Luxury Vehicle Purchase Timing - What's Best?

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kcattorney
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Luxury Vehicle Purchase Timing - What's Best?

Post by kcattorney » Thu Jun 14, 2018 8:31 am

Somewhat related to my A8L saga, but really related to a broad range of vehicles - let's say "luxury" vehicles. If you've read my A8L thread, you know that I've nearly gotten it sorted out, definitely to the point where it is very driveable and I could sell it to a private party (with full disclosures) or run it through the dealer auction. It isn't an expensive car - it had ~150,000 miles on it when I bought it about 10 months ago and I paid ~$8,000 for it at the dealer auction. Decision on my plate is to love it or list it, which leads to this thread topic.

We are all well aware of the tremendous depreciation hit you take with a new vehicle, plus the sales tax, property tax and insurance costs of a new vehicle. But, you (supposedly) save $$ and hassles due to a factory warranty. If you're a cheap bastard like me and buy cars with over 100,000 miles on them, you get them for about 10% to 15% of the cost of the car when new, but you end up starting threads on forums bitching about the nightmare of the car and you'd better be able to diagnose and DIY at least some of the repairs. To me, the middle ground is even worse - buy a car just out of warranty (say 50,000 miles), and you are still paying 50% of cost of the car new, plus stuff is still going to break and wear out starting at about that time. Plus, the aftermarket hasn't had much time to develop cheaper replacement parts (e.g. - rebuilt air struts) and there aren't that many DIY articles to guide you through repairs. Plus, maybe you need to take out a loan to buy that car, so you've got car payments on top of repair bills.

Let's assume the price for a theoretical car is $80,000 new (so, sorry Kalash, but we're not talking Mitsus here). So, at 4 years and 50,000 miles, purchase price about $40,000. At the point where I buy them (8 or 9 years old and 100k+ miles), purchase price is $8,000 to $12,000. What are your thoughts? I'm interested in strategies you all may have. Is there any particular car maker who's products are better suited to ownership in the "DIY realm"?
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b3freak
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Re: Luxury Vehicle Purchase Timing - What's Best?

Post by b3freak » Thu Jun 14, 2018 11:17 am

kcattorney wrote:
Thu Jun 14, 2018 8:31 am
Somewhat related to my A8L saga, but really related to a broad range of vehicles - let's say "luxury" vehicles. If you've read my A8L thread, you know that I've nearly gotten it sorted out, definitely to the point where it is very driveable and I could sell it to a private party (with full disclosures) or run it through the dealer auction. It isn't an expensive car - it had ~150,000 miles on it when I bought it about 10 months ago and I paid ~$8,000 for it at the dealer auction. Decision on my plate is to love it or list it, which leads to this thread topic.

We are all well aware of the tremendous depreciation hit you take with a new vehicle, plus the sales tax, property tax and insurance costs of a new vehicle. But, you (supposedly) save $$ and hassles due to a factory warranty. If you're a cheap bastard like me and buy cars with over 100,000 miles on them, you get them for about 10% to 15% of the cost of the car when new, but you end up starting threads on forums bitching about the nightmare of the car and you'd better be able to diagnose and DIY at least some of the repairs. To me, the middle ground is even worse - buy a car just out of warranty (say 50,000 miles), and you are still paying 50% of cost of the car new, plus stuff is still going to break and wear out starting at about that time. Plus, the aftermarket hasn't had much time to develop cheaper replacement parts (e.g. - rebuilt air struts) and there aren't that many DIY articles to guide you through repairs. Plus, maybe you need to take out a loan to buy that car, so you've got car payments on top of repair bills.

Let's assume the price for a theoretical car is $80,000 new (so, sorry Kalash, but we're not talking Mitsus here). So, at 4 years and 50,000 miles, purchase price about $40,000. At the point where I buy them (8 or 9 years old and 100k+ miles), purchase price is $8,000 to $12,000. What are your thoughts? I'm interested in strategies you all may have. Is there any particular car maker who's products are better suited to ownership in the "DIY realm"?
Bought three modern *used* Volvos and no complaints whatsoever. The amenities are top notch and the seats will make your endorphins do a happy dance!
2002 Porsche 996 Carrera - bare bones basic, but still a blast to drive! Heck, I don't even have PSM on it. Ha!

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Kalashnikov
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Re: Luxury Vehicle Purchase Timing - What's Best?

Post by Kalashnikov » Thu Jun 14, 2018 11:26 am

KC, I've went through this phase in my college years and through 996 ownership.

