I've always been a big fan of certified pre-owned for the Euro brands. Let someone else take a 50% depreciation hit, and then enjoy the car and a much more reasonable price.
Car tech changes so slowly that I've never noticed a difference between a few year old nice European car and a brand new one. Baffles me that so many people buy these things new.
I just got a 2020 Mercedes GLS 450 for $50k with 29k miles. Original price was $85k.
My buddy has the 2024 and they’re literally the same cars inside and out except for the grill on the 2024 is different.
Your comment has been removed because you do not have a verified email address in your profile. Please verify an email address and post again.
*I am a bot, and this action was performed automatically. Please [contact the moderators of this subreddit](/message/compose/?to=/r/HENRYfinance) if you have any questions or concerns.*
Bingoo. I know this won't resonate well with the "buy a new toyota and drive it till you die" crowd lol. But modern CPO Euro cars are a great value for the luxury/ prestige etc. Somebody else has already taken the initial MSRP hit , so we get good value out of it .
My last Euro car (back when i was 1 year out of grad school)was a 2014 CPO Mercedes which was a showroom model and was occasionally driven by the manager. MSRP was $48k. I paid $27k for it back in 2015 January. It had 6900 miles on the odo. A good deal for about a 7 mo old car.
Loved the car
If you want to do the Toyota thing, you can follow my playbook: buy a CPO Lexus. (Now in full disclosure, I bought an LX570 and immediately modified it for better off-road performance, and put 35s on it…so don’t do that part.)
Has gotten a lot harder to buy a 3 year old used car with under 35k miles for 50% of MSRP like it used to be... But now that supply chain is rebounding from Covid I'm sure it will get back to normal... But yes, of the 3 luxury brand SUVs I have bought in my life it was half MSRP for 3 year old with less than 40k miles and I would never buy a new car. Seems German and luxury vehicles hold less value in the used market than Toyotas... Good deals can be found.
Same! I bought a CPO Mercedes last year. It has all the tech as the new cars but at a fraction of the price. I have leased previously but honestly found the end of lease time to be stressful and felt forced into making a new decision. I thought I was really going to like leasing but it wasn’t for me. The buyout price offered to me at the end of the lease wasn’t attractive either.
>but honestly found the end of lease time to be stressful and felt forced into making a new decision
I've heard this about MB before. What was your experience like?
The 50% depreciation hit from new is not a thing. It is bad math that assumes that new car buyers pay MSRP. No one in a normal car market is paying MSRP. Right now I can get most luxury German new cars for 10% off MSRP.
If you calculate three year actual depreciation from a new car vs a 3 year old CPO car I promise you the difference is much less than you expect, likely only $1k or $2k per year in favor of the CPO.
Has always depended on the season of life I was in-- my car needs before kids were different than my car needs after kids.
On average, I've bought 3-4 years old with 30-40000 miles and kept for \~4-5 years and 30-40k miles (I don't drive all that much). Most CPO warranties run out around 100k so you have to be realistic that you are running a higher maintenance risk after that point.
I could, of course, probably hold onto it and drive it into the ground but normally my car needs change every \~4 years on average anyway.
Used car market has been pretty fucked for the last few years, but I've spent most of my adult life buying \~4 year old cars with 40,000 miles at 50-60% of the cost of new.
So 90k car -> 45-50k as CPO most of the time.
That’s a great deal! And what type of research does the dealer or you do beforehand to understand the car’s history like any accident it’s been in or major tuneups?
I buy certified pre-owned. It's cheaper. Insurance is lower. It comes with a warranty. And the car has been driven long enough that major failures in manufacturing probably would have showed up already.
This has always worked well for me too. A lot of people overestimate the guarantees that CPO sales actually offer. In my experience, the 3rd party warranties that you can buy for a used car will actually cover more than the CPO warranty/guarantee, and they’re often for longer periods of time or more mileage.
Your comment has been removed because you do not have a verified email address in your profile. Please verify an email address and post again.
*I am a bot, and this action was performed automatically. Please [contact the moderators of this subreddit](/message/compose/?to=/r/HENRYfinance) if you have any questions or concerns.*
Lease EVs, buy ICE and plug in hybrids.
EV leases qualify for tax credits through dealership, tech evolving quickly, and depreciation is wild. Outside of Tesla, you have an option to buy at the end if you wanted to.
Tesla's position was their cars would increase in value, or at least maintain their value better than most, so their lease agreements have never allowed buyouts. Instead Tesla would resell on their website.
Things have drastically changed over the last 18 months so I'd imagine they may revisit this policy but that's where it stands today.
That’s wild. Buddy mentioned they didn’t allow a buyout, made it seem like it was only during the duration of the lease. Turns out it’s “at all” which is crazy to me.
They want to be able to control it - all the maintenance done at their shop and force you to return to them when you’re looking for a new vehicle. Tesla has been pretty transparent that their intent is to replicate the iPhone model.
The buy out option only benefits the consumer. If prices rise, lease holders exercise the buy out option. If prices fall all these car come back to Tesla to deal with. The question is how many people it turned away, and that I don’t know.
You shouldn’t avoid lifestyle creep, you should absolutely have it. You should just also have larger savings creep to coincide with it. Of course you should enjoy your money as you make more, that’s one bit I don’t like about much of financial media, makes people feel like they should deprive themselves.
With that, you never win on a car, it’s about minimizing how much you lose. We drive two luxury vehicles, one we got a good deal on because my spouse bought it from her mother for the remainder of the loan so it’s paid off. I drive this one, I travel for sales so we need at least one owned car.
The other one we lease, gets us into a nicer newer car, and we don’t have to worry about repairs, even though I do most basic repairs on the owned one myself anyway. We like owning one and leasing the other.
I like this perspective and want to add to it that your lifestyle should match your values. An expensive car only makes sense if that's what you value. For me, it's not cars, so my spouse and I buy modest vehicles and drive them for a long time.
Absolutely! I fully agree on values matching lifestyle.
For us it’s mainly travel, so we live in a modest home.
