The Dilemma:
For whatever reason, lately, I've been getting the urge to get another M car, I miss my M3, it was a great car. The R8 is better than the M3 in every conceivable way (except for person and grocery hauling) but it isn't 3 times as good as the entry cost would suggest. Owning the R8 has actually deepened my respect for BMW and what they can do with a car.
The Cars:
I love the styling of the new M3 and M5, and with a child on the way, they'd make for a perfect family car. If I was to pull the trigger, I'd be getting something a few years used. Used M5s are already near the 50k mark (100k new) while M3s are holding their value strong around 60. I don't want to spend more than 50k on this car, but I can forsee the M3s dropping sharply soon.
The (possible) Solution:
This winter the R8 and my wife's Acura should be paid off, this is going to free up a lot of cash flow. While it wouldn't be a problem getting an M car, I still don't want to be stupid with my money, so here's what I've been thinking in my head. I could sell the WRX, get an M, and then share it with my wife. She works 3 days a week, and works much closer to home than I do. My commute is 75 miles round trip, and I do not want to put 20k+ miles on this car. By switching between the Acura and M, I could see us putting 15k miles per year on the car. This means the garage (and driveway) would consist of an R8, Acura ILX and M3(5).
The Math:
The goal is not to touch any money saved by paying off the R8, that money will be allocated to something else. I'd like to pay for this M car strictly by paying off the Acura and selling the WRX, let's see if it works.
From A Monthly Bill Perspective:
The combined monthly payment of the WRX and Acura is about $900 per month, selling the WRX and paying off the Acura eliminates this $900 bill right off the bat. Let's say I finance $45,00 for this car at 1.9%, that leaves me with a $786 payment for the M car. Let's say $30 more per month for insurance (WRX isn't cheap to insure because dip shit kids) and $40 more per gas we are still $44 under what I'm paying, today. Sounds like a win to me! (I'm purposely leaving out repair and maintenance costs to make this work)
From A Depreciation Perspective:
Everybody that has known me long enough knows that I base my auto purchases on depreciation, not monthly payments. A perfect example is the 488 Ferrari, I've heard stories lately of people buying them for 300k, putting 3k miles on them and then selling for 350k. Buy the right car at the right time, and it will be cheap to own.
Now obviously these are all estimates, but I'm basing this information off how these models have done in the past. Let's say I keep the car for 4 years, that would mean:
5 year old WRX with 100k miles: 11k or 2200 annually
Used M3 with 4 years of ownership, 90k miles: 12k over 4 years or 3k annually.
What this means, to me, is that per month, the M3 would cost ~70 more per month in depreciation to own. Add gas and insurance and we're at $140 per month.
Conclusion
So in essence, I can "trade in" a WRX for an M3 for $140 more per month, seems like a no brainer?
What does TCG think? I'm afraid I may be persuading myself incorrectly.
For whatever reason, lately, I've been getting the urge to get another M car, I miss my M3, it was a great car. The R8 is better than the M3 in every conceivable way (except for person and grocery hauling) but it isn't 3 times as good as the entry cost would suggest. Owning the R8 has actually deepened my respect for BMW and what they can do with a car.
The Cars:
I love the styling of the new M3 and M5, and with a child on the way, they'd make for a perfect family car. If I was to pull the trigger, I'd be getting something a few years used. Used M5s are already near the 50k mark (100k new) while M3s are holding their value strong around 60. I don't want to spend more than 50k on this car, but I can forsee the M3s dropping sharply soon.
The (possible) Solution:
This winter the R8 and my wife's Acura should be paid off, this is going to free up a lot of cash flow. While it wouldn't be a problem getting an M car, I still don't want to be stupid with my money, so here's what I've been thinking in my head. I could sell the WRX, get an M, and then share it with my wife. She works 3 days a week, and works much closer to home than I do. My commute is 75 miles round trip, and I do not want to put 20k+ miles on this car. By switching between the Acura and M, I could see us putting 15k miles per year on the car. This means the garage (and driveway) would consist of an R8, Acura ILX and M3(5).
The Math:
The goal is not to touch any money saved by paying off the R8, that money will be allocated to something else. I'd like to pay for this M car strictly by paying off the Acura and selling the WRX, let's see if it works.
From A Monthly Bill Perspective:
The combined monthly payment of the WRX and Acura is about $900 per month, selling the WRX and paying off the Acura eliminates this $900 bill right off the bat. Let's say I finance $45,00 for this car at 1.9%, that leaves me with a $786 payment for the M car. Let's say $30 more per month for insurance (WRX isn't cheap to insure because dip shit kids) and $40 more per gas we are still $44 under what I'm paying, today. Sounds like a win to me! (I'm purposely leaving out repair and maintenance costs to make this work)
From A Depreciation Perspective:
Everybody that has known me long enough knows that I base my auto purchases on depreciation, not monthly payments. A perfect example is the 488 Ferrari, I've heard stories lately of people buying them for 300k, putting 3k miles on them and then selling for 350k. Buy the right car at the right time, and it will be cheap to own.
Now obviously these are all estimates, but I'm basing this information off how these models have done in the past. Let's say I keep the car for 4 years, that would mean:
5 year old WRX with 100k miles: 11k or 2200 annually
Used M3 with 4 years of ownership, 90k miles: 12k over 4 years or 3k annually.
What this means, to me, is that per month, the M3 would cost ~70 more per month in depreciation to own. Add gas and insurance and we're at $140 per month.
Conclusion
So in essence, I can "trade in" a WRX for an M3 for $140 more per month, seems like a no brainer?
What does TCG think? I'm afraid I may be persuading myself incorrectly.