint with the options list - it's possible to buy a Macan for over $100K). The base 2.0-liter is perfectly adequate. It handles better than anything else in its class, and it's still very comfortable. I think it's also the best-looking of the small-ish luxury SUVs. The Macan uses the platform of the previous-gen Q5, but it is not badge-engineered. It drives nothing like (much sportier than) the Q5.

The Q5 is a very, very nice car. But it's pretty ubiquitous and rather bland. And now it's made in Mexico. Audi's parent company, VW, doesn't have a great track record with its Mexican-made cars, and the current Q5 is too new to have much of a reliability record.

The X3 is a sporty car. I haven't driven the current gen.

I'd add the Mazda CX-5 (2-row) and CX-9 (3-row) to the shopping list. Especially in the upper trims, they are nearly as nice as the luxury brands. And they're better-looking and -driving than the competitors from Toyota, Honda, Subaru, etc.
+1

The Macan and X3 (especially m40i version) are top of the class. The GLC looks nice but suffers poor build and ride quality. The Q5 is bland looking inside and out and has terrible steering.

Personally I'd hold onto the Acura unless I really hated it. Sounds like it has plenty of useful life left in it. The 2% return or whatever doesn't really matter, the longer you can hold onto the Acura, the more you're getting your money's worth out of the original purchase, and the joy from a new car fades pretty fast (and that's coming from an enthusiast). I'm happy holding onto a car I like for a long time and even getting used cars that I enjoy how they drive over getting a new car just because its new.

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Re: Buy a new car now or wait: what's the math say?

Post by sk2101 » Tue Jul 09, 2019 3:45 pm

corn18 wrote:
Tue Jul 09, 2019 2:22 pm
Is the Volvo in the Acura class of maintenance costs or the Merc/BMW class? I have heard great things about them, but they ain't cheap. Priced the XC60 T6 Inscription @ $61k MSRP.
Volvo maintenance and parts cost is equivalent of a Mercedes or BMW, but it will probably break more often. I do not recommend buying it if you intend to keep beyond warranty period. 2X Volvo owner.

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Re: Buy a new car now or wait: what's the math say?

Post by corn18 » Tue Jul 09, 2019 3:47 pm

Thanks to all for the valuable input. I got the answer to my question. The depreciation of the new car is what I was not accounting for. Her itch is not severe. She has a fun car, too (BMW Z4),so it's not like she is suffering.

I also hadn't considered the drag of having $50k sitting in cash for all these years waiting to buy a new car. I always followed the advice that any money you will need in the next 5 years should be in cash. As soon as i consider it fungible and dump it into my 60/40 retirement portfolio, the market will crash and the car will die.
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Re: Buy a new car now or wait: what's the math say?

Post by aquaman » Tue Jul 09, 2019 4:22 pm

Because those figures have always been highly inaccurate. A much better way of figuring it out is to go to the model and year specific online forums and to read about those models. This is especially effective for used models, and is a very good way of figuring out each model and year's actual reliability, trouble spots, maintenance and repair costs and ways to save money.
It seems that statistically, the 5y ownership cost for BMW is higher, price adjusted, by about 10% to 20% compared to a non-German luxury car, i.e. Acura or more relevantly, Lexus. Whether this comes from depreciation, maintenance, or other reasons is probably not material to your decision process.
I suppose it depends on whether you're buying a new or a used one. A number of German luxury models have very high depreciation in their early years. After that early depreciation cliff though, with a number of them depreciation actually stabilizes and becomes lower than those of their Japanese counterparts, all while having comparable reliability and maintenance costs.

Because of this, a number of German luxury models are extremely expensive to own when they're brand new, but start to represent a pretty good deal when they're slightly used. With a lot of Japanese luxury models, the exact opposite is true.

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Re: Buy a new car now or wait: what's the math say?

Post by ohai » Tue Jul 09, 2019 4:30 pm

aquaman wrote:
Tue Jul 09, 2019 4:22 pm
Because those figures have always been highly inaccurate. A much better way of figuring it out is to go to the model and year specific online forums and to read about those models. This is especially effective for used models, and is a very good way of figuring out each model and year's actual reliability, trouble spots, maintenance and repair costs and ways to save money.
It seems that statistically, the 5y ownership cost for BMW is higher, price adjusted, by about 10% to 20% compared to a non-German luxury car, i.e. Acura or more relevantly, Lexus. Whether this comes from depreciation, maintenance, or other reasons is probably not material to your decision process.
I suppose it depends on whether you're buying a new or a used one. A number of German luxury models have very high depreciation in their early years. After that early depreciation cliff though, with a number of them depreciation actually stabilizes and becomes lower than those of their Japanese counterparts, all while having comparable reliability and maintenance costs.