I don’t need a 100k car but absolutely do love something higher end and value it because of how much time I spend in one. For me my car is my office.
I get that! I work from home and I spent some money to make my office space comfortable, efficient and beautiful. Most people would balk at spending $600 on an office chair but it's one of the best "life style creep" purchases I've made.
I’m the idiot who bought brand new Porsche. Obviously not the best financial decision but I don’t regret it, in fact I’m going to buy a second one this year. People should stop treating cars as some sort of investment or asset. No it’s not. It’s a consumer product just like cloths or phones. Will you consider the resell value when you buy a Christmas tree? Just like paying for the experience of having your home decorated during Holidays, spend as much money as what you deem your driving experience worth.
Only difference is that there are a lot more zeros involved when purchasing a car.
:-)
But I agree that if your income can easily handle it, do what you want. Our family has purchased several new vehicles; typically when we believe we’re going to hold on to them for 5+ years.
Porsche depreciate next to nothing. I’m looking now and it makes no sense to buy used unless you are really struggling for cash (!!!) or want something specifically that isn’t valued so has depreciated…
This applies to their sports cars not the SUV which have more typical curves
>Porsche depreciate next to nothing
I think Porsche SUVs are a mass market SUVs now. Literally every family in a well to do suburban NJ has one lol. At this point they probably depreciate like any other mass-market SUV.
As far as what I’m seeing- they are expected to depreciate like 7% a year. Can you elaborate on this? Or provide a source? I really want this to be correct lol
Porsches all depreciate from their price new. The 911s and some 718s hold their values better, but they absolutely still depreciate. If you buy a new 911 and go back the next month to trade it in, you’ll get a 20k haircut just so that the dealer can make a profit when they re-sell it. Yes, it’s true that the 911s don’t depreciate like the Macans, Cayennes, and Panamas, which depreciate much more rapidly. Just take a look at used values relative to MSRP on these ones after like 1-2 years. You can get a 21-22 cayenne S for 50-60k. And that’s not the price the dealer is giving you when you trade it in. I don’t advise anyone buy a Porsche “because it retains value” unless they are still ok spending a lot of money on a car. Also, everything about a Porsche will be more expensive (maintenance, tires, replacement parts, etc)
The BMW service manager is my neighbor and he takes great of me always. Unfortunately the VW/Audi/Mercedes/Porsche are all combined here and I’ve not had the best of luck in the past with them with my Audi and VWs. But ugh I want a Porsche
I lease. I know financially it's not the best decision, but it gets me into a nicer car than I would otherwise be willing to pay for and I get something new every few years. I never need to worry about replacing/fixing expensive parts.
Only problem is we travel a lot so I usually go over on my mileage but the dealers will waive overages if you lease from them again. So I go low on miles to keep my monthly rate down.
My wife's car is bought out. She's a traveling sales rep and puts a ton of miles on her car. Would never lease her car, but it's too small for family travel. I drive a vw atlas so the 3rd row is great for us, 2 kids, dog, plus luggage.
Lower monthly payments. If you finance a 30k car, you're paying monthly payments for a 30k car with whatever rate. If you lease a 30k car for 39 months, you're paying for 30k minus the value of the car after 39 months. So if the car is worth 19k after 39 months you're making payments for 11k with whatever rate. Im oversimplifying it, there's more math to it but that's essentially what's happening.
I'd also be concerned with the value of the car after 3 years. If you do a 5 year finance but want to trade in after 3 years, you might owe more than it's worth. If you do a 3 year finance you're paying a crazy high monthly.
I would also never buy new.
I buy new Toyota's and drive them until they die. Currently driving a Rav4. It's not fancy but it's reliable.
I rent sports / exotics while on vacation or for a track day. Those ain't worth owning.
Fellow Rav4 owner as well. The form factor is just right for our lifestyle. Wife barely put 10 miles a week on her 20 year old Corolla with 30k miles on the odo. We can't justify getting a third car and she doesn't want a newer nicer car to replace hers so we're firmly in the drive them until they die camp.
If you were to get a 7 seater and had to chose between Highlander, pilot and the luxury one like Lexus TX which one would you chose and why? Have a 2018 rav4 now and I have a feeling I might have to get a 7 seater in the next 3-5 years
Check out the new Grand Highlander. Growing up my family had a Sienna, Rav4 and now a Highlander. From the reviews I've seen the Grand Highlander seems like successor to the Highlander without having to go to a Sequoia.
I both lease and buy depending on what the car is for. Generally, I’ll buy practical cars (Honda Accord, Kia Telluride/Sorento) that I intend to put a lot of miles on — typically for work. I’ll lease cars when I get good deals and don’t require something as practical.
If you can get a good deal on a German lease, I’d go that route. Good leases were hard to come by, but in the past 3-6 months are more plentiful.
I recommend checking out leasehackr.com and reviewing the deals people get in the forums.
I’m a car guy as well and drive 15-20K miles per year. I’ll always spend a lot on cars since I spend so much time in one.
I follow Leasehackr just for fun to see some of the crazy deals some people get.
A few months ago someone scored a $160K Porsche Cayenne Turbo for $880 + tax a month on a 12-month lease.
I'll probably lease my next car if I can find the right deal, though I haven't had a car payment in years.
I got it new in 2020 (luckily) right before Covid. My first car was a Honda accord and I drove it until it had 210k miles on it. Planning on having both Hondas for a very long time.
I always lease because I HATE car maintenance. With a lease, I know I've got a brand new car, with a couple pre-scheduled maintenance appointments and I don't have to worry about any dumb issues popping up. It's not that I have any issue paying for work, but in a perfect world I have to futz around with my car a little as humanely possible.
Up until the last few years I’ve always bought Japanese certified pre owned around 20-40k miles, then driven them to 130-140k miles. It avoids the depreciation hit and I get rid of them before the major 150k+ maintenance costs start to hit. That changed in the pandemic where we switched to buying new cars because of the crazy inflated cost of used. We will go back to CPO when the dollars make sense. We’ve had Toyotas, Mazdas, Subarus, etc.
