Keeping up with the Jones', but having way more fun

Now this isn't that far off the mark of what many GRMers likely do in some form already, but the idea struck me about formally tracking costs of owning/DD'ing attainable "dream cars" vs. what the average moderately successful joe-blow 'Merican already spends.

Let's start with some assumptions:
Average new car transaction price in US: $33,500
Average new car monthly lease payment: $410/mo.
Average new car lease length: 36 months (allowing 12-15K miles/year)
Average used car transaction price in US: $18,800

Meet Mr. Jones. Mr. Jones is driving his new model car to his suburban home, he's paying $410/mo. to be in that current model, for a duration of 36 months. At the end of the cycle, he'll turn in that car, rinse, and repeat. His cost for that privilege? roughly $15,000.

So every year Mr. Jones spends roughly $5,000 for his automobile, and he doesn't have to worry about repairs as it's always under warranty.

So, I got thinking... if you had the wallet to comfortably live alongside Mr. Jones, and it would be "acceptable" for you to be in a $410/mo. lease mobile, but you wanted to live outside the box and drive a car that scratched a "car guy" itch, what would you buy... drive like a normal DD, and sell after a year or two or three, with a budgeted depreciation/maintenance expectation of ~$5K/year?

I'm not looking to go cheaper. That's easy. I'm saying what would give you more smiles per mile, at the same rough cost of what mr. non car guy is driving for a new appliance?

I have a laundry list of cars that I'd like to check off my bucket list. They're not all keepers, just cars I'd like the privilege of driving for a year, racking up a few miles, and then moving onto the next one. It seems feasible that I could do this while spending no more than what a whole bunch of people already spend who don't even care about cars.

ND and keep it for 80+ months. Although I'm sure that we need to consider the $410 going towards a vehicle that seats 4.

What are the requirements as far as how "practical" this car has to be? Does it need to be able to carry 4 adults and luggage to the airport? Or does it just need to carry two adults and modest luggage to the airport. There's no shortage of cars that fit the later bill. I'm on my second one that qualifies.

For around $20K:

BMW M Coupe
Honda S2000
Porsche Carrera (of some vintage)
BMW E30 M3
C5 Z06
FD RX7 (maintenance tho)
Would an STi, Evo, or RX8 hold their value sufficiently?
NSX (if you want to spend a bit more and have no luggage space)

This is why my m.o. is to purchase a modern classic sportscar that will not particularly depreciate (M Coupe, S2000) and then a $5000 minivan for the times when I need to haul more than 2 people.

$4,800 will get me this:

http://atlanta.craigslist.org/sat/cto/5401624055.html

And I'll spend the last $200 on brake pads and oil.

Beer Baron wrote: What are the requirements as far as how "practical" this car has to be?

I'd say that entirely depends on you and your needs/location.

Beer Baron wrote: Does it need to be able to carry 4 adults and luggage to the airport? Or does it just need to carry two adults and modest luggage to the airport. There's no shortage of cars that fit the later bill. I'm on my second one that qualifies. BMW M Coupe Honda S2000 Porsche Carrera (of some vintage) BMW E30 M3 C5 Z06 FD RX7 (maintenance tho) or an RX8 I bet you could get and STi or Evo? This is why my m.o. is to purchase a modern classic sportscar that will not particularly depreciate (M Coupe, S2000) and then a $5000 minivan for the times when I need to haul more than 2 people.

All great choices. The E30 might be pushing it for age on dependability, but i've looked at M Coupes, and c5 Z06's, or C6 Z51's as well. Find a low mileage garage queen, keep it nice but drive it, and sell it on the backside for a reasonable price.

slefain wrote: $4,800 will get me this: http://atlanta.craigslist.org/sat/cto/5401624055.html And I'll spend the last $200 on brake pads and oil.

True... but I'm not saying a $5K budget. I'm saying $5K per year in COST. meaning at the end of one year, you could light that C4 on fire and drive it off a cliff and head into the following year with a clean slate.

My guess is that C4 will be worth more than $0 one year from now.