Because of this, a number of German luxury models are extremely expensive to own when they're brand new, but start to represent a pretty good deal when they're slightly used. With a lot of Japanese luxury models, the exact opposite is true.
Of course those numbers are not 100% accurate, but they do show a distinct trend that is most likely true. You might be able to find some special case - specific model year, extra attentive owner, tips and tricks, and so on - but you should probably still conclude that on average, the German cars are more expensive.

"Because of this, a number of German luxury models are extremely expensive to own when they're brand new, but start to represent a pretty good deal when they're slightly used. With a lot of Japanese luxury models, the exact opposite is true."

Do you have statistics that show this?

No data is 100% conclusive, but this data is the best indicator - better than your or my opinion, and better than one off personal accounts from some forum.

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Re: Buy a new car now or wait: what's the math say?

Post by aquaman » Tue Jul 09, 2019 4:46 pm

ohai wrote:
Tue Jul 09, 2019 4:30 pm
Of course those numbers are not 100% accurate, but they do show a distinct trend that is most likely true. You might be able to find some special case - specific model year, extra attentive owner, tips and tricks, and so on - but you should probably still conclude that on average, the German cars are more expensive.
If you look at the specific model forums, you will generally see a ton of data points (depends on the model, of course, as some makes and models have superb online forums, while others are just so-so) that have over the years analyzed and addressed Edmunds' "ownership cost" figures.

You don't have to trust their figures if you don't want to. Just use them to figure out how long various consumables (tires, brakes, etc...) last on the model that you are interested in, and then call up a couple of shops in your area to find out how much they'd charge for those. Then, go to the manufacturers' websites and pull up the online service manuals to see how frequently certain services are required. Get prices on those.

It'll definitely take more time than clicking a link on Edmunds' website, but is also going to be significantly more accurate.
"Because of this, a number of German luxury models are extremely expensive to own when they're brand new, but start to represent a pretty good deal when they're slightly used. With a lot of Japanese luxury models, the exact opposite is true."

Do you have statistics that show this?
Of course! The online price guides (not Edmunds' depreciation figures shown in your links, but the actual Edmunds/KBB FMV figures for each year, model and options) are imprecise, but they're good enough to give you a general idea about each vehicle's depreciation year to year. Just don't make the mistake that a lot of people make and calculate the first year depreciation based off the MSRP.
Last edited by aquaman on Tue Jul 09, 2019 4:48 pm, edited 1 time in total.

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Re: Buy a new car now or wait: what's the math say?

Post by ohai » Tue Jul 09, 2019 4:48 pm

aquaman wrote:
Tue Jul 09, 2019 4:46 pm
ohai wrote:
Tue Jul 09, 2019 4:30 pm
Of course those numbers are not 100% accurate, but they do show a distinct trend that is most likely true. You might be able to find some special case - specific model year, extra attentive owner, tips and tricks, and so on - but you should probably still conclude that on average, the German cars are more expensive.
If you look at the specific model forums, you will generally see a ton of data points (depends on the model, of course, as some makes and models have superb online forums, while others are just so-so) that have over the years analyzed and addressed Edmunds' "ownership cost" figures.

You don't have to trust their figures if you don't want to. Just use them to figure out how long various consumables (tires, brakes, etc...) last on the model that you are interested in, and then call up a couple of shops in your area to find out how much they'd charge for those. Then, go to the manufacturers' websites and pull up the online service manuals to see how frequently certain services are required. Get prices on those.

It'll definitely take more time than clicking a link on Edmunds' website, but is also going to be significantly more accurate.
"Because of this, a number of German luxury models are extremely expensive to own when they're brand new, but start to represent a pretty good deal when they're slightly used. With a lot of Japanese luxury models, the exact opposite is true."