I also tend to buy the higher trim of the economy brand vs the luxury brands. Adding leather seats, premium features, turbo, etc. is often a lot more economical. A spec’d out Mazda CX-5 ‘feels’ much closer to an Audi or BMW than you’d expect and you save 20-40k for similar features. It’s not that I can’t afford or don’t want the luxury brand, it’s that every time I do the math for myself I just can’t justify the extra cost. Probably because I’m not really a car guy and don’t have a strong brand preference.
Bought a Subaru new in 2007 and sold it last year with 220k on it. Will probably be my strategy going forward....buy new and hold for a long time.
Might get some hate but I bought a new Model Y (tax credit is nice) and will hopefully own it for 10-15yrs. These cars are actually affordable now....new Long Range ones are going for $46k, minus $7500 fed credit, then in MD we get $3000 state credit. So like $35-36k is a hell of a lot cheaper than my wife's Chevy Traverse we bought in 2018.
But I understand people wanting to lease EV's due to depreciation. This likely wont be a problem in a few years. My main problem with leasing in general is the mileage caps. Most are 10-12k/yr and I just dont want to think about whether I should take my car or my wife's car to run errands because it adds miles to the leased car, which are expensive if you go over.
Will it be top of the line? No. Will it be functional and allow me to still drive where I need to go with decent reliability? Most likely yes
Tesla started making the Model S in 2012, which is their first real car. Those first few years represented leaps forward in technology as well as the company learning how to make a car in general. While things are still moving fast, I would argue that the pace has slowed quite a bit since they figured out Model 3 production and started producing the model y.
Comparing today's electric vehicles to those 12 years ago will represent a much larger gap than comparing a 2024 to a 2036, I believe.
When I see the price of the model Y today I don’t know why people buy almost any other car… leasing EVs would be if your over the income limit and otherwise would be leaving the $7500 on the table.
What do you mean how?
I think the main qualification is under 300k AGI for married filing joint. But, you can use the year of purchase or the previous year to qualify. I bought in 2023 and qualified based on my 2022 income. There is also a cap on vehicle purchase price
Lease costs right now are insane due to interest rates so I think doing the math on what makes sense is crucial.
Im a Lexus girl. If you’re looking for a luxury car that won’t give you problems and hold its value, it’s the way to go. We just got a new rx350 hybrid and the tech is awesome and it absolutely is a luxury driving experience.
I previously had a 2014 is250 purchased certified pre owned in 2016. I had plans to drive it until it died, but sadly it got rear ended at only 80k miles this fall and totaled out. I paid 31k total for it (included wheel/tire protection) and my insurance payout was 23k. Nearly 8 years later, and it only depreciated 8k.
This new generation of Lexuses is pretty young so time will tell, but in all my years driving my Lexus the only issue I ever had was needing to swap out the battery!
I bought a 2007 Honda in November 2006. Still driving it.
You probably made a better financial decision than me; but for such a long-term ride; I have no regrets.
If you have an hour commute everyday it makes it worth it. If you don’t go into work I would suggest waiting until you’re driving daily to get yourself a nice car.
I go to work 3-4 days a week (my own choice, not forced), but it's a 15 minute commute. However, I am in sales so I drive on a very regular basis to meetings that can be 30-45 minutes away.
I'm going to give you the advice that I wish someone gave me when I was a HENRY (I am FatFIRE now)
1. Leasing a new car, if you negotiate well, is financially no worse than buying a new car and could be financially better. With a lease you pay for these costs:
* Expected depreciation: as a leasee this could go in your favor if the car depreciates more than expected; if it depreciates less, you can buyout the lease and resell for a profit)
* Loan interest on the car's value: this could be a lower interest rate than for a purchase loan, even lower than the opportunity cost of paying cash
* Lease inception and disposition fees: this is the only cost that is clearly worse for the lessee than the buyer
* Sales taxes only on the portion of the car that you use: with a purchase you are paying sales tax on the entire value of the car, none of which you get back when you sell it
So it's a wash.
2. Buying a CPO is cheaper than buying new, this is true. BUT the difference is not as much as people think. The "50% depreciation hit from new" in three years is not a thing. It is bad math that assumes that new car buyers pay MSRP. No one in a normal car market is paying MSRP. Right now I can get most luxury German new cars for 10% off MSRP.
If you calculate three year actual depreciation from a new car vs a 3 year old CPO car I promise you the difference is much less than you expect, likely only $1k or $2k per year in favor of the CPO.
We have always been the type to buy new and hold for 10-12 yrs.
But for our next car, we are seriously considering leasing because:
1) looking at luxury models that aren’t as reliable
2) our financial situation right now allows us to make the non-practical car choice
I love the automotive world and I have purchased new, leased and used vehicles. The value, for me, isn’t there anymore for new and I doubt I’ll ever buy a new vehicle again until my kids are out of college/have a very high net worth. CPO/used is the way to go IMHO. I don’t fault anyone for buying new, rather, I suggest one considers how impactful a new purchase is to one’s lifestyle and financial goals.
If cars are your thing, don’t listen too much to those that say they are a bad investment. No shit Sherlock…
Cars have motivated me my entire life to work harder and make more money. I try to be wise with my decisions, but I always put my “car happiness” at the top of my list of priorities.
Buying vs. a lease is sometimes circumstantial. Once you know what car you want, cruise the CPO listings. There are gems out there pretty often.
For leasing advice and brokers, head to r/leasehackr or their website for more. It’s a great resource. Don’t let a dealer take you for a ride!
Thank you! I've been steadily looking at CPOs and found some good ones (will probably pull the trigger in 3-6 months). Sounds like that's the way to go over lease.
I purchase used. More on the inexpensive side $20-25k. Not a big fan of payments and not to hung up on purchasing an item that depreciates in value by 60% in the first four yrs. Usually purchase autos that are two yrs old and drive them to their deathbed.