Not sure how the buy-in price would affect things, but I'd like to think that I could keep an Aston Martin DB7 on the road for 5k per year.

xflowgolf wrote:

slefain wrote: $4,800 will get me this: http://atlanta.craigslist.org/sat/cto/5401624055.html And I'll spend the last $200 on brake pads and oil.

True... but I'm not saying a $5K budget. I'm saying $5K per year in COST. meaning at the end of one year, you could light that C4 on fire and drive it off a cliff and head into the following year with a clean slate. My guess is that C4 will be worth more than $0 one year from now.

Add several sets of Hoosiers at $1,392 / set to zero out the yearly budget.

Anyway, that said, are you accounting for time value of the money? Outlaying $50k on a car that only depreciates by $5K in the next year appears similar in cost, but really its costing you $2-5k in lost profits (on average), while 'average' guy has most of his car leveraged so that isn't an issue.

I'm considering exactly this as I cross-shop early Dodge Viper and a used GLA45 AMG. Cost is about the same, but the GLA45 has a double clutch my wife can drive, space in the back for a dog, better mileage, similar acceleration numbers to an early Viper, and a future depreciation curve that is, frankly, asinine.

The Viper has high maintenance costs, 11mpg city, and my wife can't drive it. I can carry my dog or my wife, but not both. My wife will likely be embarrassed to have it in front of the house. When I'm done with it, it'll be worth about what I paid, making it approximately a maintenance only proposition.

Fun fact: replacing my 2013 CR-Z hybrid with a Viper increases my insurance premiums by $25 per six months.

What's the limit on initial capital paid out? A 964 isn't likely to go down in value, and there are several other vehicles that I can think of that operating cost would be the only expense incurred.

xflowgolf wrote:

slefain wrote: $4,800 will get me this: http://atlanta.craigslist.org/sat/cto/5401624055.html And I'll spend the last $200 on brake pads and oil.

True... but I'm not saying a $5K budget. I'm saying $5K per year in COST. meaning at the end of one year, you could light that C4 on fire and drive it off a cliff and head into the following year with a clean slate. My guess is that C4 will be worth more than $0 one year from now.

I like your idea better.

So I drive it for a year and do ZERO maintenance, throw a huge New Year's Eve party, buy $199 worth of booze, and at the end of the night we do burnouts til the tires blow, then put a brick on the gas pedal til the engine blows, then pour $1 worth of gas on it and set it on fire.

January 1st, shop for another $4,800 Corvette. Rinse, repeat.

I did this experiment once until I realized that I cannot afford the Jones's car payments, so I stopped and bought a 27 year old car.

ProDarwin wrote: Anyway, that said, are you accounting for time value of the money? Outlaying $50k on a car that only depreciates by $5K in the next year appears similar in cost, but really its costing you $2-5k in lost profits (on average), while 'average' guy has most of his car leveraged so that isn't an issue.

I'm oversimplifying for theoretical purposes.

In looking at it in year by year numbers, you're unlikely to find a truly safe investment to yield more than 2-3% in that time frame (i.e. money market/FDIC CD/Treasury, etc.). Yes on average as a part of a greater portfolio you will see a higher average return, but that starts down the same track as just buying a cheap commuter to maximize the $#'s on an account screen.

But that's neither here nor there. If you can self fund the purchase, you can likely choose an asset backed loan to keep your money invested as well and offset that opportunity cost by a portion.

It gets way too grey when you wade too far out into the financial lounge. I just wanna go fast.

captdownshift wrote: What's the limit on initial capital paid out? A 964 isn't likely to go down in value, and there are several other vehicles that I can think of that operating cost would be the only expense incurred.

I'm not putting a limit on that. I'd say that's entirely up to you and what you're comfortable with the likelihood of recouping. As ProDarwin noted, as some point you have to look at the tipping point of opportunity cost of tying up substantial money... but the amount you want to tie up is up to you. I included the average transaction prices just to put a frame of reference that it would be very normal or average to drop $18-$30K on a used or new car, and that's what people do every day. You certainly could spend more, and still come out ahead, which is why I'm focusing in on the expected depreciation/loss as the more important variable.

slefain wrote: I like your idea better. So I drive it for a year and do ZERO maintenance, throw a huge New Year's Eve party, buy $199 worth of booze, and at the end of the night we do burnouts til the tires blow, then put a brick on the gas pedal til the engine blows, then pour $1 worth of gas on it and set it on fire. January 1st, shop for another $4,800 Corvette. Rinse, repeat.