Do you have statistics that show this?
Of course! The online price guides are imprecise, but they're good enough to give you a general idea about each vehicle's depreciation year to year. Just don't make the mistake that a lot of people make and calculate the first year depreciation based off the MSRP.
Ok. Let's say you are correct. Can you show any data? I can make any claim too, but you don't know it's correct without evidence.

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Re: Buy a new car now or wait: what's the math say?

Post by aquaman » Tue Jul 09, 2019 4:50 pm

ohai wrote:
Tue Jul 09, 2019 4:48 pm
Ok. Let's say you are correct. Can you show any data? I can make any claim too, but you don't know it's correct without evidence.
Sorry, I don't understand what you're asking. I just posted how you would go about obtaining the data yourself, which is the most accurate way of doing this.

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Re: Buy a new car now or wait: what's the math say?

Post by Xrayman69 » Tue Jul 09, 2019 5:27 pm

aquaman wrote:
Tue Jul 09, 2019 4:22 pm
Because those figures have always been highly inaccurate. A much better way of figuring it out is to go to the model and year specific online forums and to read about those models. This is especially effective for used models, and is a very good way of figuring out each model and year's actual reliability, trouble spots, maintenance and repair costs and ways to save money.
It seems that statistically, the 5y ownership cost for BMW is higher, price adjusted, by about 10% to 20% compared to a non-German luxury car, i.e. Acura or more relevantly, Lexus. Whether this comes from depreciation, maintenance, or other reasons is probably not material to your decision process.
I suppose it depends on whether you're buying a new or a used one. A number of German luxury models have very high depreciation in their early years. After that early depreciation cliff though, with a number of them depreciation actually stabilizes and becomes lower than those of their Japanese counterparts, all while having comparable reliability and maintenance costs.

Because of this, a number of German luxury models are extremely expensive to own when they're brand new, but start to represent a pretty good deal when they're slightly used. With a lot of Japanese luxury models, the exact opposite is true.
I’ve looked these depreciation “deals” with Porsche. These,”deals” don’t seem to translate too much to the buyer but more to the dealer when buying from an owner. The used car with anywhere from 5K -20k miles are essentially the same price considering the mileage. The 5K mile car is about 4K cheaper than original price and the 20K may only be 10-12 lower.

Maybe is just with Porsche but considering buying used saved me nothing other than having 1 -3 years less on the warranty for that “discount”, which didn’t seem worth the risk and not knowing how the first owner treated the car.

My understanding is that dealers love selling used cars for the markup and margin of buying very low and selling for what it’s “worth”. Sure they take the risk and storage fees if they don’t sell, but lowering the price usually moves it right off the lot if needed.

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Re: Buy a new car now or wait: what's the math say?

Post by ssquared87 » Tue Jul 09, 2019 6:02 pm

Xrayman69 wrote:
Tue Jul 09, 2019 5:27 pm
aquaman wrote:
Tue Jul 09, 2019 4:22 pm
Because those figures have always been highly inaccurate. A much better way of figuring it out is to go to the model and year specific online forums and to read about those models. This is especially effective for used models, and is a very good way of figuring out each model and year's actual reliability, trouble spots, maintenance and repair costs and ways to save money.
It seems that statistically, the 5y ownership cost for BMW is higher, price adjusted, by about 10% to 20% compared to a non-German luxury car, i.e. Acura or more relevantly, Lexus. Whether this comes from depreciation, maintenance, or other reasons is probably not material to your decision process.
I suppose it depends on whether you're buying a new or a used one. A number of German luxury models have very high depreciation in their early years. After that early depreciation cliff though, with a number of them depreciation actually stabilizes and becomes lower than those of their Japanese counterparts, all while having comparable reliability and maintenance costs.

Because of this, a number of German luxury models are extremely expensive to own when they're brand new, but start to represent a pretty good deal when they're slightly used. With a lot of Japanese luxury models, the exact opposite is true.
I’ve looked these depreciation “deals” with Porsche. These,”deals” don’t seem to translate too much to the buyer but more to the dealer when buying from an owner. The used car with anywhere from 5K -20k miles are essentially the same price considering the mileage. The 5K mile car is about 4K cheaper than original price and the 20K may only be 10-12 lower.

Maybe is just with Porsche but considering buying used saved me nothing other than having 1 -3 years less on the warranty for that “discount”, which didn’t seem worth the risk and not knowing how the first owner treated the car.