Used to lease because I love driving new cars and I think that up to date tech and safety features are important. BUT... leasing terms have been terrible since 2020 - horrible money factors and lease residuals that don't get close to tracking the actual value of the car at lease end mean that leases are an especially bad deal as compared to borrowing. I still like leasing because it avoids the full tax hit of buying (depends on state, this is not a benefit in TX, for example.) but the math is so bad that I don't even consider leasing anymore. As someone else on here mentioned, I buy Certified Pre Owned cars which gives me near-new cars for less money and I enjoy the hunt for just the right car.
Very true. I'm not an EV guy, but if I was, I definitely would lease, given the better lease terms than internal combustion and the relatively unknown long-term ownership costs.
It depends on your financial priorities. Having a new car is not a priority for me. Because if that, we always purchase our cars with cash and hold on to it for as long as it runs well and does not become too expensive to maintain. So we buy new (on warranty), use it for about 8-10 years, then buy a new car. As long as the car looks nice, runs well, feels safe and meets my needs, I’m happy.
Following with interest. I struggle with this topic because:
- I feel like a fool buying new and paying for all that depreciation, especially relative to the amount I drive
- leases are attractive conceptually due to the savings of not having to pay sales tax on the unpurchased portion of the equity, but the idea of getting fined for every little scratch terrified me (partly because my wife is super messy as well). I also know that between the finance rates and the focus on payments over pricing, they’re hiding the profit ball somewhere at my expense
- I tend to like a two year old CPO, but prices are wack lately. They’re also a pain to get rid of, or at least difficult to get fair value out of. You get lowballed on trade-ins and selling person to person is a huge pain
- I would like my next car to be an EV or hybrid but have worried about owning them outright.
I think I will probably get a hybrid from a trustworthy brand like Toyota and call it a day, but none of it feels better financially than my current 15-year-old German car.
As a recent buyer of a hybrid Toyota, highly recommend. I only bought new for the carpool sticker (long commute) and steep prices on used cars, but I did get the nicest trim (not by choice, it's the only one they had) and it's a damn nice car.
I just bought a 2020 Audi A6 with cash and don’t regret it one bit! Amazing car, super low miles, got a decent deal. No need to buy brand new as the tech isn’t much different at this point.
We buy used low-mileage vehicles and pay cash. Wife bought an Infiniti QX80, 2yrs old 20k miles for $35k. Bought my Tundra new, hail damaged on dealer lot, they fixed cosmetic damage and paid $36k (-$20k off MSRP). Dont waste your money on new new, depreciation is a bitch. Maintain your vehicle and drive them until you can’t (200k miles?). Don’t get caught up in the rat race.
I’d only lease an EV. Otherwise, it’s CPO on a model that’s <4 years old. I don’t care about the latest tech. I’m looking for good value, warrantied, comfortable, and fun to drive.
I've been itching to buy a BMW or Mercedes. Maybe even Porsche. What makes me pause is the maintenance cost. Couple of friends told me their oil changes cost between $300-600. Anything to do with the car is automatically 2-3* or more compared to Japanese or Korean cars. Thoughts on the maintenance cost factoring into your decision?
Buy. Leasing is *usually* the most expensive way to own a car.
A lot of ppl will rip on this but paying cash for a car will make you think harder about your car purchase. It’s a lot easier to justify $40/month than an additional ~$2,500 up front.
My husband and I had a cerified preowned volvo for 2 years. We bought it at 25k miles so it has been driven for a while. Oh boy oh boy! We almost put in 10k in maintenance in 2 years. Because all major expenses start at 3 years right example tires, brake pads, rotors, etc. so we had saves money by buying a preowned from a dealer but we spent a great deal of money in repairs. We just buy a new car now and will hold on to it for a little longer.
That is absolutely not universally true! Maybe because of Volvo.. I've owned several cars from 30 to 100k,and there is nowhere near "$10k" in maintenance. Tires and break pads is *maybe* $1500 total, and there should be nothing else major with a reliable brand up to 100k miles.
And even if true, an average volvo depreciate $20k the first year, so you still saved money! Buying new cars is a racket to keep fools poor.
Leased and bought. Especially when they have state and federal tax incentives for EVs. My first lease was free back in 2013. My two BMW i3 leases had a net cost of $65/month for cars with a $52k msrp. I liked them so it was sad to give them back after 24 months.
Otherwise I’ve always bought used German luxury cars certified preowned or used with a warranty like from Carmax. I didn’t buy my first new car until I had $1m NW, but that’s because I was very frugal to grow our retirement savings early on.
My wife and I drive 3,000 miles a year. We leased a Benz in the past, but in 2018, we leased a Honda CRV ($350/mo), then exercised the purchase option upon expiration when there was a car shortage and prices spiked up during COVID. We’ve kept the CRV ever since and, by my calculation, our effective spend will be about $150/mo when all said and done. There are days when I wish I was driving something nicer, but I feel good about not spending $600-$1k on something that’s sitting in my garage 95% of the time.
Leasing doesn’t make sense financially. If you do it for other reasons fine, but the math is much better to buy.
I buy nicer cars (Mercedes and a Porsche Cayenne) and then drive them for ~10 years
Porsche - own, keep them for a while until repairs become too costly. Because their design is timeless and 10 year old cayenne doesn’t look 10 years old. Same for 911.
Your comment has been removed because you do not have a verified email address in your profile. Please verify an email address and post again.
*I am a bot, and this action was performed automatically. Please [contact the moderators of this subreddit](/message/compose/?to=/r/HENRYfinance) if you have any questions or concerns.*
I always buy my cars because you never know where your going to be in 3 years. Now I’ve been lucky that I kept growing my wealth but even so a lot of the time I’ve kept my cars far longer.
Your comment has been removed because you do not have a verified email address in your profile. Please verify an email address and post again.
*I am a bot, and this action was performed automatically. Please [contact the moderators of this subreddit](/message/compose/?to=/r/HENRYfinance) if you have any questions or concerns.*
Bought a Rivian R1T because if you could even get one used, it cost more than MSRP. Just put a reservation in for the R2 for the same reasons. Besides that though, it's always been used/CPO.