Exactly! At the end of the year, mr. Jones doesn't have anything to show for his lease payments. You'd at least have one hell of a story to tell!

Find a free Phaeton and spend your 5K budget annually keeping it on the road?

See also most absurdly high end old German super sedans..... Fortunately, because German automakers tend to have evolutionary rather that revolutionary designs a 15 year old Mercedes doesn't look that old to the vast unwashed masses.

Ok, I vote $5000 miata.

$500-1000/year in maintenance

The remainder in mods to make it faster. After a few years you will have one hell of a rocket.

Eventually your tire & broken parts budget will drive the mod budget to zero.

tuna55 wrote: I did this experiment once until I realized that I cannot afford the Jones's car payments, so I stopped and bought a 27 year old car.

Similar to this. Although my current game plan is Sub 50k used Honda, payments under $250 a month, drive to 200k.

If I had the money, what is the state of AWD 996/997 depreciation, maintenance costs? No year round RWD DD. Wait, what is the selection of recent(2010 or newer), NON-German, AWD coupes?

In reply to Mike:

Viper is the first thing that popped in my head. That damn future classics thread had me trolling eBay for them last night.

z3m or z4m....

it depends on the car. I live in a neighborhood where most people spend that kind of money on cars. My Disco fits in perfectly as it looks nice and it a "timeless" design. I would think anything that ages well would fit that mold.

Porsche 911, Vette, Miata, and the like. you need something with a "following" as it becomes an instant classic and is therefor exempt from the rules of "old cars"

I've discovered that I really enjoy rehabbing cars. Taking them from neglected and sad back to fairly nice. Trucks, mini vans, small cars, whatever, I enjoy the process. The problem is you never get your money back out, at least I never do.
I'd save the first four months money and search for interesting $2k cars. Buy something. Use my money stream to get it back to nice while driving it, and then sell it. Rinse and repeat with the next car being more valuable because I hopefully sold it for more than I paid, even if I didn't recoup all of my money spent. This is kind of my plan for how to occupy myself in proper retirement.

mazdeuce wrote: I've discovered that I really enjoy rehabbing cars. Taking them from neglected and sad back to fairly nice. Trucks, mini vans, small cars, whatever, I enjoy the process. The problem is you never get your money back out, at least I never do. I'd save the first four months money and search for interesting $2k cars. Buy something. Use my money stream to get it back to nice while driving it, and then sell it. Rinse and repeat with the next car being more valuable because I hopefully sold it for more than I paid, even if I didn't recoup all of my money spent. This is kind of my plan for how to occupy myself in proper retirement.

I like that train of thought.

I find cheapskates and rebuilders often end up too focused on the whole breakeven aspect of it, or trying to make money at it. I know I do this.

This re-positions the thought process a bit into allowing yourself to enjoy the process, enjoy the car, actually use it a bit, and then sell it. Assuming you lose less than $5K/year on each car (which you're likely not ending up that far upside down), you're actually "ahead" of average Mr. Jones $400/mo. lease guy.

Furious_E wrote: In reply to Mike: Viper is the first thing that popped in my head. That damn future classics thread had me trolling eBay for them last night.

Likewise. There is a car on eBay right now that is supposedly Hennesy Venom #001 for $29k. It's rougher than most, but a lot of that simply looks like a failure to properly detail the car. I also imagine it has been beat on pretty badly. I wanted an ABS and aircon car, but that one is tempting, pending PPI. Spend a weekend on maintenance and detail, buy some trim parts like the missing glovebox door, and enjoy it for a couple years. Sell it along as a notable Viper for about the same or a little more cash.

tuna55 wrote: I did this experiment once until I realized that I cannot afford the Jones's car payments, so I stopped and bought a 27 year old car.

Fun Fact: The Jones' can't afford their car payment, either.

Let the Jones worry about keeping up. They can afford it... it's cheaper than a Fiesta.