My understanding is that dealers love selling used cars for the markup and margin of buying very low and selling for what it’s “worth”. Sure they take the risk and storage fees if they don’t sell, but lowering the price usually moves it right off the lot if needed.
Porsche doesn't count, its very different than your run of the mill Audi, Mercedes, BMW....for whatever reason, Porsche depreciation (with a few exceptions) is extremely low, and unless there's a specific older model you want, it usually makes more sense to just buy a Porsche new (again, some of their models are less desirable and have more depreciation i.e. cayenne, Panamera). Back in 2015 I wanted a Cayman...I talked myself out of it and now 4 years later the same Cayman I wanted is selling for about $10k less than what it cost new. My 2017 BMW 5 series has lost 20k in value in half the time.

Audi, Mercedes, and BMW on the other hand drop like a rock after 2-4 years except for BMW M cars. Mercedes AMG used to depreciate even worse than standard Mercedes models, but now with them putting out such well regarded products, it will be interesting to see if that changes over the next few years.

randomguy
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Re: Buy a new car now or wait: what's the math say?

Post by randomguy » Tue Jul 09, 2019 8:21 pm

aquaman wrote:
Tue Jul 09, 2019 4:22 pm
A number of German luxury models have very high depreciation in their early years. After that early depreciation cliff though, with a number of them depreciation actually stabilizes and becomes lower than those of their Japanese counterparts, all while having comparable reliability and maintenance costs.

Because of this, a number of German luxury models are extremely expensive to own when they're brand new, but start to represent a pretty good deal when they're slightly used. With a lot of Japanese luxury models, the exact opposite is true.
I think the idea that BMW/AUID/MB have the same reliability maintenance cost as Lexus/Acura is the type of thing that most people will want to see numbers on given every other state I have seen suggets the exact opposite. Edmunds for example has the 5 year maintenance/repairs of a 2016 x3 at 19.5k to the 12.7 of a Lexus NX. And that is a car that will barely be over 100k miles.

Buying used might be the best way to go for german ownership but it is a stretch to call them good deals. More like slightly less worse ones:)

ssquared87
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Re: Buy a new car now or wait: what's the math say?

Post by ssquared87 » Tue Jul 09, 2019 10:19 pm

randomguy wrote:
Tue Jul 09, 2019 8:21 pm
aquaman wrote:
Tue Jul 09, 2019 4:22 pm
A number of German luxury models have very high depreciation in their early years. After that early depreciation cliff though, with a number of them depreciation actually stabilizes and becomes lower than those of their Japanese counterparts, all while having comparable reliability and maintenance costs.

Because of this, a number of German luxury models are extremely expensive to own when they're brand new, but start to represent a pretty good deal when they're slightly used. With a lot of Japanese luxury models, the exact opposite is true.
I think the idea that BMW/AUID/MB have the same reliability maintenance cost as Lexus/Acura is the type of thing that most people will want to see numbers on given every other state I have seen suggets the exact opposite. Edmunds for example has the 5 year maintenance/repairs of a 2016 x3 at 19.5k to the 12.7 of a Lexus NX. And that is a car that will barely be over 100k miles.

Buying used might be the best way to go for german ownership but it is a stretch to call them good deals. More like slightly less worse ones:)
There is no way an x3 will have $19.5k in maintenance and repairs in 5 years. BMW includes 4yr/50k mile warranty and 3 years of maintenance on all their models.
So basically they’re saying 1 year of paying for repairs out of pocket and 2 years of maintenance will be $19.5k? No way that’s possible. That has to include fuel, insurance and maybe even depreciation.

Just for reference, my 21 year old bmw M3 has required $2.5k maintenance over the last 3 years. I’ve had the work done at an independent BMW specialist. My 2011 328i had $4.7k in repairs and maintenance over 6 years and 70k miles. I’m counting any mechanical issues, fluid changes, brakes, wiper blades, tires pretty much any wear items. I have not included fuel, insurance, or depreciation. I also follow a more aggressive maintenance schedule than BMW requires (oil changes every 5k miles instead of 10, coolant changes every 2 years instead of 3 etc)

Both those cars have been just as reliable as my 2011 Acura TSX and 97 accord and more reliable than my 95 maxima (always had issues with emission sensors and for some reason the dealership screwed up every brake job I had them do on the car). I’ll reserve judgment on my 2017 5 series with 21k miles for now since it’s too new to judge, but I will say it’s been flawless in every way even though it’s the first year of the redesign. There’s not a single rattle or imperfection at all and I’m obsessive when it comes to noticing flaws in my cars.

randomguy
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Re: Buy a new car now or wait: what's the math say?