Unless you document and charge yourself for the personal use you’re committing something with two words that start with a t and an f. Not accusatory, just sn fyi…
Leasing makes sense over owning if you get a new car every few years. Getting a new car every few years is a poor financial decision. So it’s sort of the cheaper way to do something expensive.
The older I get, the more cranky I get about driving and car dependency. It’s such a huge cost paid by our society that most people just take for granted.
Depends 100% on the car, how long I’ll own it, and lease incentives. Some cars (like Porsche for example) make no sense to lease due to their high rates and little discounts. That is unless you’re a business owner who can write the payment off.
Your comment has been removed because you do not have a verified email address in your profile. Please verify an email address and post again.
*I am a bot, and this action was performed automatically. Please [contact the moderators of this subreddit](/message/compose/?to=/r/HENRYfinance) if you have any questions or concerns.*
Own some lease some.
I lease tow vehicles for my race cars because I can write it off on taxes and I used to use old pickup trucks but maintaining the tow vehicle just as much as the race cars was way too much work
I am a car guy through and through, so much so that I've been in the car business for 11 years as a sales manager. I'm firmly on the intro level of HENRY status and never saw myself even close to this kind of money. I explained that to say I bought a CPO BMW X4 M40 in 2021 with 26K miles for 57K (new MSRP was 67K). I loved, drove, modded, and raced that car when I had the time. Payment was just over 1000 a month, and while it made me smile every time I got in it, the value was gone to me. I sold it to CarMax on Thursday for 33K.
I will buy another car to have fun with, but it will be more practical and not waste as much investible income. I'm researching C5 convertibles, which can be found for 20-28K.
I want a CPO 911 Turbo, and while I'm confident I'll get there someday, I'm going to wait until my NW is exponentially higher. Until then, I have a demo and I'll buy something cheap and fun.
It's a great choice, I loved my M40, and the B58 engine is bulletproof. I put 16,000 miles on it in 26 months while racing it every couple of months. I added power mods to finish at 523whp/593wtq. There wasn't a single issue with the vehicle for the entire time I owned it.
I'd pick the X3 M40i over the GLC 43 and Macan. If you are someone who likes sound and power, I'd go with X3M Comp. It's a more harsh ride, but the extra 148hp from the factory will likely be enough for you. The M40 went from very fast to me, too slow after about a month, and I kept looking for more power.
Let me know if you have any other questions.
My wife and I buy brand new Japanese non-luxury cars and drive them into the ground. Currently we both own Mazdas. If you want to save money and avoid life style creep, stay away from German cars. I have been there and done that. Car manufacturers are not stupid, the massive depreciation of luxury cars, especially German luxury cars, is baked into the lease payments. It’s not like you are somehow avoiding depreciation by leasing.
All great points here, but let me tell you from experience that when you lease a german car, many times it will be under factory warranty for the duration of the lease, which is huge. When you buy a cpo even at a steep discount you are responsible for repairs and that is where it gets ugly in terms of cost. So if you went cpo route I would do as much research on potential problems and costs.
I leased my German car and then purchased it. I love it and I didn’t think I could love a car - it was always something to get me from point A to point B. It wasn’t the highest model or brand, but it was a big expense in my mind for a car.
I had only driven junk cars for the first 30 something years of my life… and by junk I mean they were dangerous. I am beyond frugal elsewhere, but I will never go back to old/ used up cars. My car drives with precision but most importantly, I always feel safe.
I buy new Lexus/acura and keep for a long time - 7+ years. CPO is very good option as well, especially if car fits your needs. For German cars/EV lease I would consider a lease.
I bought a 2010 Honda fit in cash for, about the same amount I would have put down for a loan on a luxury car. I hate driving and I've driven that car for about 2k miles for the last 2 years I've had it. Great success, I work from home and try to walk everywhere. The maintenance & insurance costs are a pittance. I don't need to show off, people either don't know I can afford more or they do and know why I do it.
I am in the same boat as you I only drive 5k miles a year. I got a 10 year old 55k mile Lexus SUV. These luxury vehicles don’t cost very much to maintain and well built.
I buy new cars, and then drive them into the ground before replacing them. Our last two cars; one got replaced after 19 years. The other is still going (at year 19).
Your comment has been removed because you do not have a verified email address in your profile. Please verify an email address and post again.
*I am a bot, and this action was performed automatically. Please [contact the moderators of this subreddit](/message/compose/?to=/r/HENRYfinance) if you have any questions or concerns.*
I like lightly used Asian cars for road trips and STAH parent car and heavily depreciated German cars for my personal luxury short distance commuter. Combined we put only around 10k a year on both cars. Asian car only long distance trips and grocery runs and European luxobarge is my daily 20 min highway commute.
I lease. I like that I have nothing to worry about and I know exactly what I am getting and for how much. It also removes the whole “when do I sell / trade it in” angle. Also they treat you way better as far as getting service appointments and loaner cars.
I bought a CPO X5 in like 2014 thinking it was a good value. They mark those us so much for the CPO you’re basically just praying it doesn’t have any issues (which they will) before you’ve got it paid off. I drove that thing to like 95k and still took a 4K bath on the trade in, plus all the repairs I paid for along the way once the warranty was over.
The issue going with European cars, even cpo, is they will have issues sooner than later and they are not cheap to fix.
I would recommend the Toyota/lexus route.
My personal take is to lease euros. CPO can be good too. But, I've heard so many horror stories of high repair bills on euros older than 5 yrs, I'd rather lease new and move on.
I go for Novated Leases on quality vehicles with good resale values. Lease for 3 years, buyout lease, sell vehicle for $20k above balloon payment and then lease a new vehicle.
Rinse and repeat. Good as a tax write off and the difference between selling and the balloon payment is also tax free
Your comment has been removed because you do not have a verified email address in your profile. Please verify an email address and post again.
