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Here are some real numbers, I think Mike Lynch is right
Posted by Ken D (more from Ken D) on Thu, 17 Nov 2005 18:17:44
In Reply to: Depreciation roughly equal 1st 3 yrs vs 2nd 3 yrs..., Mike Lynch
[Profile/Gallery]
, Wed, 16 Nov 2005 14:49:34
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I bought a 3 year old 9-3SE HO Convertible in 2002. I don't know the original price paid, but the original invoice was in glovebox listing MSRP at $44k, so lets suppose it was bought new for approx $39k. I paid $22k for it. Now its 3 years later and only worth about $9k. So the first 36 months of depreciation cost someone else $472 per month. The second 36 months of depreciation cost me about $361 per month.
I saved about $110 per month. However, I think I may have been able to lease a new 2002 for close to $361 per month, don't really remember the lease rates as I never seriously considered it. If so, I'd have been better off driving a new car.
Now let's look ahead 3 more years. I'd guess that when it is 9 years old its probably worth around $3k? If so, the next 36 month will only cost $166 per month, much less than a lease payment. Of course years 7-9 will have higher mechanical costs than a newer car. My combined depreciation over the 6 years will drop to $263 per month, but at the end of the ownership period I'll be driving a pretty old car - less status, no navigation gizmos, fewer safety freatures etc.
Moral of the story? Cars keep depreciating for quite a long time. If you aren't going to hold it very long term and drive it into the ground, it probably makes more sense to lease. Wish I had done this math 3 years ago, I'd be going out to lease a new car now instead of buying wax to try to make the 6 year old look better!
posted by 64.221.187...
Posts in this Thread:
- New car/used car debate, -993-, Tue, 15 Nov 2005 23:25:54
- Thanks for all the comments and.., -993-, Thu, 17 Nov 2005 20:11:55
- Just look at the depreciation curve..., STICKMAN, Thu, 17 Nov 2005 06:14:45
- Re: New car/used car debate - longish, johnf, Thu, 17 Nov 2005 00:39:46
- It's more about what you think you can afford...., Mike Lynch
, Wed, 16 Nov 2005 21:38:47 - Re: New car/used car debate, Ernesto
, Wed, 16 Nov 2005 18:14:10 - Wouldn't buy any car with >20,000 miles on it, NickR, Wed, 16 Nov 2005 13:49:06
- Good thread. It's not a simple answer.. (longish), Noel, Wed, 16 Nov 2005 12:08:48
- Don't you think that it's not all about money., J, Wed, 16 Nov 2005 11:41:21
- Re: New car/used car debate, mb25, Wed, 16 Nov 2005 11:30:51
- Re: New car/used car debate, kooch, Wed, 16 Nov 2005 10:23:02
- Re: New car/used car debate, PaulO, Wed, 16 Nov 2005 08:49:55
- Re: New car/used car debate, OKSaabs, Wed, 16 Nov 2005 08:42:26
- Need a spray can with "new car" smell..., LeoNL, Wed, 16 Nov 2005 08:18:42
- Figure the cost per mile to drive new or used car..., JBack, Wed, 16 Nov 2005 07:49:40
- It' really not that simple...., Herb Hirsch
, Wed, 16 Nov 2005 06:20:47 - Re: New car/used car debate, JimBlake
, Wed, 16 Nov 2005 06:16:19 - Not an econ major but..., NateinAA, Wed, 16 Nov 2005 05:00:17
- Re: New car/used car debate, SaabSpeed, Wed, 16 Nov 2005 03:15:40
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