Post by randomguy » Tue Jul 09, 2019 11:37 pm

ssquared87 wrote:
Tue Jul 09, 2019 10:19 pm

There is no way an x3 will have $19.5k in maintenance and repairs in 5 years. BMW includes 4yr/50k mile warranty and 3 years of maintenance on all their models.
So basically they’re saying 1 year of paying for repairs out of pocket and 2 years of maintenance will be $19.5k? No way that’s possible. That has to include fuel, insurance and maybe even depreciation.

Just for reference, my 21 year old bmw M3 has required $2.5k maintenance over the last 3 years. I’ve had the work done at an independent BMW specialist. My 2011 328i had $4.7k in repairs and maintenance over 6 years and 70k miles. I’m counting any mechanical issues, fluid changes, brakes, wiper blades, tires pretty much any wear items. I have not included fuel, insurance, or depreciation. I also follow a more aggressive maintenance schedule than BMW requires (oil changes every 5k miles instead of 10, coolant changes every 2 years instead of 3 etc)

Both those cars have been just as reliable as my 2011 Acura TSX and 97 accord and more reliable than my 95 maxima (always had issues with emission sensors and for some reason the dealership screwed up every brake job I had them do on the car). I’ll reserve judgment on my 2017 5 series with 21k miles for now since it’s too new to judge, but I will say it’s been flawless in every way even though it’s the first year of the redesign. There’s not a single rattle or imperfection at all and I’m obsessive when it comes to noticing flaws in my cars.
Reread what I wrote. These are the costs for a 2016 X3. The maintenance coverage is gone. The warranty is also either gone or about to be gone.Do the edmunds numbers look high? I think so on every car but they use the same methodology. I am sure every Lexus owner thinks the cost given for them is also absurd.

But hey if you drove a more or less out of warranty 328i (assume you bout it at 3 years/30k) and went from like 30-100k for only 4.5k, you are winning the BMW game:) Most people haven't been so lucky. Hopefully the next 100k miles are just as cheap for you.

finite_difference
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Re: Buy a new car now or wait: what's the math say?

Post by finite_difference » Wed Jul 10, 2019 12:07 am

aquaman wrote:
Tue Jul 09, 2019 4:46 pm
ohai wrote:
Tue Jul 09, 2019 4:30 pm
Of course those numbers are not 100% accurate, but they do show a distinct trend that is most likely true. You might be able to find some special case - specific model year, extra attentive owner, tips and tricks, and so on - but you should probably still conclude that on average, the German cars are more expensive.
If you look at the specific model forums, you will generally see a ton of data points (depends on the model, of course, as some makes and models have superb online forums, while others are just so-so) that have over the years analyzed and addressed Edmunds' "ownership cost" figures.

You don't have to trust their figures if you don't want to. Just use them to figure out how long various consumables (tires, brakes, etc...) last on the model that you are interested in, and then call up a couple of shops in your area to find out how much they'd charge for those. Then, go to the manufacturers' websites and pull up the online service manuals to see how frequently certain services are required. Get prices on those.

It'll definitely take more time than clicking a link on Edmunds' website, but is also going to be significantly more accurate.
"Because of this, a number of German luxury models are extremely expensive to own when they're brand new, but start to represent a pretty good deal when they're slightly used. With a lot of Japanese luxury models, the exact opposite is true."

Do you have statistics that show this?
Of course! The online price guides (not Edmunds' depreciation figures shown in your links, but the actual Edmunds/KBB FMV figures for each year, model and options) are imprecise, but they're good enough to give you a general idea about each vehicle's depreciation year to year. Just don't make the mistake that a lot of people make and calculate the first year depreciation based off the MSRP.
Can you name some make/model/years? I’m interested in knowing what some of the good deals are. Thanks!
The most precious gift we can offer anyone is our attention. - Thich Nhat Hanh

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