With modern cars, this is no longer a viable ownership strategy. Period. They have gotten so complicated and non-diy friendly that any major repair means you have a lawn ornament.

The process of waiting for luxury car to depreciate worked on cars that were made pre early 2000s, because they were still relatively simple and reliable. You could fix them by yourself without buying loads of additional equipment and diagnostic tools.

On 2010+ luxury cars, this is no longer possible. The cars are so complicated and have so many electronic systems that even the factory technicians are now trained just to know ONE system. There is a guy who knows the transmission, one guy who knows engine, one guy who knows suspension. And most of the repairs on those systems are 100% cost prohibitive.

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Re: Luxury Vehicle Purchase Timing - What's Best?

Post by KoB » Thu Jun 14, 2018 11:33 am

Good post, KC, and great questions ... for which I don’t think I’ve got answers. I haven’t bought anything as far up the food chain as the A8L ... Mrs. KoB and I have generally stuck with Acuras and Infinitis, which I think of as “sort of” luxury brands. Both brands seem to have depreciation curves that drop quickly and then flatten out more than some of the German and American competitors. The sweet spots seem to be when they’re either a couple years old or when they’re in your 8-10 year range. I agree with your assessment that 50k miles and just out of warranty is no time to buy one of these.

I bought my current MDX when it was 16 months old and had 16,000 miles on it. I figured that I’d put 8,000 - 9,000 miles per year on it, so the warranty balances that mattered were probably going to be 32 months bumper-to-bumper and 56 months on the power train. I paid about $16,000 under the original sticker price, which seemed like an acceptable discount for letting someone else eat the initial depreciation. The Carfax showed regular dealer maintenance, so I wasn’t too concerned there; thus far (a couple months short of five years) it’s been trouble free. I expect to drive it for several more years, unless I get bored and do something stupid. Other than a timing belt, I really don’t anticipate pouring a lot of cash into it.

My wife’s Infiniti has been a similar story ... two years old and 22k miles when we bought it, Carfax showed dealer maintenance every 3k miles, going strong five years and 50k-odd miles later. The strength and weakness of both cars, I think, is a lot of parts overlap with other Honda and Nissan products. Parts aren’t absurdly expensive and there’s a lot available in the aftermarket. I sold an Infiniti M35x when I bought the Acura, and I wish I’d kept it ... it wasn’t quite the car that the A6 (or A8) is, but it was dead solid reliable, maintenance was no big deal, and I’m sure it’s still on the road someplace.
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Re: Luxury Vehicle Purchase Timing - What's Best?

Post by 32wildbilly » Thu Jun 14, 2018 11:44 am

Kalashnikov wrote:
Thu Jun 14, 2018 11:26 am

On 2010+ luxury cars, this is no longer possible. The cars are so complicated and have so many electronic systems that even the factory technicians are now trained just to know ONE system. There is a guy who knows the transmission, one guy who knows engine, one guy who knows suspension. And most of the repairs on those systems are 100% cost prohibitive.
Kalash has a valid point. The modern car is a technical nightmare. Especially the high ends with all the unnecessary bells and whistles. See around the corner headlights!!! Really? I was amazed that my old 2005 996 has the self leveling headlights! If I would keep my foot out of the loud pedal or the center pedal I would not need headlights that move up and down. Just because something can be made doesn't mean it is needed...but I'm old!

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Re: Luxury Vehicle Purchase Timing - What's Best?

Post by b3freak » Thu Jun 14, 2018 12:20 pm

Kalash does make a very good point about the modern vehicle experience. They are so reliant on proprietary computer management, digital this or that, crazy amounts of modules monitoring everything that I'm willing to bet you that in 50 years they won't be rolling on the stage a Barrett Jackson exclusive auctions. The modern service center is at best a team specialized computer technicians. The age of the dealership engine mechanic is over. How many times have you heard Porsche saying you need a replacement engine when the problem turned out to be repairable internal part? And, the domestic brands are just as bad. My mom bought a used fancy Cadillac and after a couple of years started having transmission problems, the dealership said she'd needed a replacement transmission at the tune of $5,000+. My father took it to AAMCO and they opened it up and repaired the part for $1,400. So called "luxury" can be seen on all brands. Even the average pickup truck looks like a luxury car these days. I remember when they didn't even have headliners in most trucks! And, the radio was just AM! ha!

Cheers!
2002 Porsche 996 Carrera - bare bones basic, but still a blast to drive! Heck, I don't even have PSM on it. Ha!

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