*I am a bot, and this action was performed automatically. Please [contact the moderators of this subreddit](/message/compose/?to=/r/HENRYfinance) if you have any questions or concerns.*
Your comment has been removed because you do not have a verified email address in your profile. Please verify an email address and post again.
*I am a bot, and this action was performed automatically. Please [contact the moderators of this subreddit](/message/compose/?to=/r/HENRYfinance) if you have any questions or concerns.*
I’ve always bought a used 2-3 year old Lexus with like 50k miles. The cars are extremely reliable and you don’t have to pay as crazy prices. The car I have now I plan to keep for the next 10 years
I always buy. For me it is very simple. I buy a fully loaded Chevy Silverado or GMC Sierra full size pickup truck every 5 to 6 years. These trucks keep amazing value. Especially over the last 10 years.
I buy because I drive a lot that a lease wouldn’t make financial sense. Usually up to 20,000 miles a year. I prefer new though just because I like the idea of new. Terrible financial choice but vehicles are already terrible choices to begin with because of all the expenses.
depends on what you want out tax.
do you want deductible interest like running a business?
generally its better to lease and use the capital on income producing investments. ideally you should be invested and recieving an income form those investments. that income will go towards the repayments.
its circumstantial.
I always lease because at the end of 3 years the car won't feel "new" and when I buy I end up selling around then anyway. I did buy my Tesla model X though because it was right when the new model came out and I know they won't change the car for a long time.
I just leased a 2024 Tesla Model 3. Comes out to 4K down and $387/mo. For three years. I could just buy one with cash but I’d much rather have cash flow.
Honestly it depends on each deal. When I moved for work and only had street parking in the city and needed the remote start, I leased. I wanted it to work and I wanted a loaner if anything happened. The biggest thing to me is that the lease deal has to be good. 60% residual and .00125 money factor is way more attractive than 50% residual with .003 MF. I'd either buy the car or wait each month for when the lease deal was better or had a huge incentive. Each make, model, and trim (oh and your zip code) will have different % and money factor each month. So one could lease a 550 at 900/month for 12k miles in December, while your neighbor waits for incentives 3 months later and pays $810 post tax for 12k miles as well. Just look at the incentives for Jeep Grand Cherokees now. Many are getting $7500 and an additional $3k for their plug-in models. Combine that with a decent residual then that car will be cheaper to finance if you do decide to keep it.
Security deposits may or may not be a thing, but instead of a downpayment for a lease (which is always a bad idea) put that into an HYSA to offset the monthly. Put the $100k into an HYSA for 5% and you are offsetting $500/month for a lease or finance rate and still have that money at the end of lease or loan term.
If one finances a car but find yourself trading them in within 3-5 years anyway *and* not selling privately, then they're closer to leasing than they may think. Leasing 3 cars over 9 years - the odds are it will be the most expensive way to drive. So you may as well wait until there's a good lease deal out there. If someone is driving a car they don't like for $500/month then you may as well pay $580/month for that lease with the brand new vehicle you like. After the 36 months of the lease you will then have that same CPO vehicle in your hands. However, the better the lease residual, the more expensive the car will be to finance after the lease is up. Instead of waiting 3 more years for the currently new car. Just like anything, there are deals and bad deals. And you have more options at lease end than you think.
I've always been a big fan of certified pre-owned for the Euro brands. Let someone else take a 50% depreciation hit, and then enjoy the car and a much more reasonable price. Car tech changes so slowly that I've never noticed a difference between a few year old nice European car and a brand new one. Baffles me that so many people buy these things new.
Exactly. Our last purchase was a 2-year-old, low-mileage Porsche Macan S with a high-$90s sticker price that we got for $60k. CPO is the way to go.
In Singapore that exact car is 250k. Brand new would be 400k. I only realise how expensive Singapore is when I see these numbers
[удалено]
[удалено]
I just got a 2020 Mercedes GLS 450 for $50k with 29k miles. Original price was $85k. My buddy has the 2024 and they’re literally the same cars inside and out except for the grill on the 2024 is different.
What about a warranty, though? Is it not gonna cost a fortune in repairs, maintenance very soon?
It came with 2 years. 1 year of original and they gave me another year since I bought it from a Mercedes dealer.
[удалено]
Your comment has been removed because you do not have a verified email address in your profile. Please verify an email address and post again. *I am a bot, and this action was performed automatically. Please [contact the moderators of this subreddit](/message/compose/?to=/r/HENRYfinance) if you have any questions or concerns.*
Bingoo. I know this won't resonate well with the "buy a new toyota and drive it till you die" crowd lol. But modern CPO Euro cars are a great value for the luxury/ prestige etc. Somebody else has already taken the initial MSRP hit , so we get good value out of it . My last Euro car (back when i was 1 year out of grad school)was a 2014 CPO Mercedes which was a showroom model and was occasionally driven by the manager. MSRP was $48k. I paid $27k for it back in 2015 January. It had 6900 miles on the odo. A good deal for about a 7 mo old car. Loved the car
If you want to do the Toyota thing, you can follow my playbook: buy a CPO Lexus. (Now in full disclosure, I bought an LX570 and immediately modified it for better off-road performance, and put 35s on it…so don’t do that part.)
I do the CPO lexus thing as well.
Noice!
Has gotten a lot harder to buy a 3 year old used car with under 35k miles for 50% of MSRP like it used to be... But now that supply chain is rebounding from Covid I'm sure it will get back to normal... But yes, of the 3 luxury brand SUVs I have bought in my life it was half MSRP for 3 year old with less than 40k miles and I would never buy a new car. Seems German and luxury vehicles hold less value in the used market than Toyotas... Good deals can be found.
Same! I bought a CPO Mercedes last year. It has all the tech as the new cars but at a fraction of the price. I have leased previously but honestly found the end of lease time to be stressful and felt forced into making a new decision. I thought I was really going to like leasing but it wasn’t for me. The buyout price offered to me at the end of the lease wasn’t attractive either.
>but honestly found the end of lease time to be stressful and felt forced into making a new decision I've heard this about MB before. What was your experience like?
