I’ve been on a bit of an obsessive craze with BMWs lately, mostly because I’m excited about it and it’s been taking up a lot of my mental activity as a result. Once I decided on getting it, it was just a matter of which one. And there’s been so many choices! The budget I’m working to allows me so much to choose from, I’ve become like a fat kid in a candy shop.
I’ve been doing lots of reading along the way about luxury cars and luxury used cars, and I’ve seen that there’s a belief among many people that when they see someone driving a BMW (or an Audi or Mercedes), it’s immediately assumed that they’re rich because it’s a luxury car, despite how much it actually might cost.
As an example, for $10,000 I could buy a brand new 2015 Mitsubishi Mirage:
Or I could spend that $10,000 on a 10 year old BMW 320i:
I can guarantee you that the 10 year old BMW would still be a much better car than the brand new Mitsubishi, but it would also strangely carry the perception that you’re rich for owning it. Even though the brand new Mitsubishi in this case is the same price as a used BMW, no one would think that the Mitsubishi owner is rich.
Many people just automatically assume that a BMW (or any luxury brand like Mercedes, Jaguar, Audi, etc) is going to be too expensive to buy, and too expensive to maintain, and therefore only within the realms of ‘rich people’. But it’s not true.
You can buy used BMWs for a fraction of their price when new (the $10,000 BMW above was worth over $50,000 when new in 2005), and you can get them serviced at independent specialists for a fraction of the price that a BMW service centre would charge, and for mechanical parts you could buy them online yourself and save money, and if you don’t want to or can’t do the work yourself, you can get your independent specialist to do the work for you at a fraction of the price that BMW would charge you.
The cost of ownership of a used luxury car doesn’t need to be much more than equivalent standard cars. I’ve been there, I know what I’m talking about.
Back in 2001 when I was living in New Zealand I bought a 1992 BMW and ended up having it for about 6 years before I sold it and came back to Australia. During that 6 years, for a car that was 9-15 years old, servicing was ordinary and the only parts I had to replace was a starter motor and an air conditioning component. Both of them cost me no more than a couple hundred dollars. Not bad. And I had people thinking I was rich too. Here’s a picture of it:
It was a very nice car for when I bought it 15 years ago, even though it was 9 years old at the time. And that’s the good thing about luxury cars, they hold their appearance over time, as well as the perception of value.
Taking it a step up, for the same value as my 4 year old Toyota 4WD, I can buy a 5 or 6 year old BMW today and people would see me driving it around and automatically think I must be rich. They couldn’t possibly afford the same thing themselves, they think, because they’re ‘not rich’.
I’m selling my 4 year old Toyota for about $34,000 (or nearest offer), and with a few extra thousand added on from savings I’m looking at a budget of up to $40,000 for a luxury car replacement for the Toyota.
My requirements for a car include decent performance, so I’m looking at 225kw (300 HP) or more. I absolutely can’t get a new car with that power within my budget, so I have to look at a used car. I could get a 1 year old Ford XR6 Turbo, (270kw, 0-100kmh in 5.7 seconds) that’s depreciated into my budget range but it looks boring and I’ve had the XR6 Turbo before:
Or I can get a 5 year old BMW 535i (225kw, 0-100kmh in 6.1 seconds) for the same price:
What do YOU think is the better choice?
For me, the choice is pretty simple.
When you look at the interior of the above Ford versus the interior of the above BMW, and you understand that they’re the same price, why would you not choose the BMW?
The biggest reason people don’t buy the BMW (or any luxury car) is because they fear the servicing and maintenance costs, but as I’ve already explained above, those costs are minimised if you do it right instead of through the brand name service service centre.
I read a story online about a guy who was looking for a used luxury car. He found a used Mercedes Benz that he figured was worth about US$30,000 but the engine wouldn’t start so the owner was selling it for $3,000 because he was afraid it would cost him far too much to repair. So the buyer bought it for $3,000, investigated and found that there was an electric switch that had failed and prevented the car from starting. He replaced it for $200 and the car was working fine again. He bought himself a $30,000 used luxury car for $3,000 because of the fear the owner had about repairs. This is the kind of thing that someone with understanding and awareness can take advantage of – not just with buying cars, but with understanding it doesn’t have to cost an arm and a leg and your newborn child to get them repaired.
Based on what I’ve learned this year about the cost and quality of used luxury cars compared to new standard cars, I don’t think I’ll ever go back to a standard car again. There’s just too much of benefit in a used luxury car.
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