Back me up here guys!!!!

[Mark021]

My latest argument (sorry discussion) with my wife is the pure financial logic of acquiring a G50 911 in solid mechanical condition over one of the newer, highly electronic cars being put out today.

Lets say I know a guy who can go to manheim and pick me up a really nice 2 to 3 year old car, like a BMW 530i or an Infinity M, Audi A6, ect. They are a much better deal then they were just a few months ago and can be picked up for anywhere from $19K to about $23K and pay the guy $1K for the transaction.

Now I have a really nice car, possibly even one that is pretty fun to drive. Did I forget to mention that "she" could also drive it (and actually like doing so).

A breif mention on registering it and assigning it a value and insuring it, things where it could be that an older, percieved weekend car could be recognized as a lesser asset for those purposes and by extension the levies applied. Now fast forward say three years.... what do I have in both cases?

I'm arguing that the Porsche (if well taken care of with about 6K to 7K a year in a relatively moderate use pattern, my typical usage on any car these days) will still be worth relatively close to what I paid for it and if I was lucky with shape of the car before I purchased, maybe the only maintenence costs incurred were a valve adjustment, brake pads, a few oil changes (ok probably tires), but to some extent I could/would have similar costs associated with any of the other above mentioned cars, not to mention the expectation that the other cars have probably lost close to 50% of their market value.

Now we're three years later and I'm sitting on a bench in the driveway on a beautiful spring day and I look in the drive and what do I have in the two scenarios?

The porsche may require a "hair" more cash flow but taking into account the asset value at the end of this time the two scenario's cashed out, I may actually be a bit ahead with the Porsche... right!!!!

I know the biggeest unknown in this highly scientific analysis is the "what if's" but aren't those true in both scenarios. I know the BMW can be very expensive to maintain and is not really known to be Japanese in relaibility, nor is the Audi, these are apperantly great cars to lease but not own after the lease is up. The Infinity may have the reputaion for the best relaibility but it could come up with unanticipated $1500 tweaks just as easily with all the electronics on these things these days and my appreciation is it will be worth $10K in three years if I'm lucky.

And so... it would appear that the only sensible and logical thing to do would be to acquire a really good example of a G50 Coupe that has been well sorted out and three years from now I will be in a position to truly look at the car in the drive and realize the wisdom of my choice while my wife smiles at me filled with love and admiration for my astute business sense.

[RacerX1166]

Apples and oranges IMO, since you're talking about a 530. That's the daily driver and will certainly subject to significant depreciation compared to a G50 that's driven judiciously.

[Macroni]

While I agree the probability of your Pcar holding a higher % of its value is a safe bet; they are slippery slopes. 530 wash and drive....Pcar...wash, drive & upgrade!

[vesnyder]

The expenses are not limited only to the upgrades, but you are talking a 20 yr old car here. Assuming you have medium wrenching skills and are not afraid to do basic things like tear a door panel off, replace a clutch cable or repair simple oil leaks - I agree with your logic. But if you need to bring it into a shop everytime something gooes wrong - and it will on a 20 year old car - your financial model is shot to hell.

[Mark021]

that's what I love about this place... solid feedback.

thanks for keeping it real Vance.

[nixtfy]

If the Porsche was your second car it would be no problem wrench on it as time allows. The G50 as a your only car and daily form of transportation can make everything a little more complicated and the cost to maintain it will certainly be more if you have it at a shop.

[racer]

If the wife is happy, then you are allowed to be happy... that's all I'm saying.

[geshaghi]

While I agree that the Porsche will tend to hold its' value better over the 3 years, if you're buying a late model car at a dealer auction, you should in essence be getting the car $3,000 - $5,000 below current retail, so the drop in value shouldn't be that severe. Maintenance on the Porsche is the gamble here. Ultimately, buying a Porsche usually isn't a rational decision, although we seem to come up with plenty of ways to "rationalize" it.

[Mark021]

Like the classic line from the classic movie; "which in more important, sex or rationalization, why sex of course, oh really, have you ever gone a day without rationalizing something.

If I were being rational I wouldn't even be on this site

But thank you for the gentle reminder.

Better go get the corrolla now and drop my balls off at the wifes office on the way to the dealership.....

[the]

The Manheim prices aren't great, and for Manheim +$1000 you could meet that by looking in the paper.

Manheim prices in California are pretty high. There are a lot of eastern Europeans, Russians and others buying cars and sending them overseas for 20-30% profits. They bid high, esp. on the BMWs.

Most of the new car dealerships are also now buying a ton more cars at auction. Those dealerships have dead new car sales, and are making their money on used. They have also driven up the prices, often to above independent lot retail.

[the]

So, I guess my point is the G50 Carrera will be the much better value over the next 5 years.

It might be different if the Manheim 2-3 year old BMW could be had for 1/2 retail price, but that's just not the case, you'll be paying "low retail" for it. One that new will still have pretty significant depreciation (an '06 530i, for example, is going to cost you $26K or more, and it won't be long at all before it is a $15K car, then a $9K car, and ultimately a $3K car).

A nice, well sorted, solid G50, bought well, isn't going to have much depreciation over the next 10 years (they are pretty close to fully depreciated) and isn't going to cost more than an '06 BMW to run over the next 10 years. Probably a lot less, esp. if you can do any work on cars. A G50 Carrera can be worked on. A few electrical problems on a 5 year old, out of warranty BMW can be a nightmare.

[Mark021]

question for "the" on the Manheim thing.

I've been tracking from a contact that has access and her stats show the 2006 530I going down in price to around $21k to $22k for an avg to above avg shape car with around 30K+ miles on it.

I appreciate what you are saying about the arbitage guys sending cars to Europe but I was under an impression that things had slowed down significantly worldwide and their economies are as up in arms as ours. As for local car sales, I was told that used was down as well and I knew that new was essentially frozen, but I didn't know if BMW was agressively financing (qualifying) and the lack of other forms of financing had made it less available as well creating a glut of both new and used off-lease cars and that the auctions were overflowing with off-lease BMW's.

My appreciations are just lay ones so they may be simplistic, but the Manheim stats the girl pulled for me showed a pretty steep downward trend in recent months with a lot of off-lease cars hitting the market and the residuals were above the market values so people were not opting to purchase and BMW's game plan of leasing everything was creating a backlog of cars given current market conditions... not true?