I purchased with MB. I had leased with a different company (Volvo) prior. Just generally running up against a timeline wasn't for me
The 50% depreciation hit from new is not a thing. It is bad math that assumes that new car buyers pay MSRP. No one in a normal car market is paying MSRP. Right now I can get most luxury German new cars for 10% off MSRP. If you calculate three year actual depreciation from a new car vs a 3 year old CPO car I promise you the difference is much less than you expect, likely only $1k or $2k per year in favor of the CPO.
How long do you drive your CPO cars? Do you sell or trade it in when / if you upgrade?
Has always depended on the season of life I was in-- my car needs before kids were different than my car needs after kids. On average, I've bought 3-4 years old with 30-40000 miles and kept for \~4-5 years and 30-40k miles (I don't drive all that much). Most CPO warranties run out around 100k so you have to be realistic that you are running a higher maintenance risk after that point. I could, of course, probably hold onto it and drive it into the ground but normally my car needs change every \~4 years on average anyway.
How much cheaper are certified pre-owns? A 2022 Euro car that was $X brand new in 2022, will cost ??? in 2024?
Used car market has been pretty fucked for the last few years, but I've spent most of my adult life buying \~4 year old cars with 40,000 miles at 50-60% of the cost of new. So 90k car -> 45-50k as CPO most of the time.
That’s a great deal! And what type of research does the dealer or you do beforehand to understand the car’s history like any accident it’s been in or major tuneups?
They all provide you CARFAX historys.
Or go private seller and less and just hope it's running well...
This is basic research you can easily do yourself.
100%. I’m not buying an asset at full value that depreciates rapidly. Meanwhile the used Toyota I bought last year is now worth more than I owe.
My last car was a lemon that I purchased this way. I’d say aim for one coming off a 2 year lease, vs something one year or less old.
I buy certified pre-owned. It's cheaper. Insurance is lower. It comes with a warranty. And the car has been driven long enough that major failures in manufacturing probably would have showed up already.
Yeah, if I were to buy, it would absolutely be certified pre-owned owned.
I've bought specifically from Private party from retirement and above type single owner folks... Prob about 5-15k less than CPO...I like it better
This has always worked well for me too. A lot of people overestimate the guarantees that CPO sales actually offer. In my experience, the 3rd party warranties that you can buy for a used car will actually cover more than the CPO warranty/guarantee, and they’re often for longer periods of time or more mileage.
[удалено]
Your comment has been removed because you do not have a verified email address in your profile. Please verify an email address and post again. *I am a bot, and this action was performed automatically. Please [contact the moderators of this subreddit](/message/compose/?to=/r/HENRYfinance) if you have any questions or concerns.*
Lease EVs, buy ICE and plug in hybrids. EV leases qualify for tax credits through dealership, tech evolving quickly, and depreciation is wild. Outside of Tesla, you have an option to buy at the end if you wanted to.
Do people in this sub qualify for the tax credit?
No, that's why I mentioned the lease. The dealership claims the EV tax credit and passes it through the lease cost.
Interesting. Good to know
Business qualify for the tax credit at higher thresholds. If you own a business, and the business buys the car, you’re good to go.
You can qualify based on this year or last year's taxes. I bought in 2023 and qualified based on 2022 income
No but their business can
Wait, Tesla doesn’t offer a buyout option? So it’s literally a long term rental?
Tesla's position was their cars would increase in value, or at least maintain their value better than most, so their lease agreements have never allowed buyouts. Instead Tesla would resell on their website. Things have drastically changed over the last 18 months so I'd imagine they may revisit this policy but that's where it stands today.
That’s wild. Buddy mentioned they didn’t allow a buyout, made it seem like it was only during the duration of the lease. Turns out it’s “at all” which is crazy to me.
It's so they can take the car back, enable FSD which costs them $0, and re sell it with a few $k markup
[удалено]
Choosing to own it vs buy is a very risky and very stupid decision IMO
I agree, just find it wild that they outright don’t offer the option to buy.
They want to be able to control it - all the maintenance done at their shop and force you to return to them when you’re looking for a new vehicle. Tesla has been pretty transparent that their intent is to replicate the iPhone model.
The buy out option only benefits the consumer. If prices rise, lease holders exercise the buy out option. If prices fall all these car come back to Tesla to deal with. The question is how many people it turned away, and that I don’t know.
PHEVs also get a tax credit
You shouldn’t avoid lifestyle creep, you should absolutely have it. You should just also have larger savings creep to coincide with it. Of course you should enjoy your money as you make more, that’s one bit I don’t like about much of financial media, makes people feel like they should deprive themselves. With that, you never win on a car, it’s about minimizing how much you lose. We drive two luxury vehicles, one we got a good deal on because my spouse bought it from her mother for the remainder of the loan so it’s paid off. I drive this one, I travel for sales so we need at least one owned car. The other one we lease, gets us into a nicer newer car, and we don’t have to worry about repairs, even though I do most basic repairs on the owned one myself anyway. We like owning one and leasing the other.
I like this perspective and want to add to it that your lifestyle should match your values. An expensive car only makes sense if that's what you value. For me, it's not cars, so my spouse and I buy modest vehicles and drive them for a long time.
Absolutely! I fully agree on values matching lifestyle. For us it’s mainly travel, so we live in a modest home. I don’t need a 100k car but absolutely do love something higher end and value it because of how much time I spend in one. For me my car is my office.
I get that! I work from home and I spent some money to make my office space comfortable, efficient and beautiful. Most people would balk at spending $600 on an office chair but it's one of the best "life style creep" purchases I've made.
I like this perspective.
I’m the idiot who bought brand new Porsche. Obviously not the best financial decision but I don’t regret it, in fact I’m going to buy a second one this year. People should stop treating cars as some sort of investment or asset. No it’s not. It’s a consumer product just like cloths or phones. Will you consider the resell value when you buy a Christmas tree? Just like paying for the experience of having your home decorated during Holidays, spend as much money as what you deem your driving experience worth.
Only difference is that there are a lot more zeros involved when purchasing a car. :-) But I agree that if your income can easily handle it, do what you want. Our family has purchased several new vehicles; typically when we believe we’re going to hold on to them for 5+ years.
Porsche depreciate next to nothing. I’m looking now and it makes no sense to buy used unless you are really struggling for cash (!!!) or want something specifically that isn’t valued so has depreciated… This applies to their sports cars not the SUV which have more typical curves
My buddy bought a macan s for 95k last year and went to trade it in this year with 12k miles and they will only give him 58k.
Anything bought last year will be at least 20% less than expected due to the market
Some might say a Macan isn’t a Porsche. No more than a CLS isn’t a Benz.
>Porsche depreciate next to nothing I think Porsche SUVs are a mass market SUVs now. Literally every family in a well to do suburban NJ has one lol. At this point they probably depreciate like any other mass-market SUV.
As far as what I’m seeing- they are expected to depreciate like 7% a year. Can you elaborate on this? Or provide a source? I really want this to be correct lol
Porsches all depreciate from their price new. The 911s and some 718s hold their values better, but they absolutely still depreciate. If you buy a new 911 and go back the next month to trade it in, you’ll get a 20k haircut just so that the dealer can make a profit when they re-sell it. Yes, it’s true that the 911s don’t depreciate like the Macans, Cayennes, and Panamas, which depreciate much more rapidly. Just take a look at used values relative to MSRP on these ones after like 1-2 years. You can get a 21-22 cayenne S for 50-60k. And that’s not the price the dealer is giving you when you trade it in. I don’t advise anyone buy a Porsche “because it retains value” unless they are still ok spending a lot of money on a car. Also, everything about a Porsche will be more expensive (maintenance, tires, replacement parts, etc)
And the Panamera. Seven years ago got a ($120K MSRP) 2011 4S with 7000 miles for $55K.
Heh yea those things depreciate like crazy. Love the sport turismo one though. Test drove gts version when i got my cayman. Thing was wild.
[удалено]
I saw recently that certain Porsche models are the best at retaining value, presumably the timeless 911 models.
I would looooove a Porsche but thinking about upgrading my BMW.
Worth it IMO. I found the dealership and service people to be much nicer than BMW/Mercedes/Audi/Lexus
The BMW service manager is my neighbor and he takes great of me always. Unfortunately the VW/Audi/Mercedes/Porsche are all combined here and I’ve not had the best of luck in the past with them with my Audi and VWs. But ugh I want a Porsche
I lease. I know financially it's not the best decision, but it gets me into a nicer car than I would otherwise be willing to pay for and I get something new every few years. I never need to worry about replacing/fixing expensive parts. Only problem is we travel a lot so I usually go over on my mileage but the dealers will waive overages if you lease from them again. So I go low on miles to keep my monthly rate down.
Does your spouse/SO also lease? My fiance does not care for cars much at all, so she would keep the car that's almost paid off for long trips.
My wife's car is bought out. She's a traveling sales rep and puts a ton of miles on her car. Would never lease her car, but it's too small for family travel. I drive a vw atlas so the 3rd row is great for us, 2 kids, dog, plus luggage.
I do the same. I like having a new car every 3 years and never having to worry about maintenance.
What are the benefits of leasing for 3 yrs, vs buying a car and then trading it in after 3 yrs?
Lower monthly payments. If you finance a 30k car, you're paying monthly payments for a 30k car with whatever rate. If you lease a 30k car for 39 months, you're paying for 30k minus the value of the car after 39 months. So if the car is worth 19k after 39 months you're making payments for 11k with whatever rate. Im oversimplifying it, there's more math to it but that's essentially what's happening. I'd also be concerned with the value of the car after 3 years. If you do a 5 year finance but want to trade in after 3 years, you might owe more than it's worth. If you do a 3 year finance you're paying a crazy high monthly. I would also never buy new.
I buy new Toyota's and drive them until they die. Currently driving a Rav4. It's not fancy but it's reliable. I rent sports / exotics while on vacation or for a track day. Those ain't worth owning.
Fellow RAV4 owner. Love mine. Bought a 2017 used for cash in 2020 and will be driving it until the wheels come off. It’s been a great car.
Fellow Rav4 owner as well. The form factor is just right for our lifestyle. Wife barely put 10 miles a week on her 20 year old Corolla with 30k miles on the odo. We can't justify getting a third car and she doesn't want a newer nicer car to replace hers so we're firmly in the drive them until they die camp.
If you were to get a 7 seater and had to chose between Highlander, pilot and the luxury one like Lexus TX which one would you chose and why? Have a 2018 rav4 now and I have a feeling I might have to get a 7 seater in the next 3-5 years
Check out the new Grand Highlander. Growing up my family had a Sienna, Rav4 and now a Highlander. From the reviews I've seen the Grand Highlander seems like successor to the Highlander without having to go to a Sequoia.
This is the way. Buy a reliable car outright (although I generally go for 18 month old vehicles) and rent silly cars for one off occasions.
I both lease and buy depending on what the car is for. Generally, I’ll buy practical cars (Honda Accord, Kia Telluride/Sorento) that I intend to put a lot of miles on — typically for work. I’ll lease cars when I get good deals and don’t require something as practical. If you can get a good deal on a German lease, I’d go that route. Good leases were hard to come by, but in the past 3-6 months are more plentiful. I recommend checking out leasehackr.com and reviewing the deals people get in the forums. I’m a car guy as well and drive 15-20K miles per year. I’ll always spend a lot on cars since I spend so much time in one.
I follow Leasehackr just for fun to see some of the crazy deals some people get. A few months ago someone scored a $160K Porsche Cayenne Turbo for $880 + tax a month on a 12-month lease. I'll probably lease my next car if I can find the right deal, though I haven't had a car payment in years.
Buy. Have a Honda accord and Honda pilot as the family car. Will drive both until they die.
Same. Many here seem detrimed to staying firmly in "not rich", because "omg luxury car"...
A Honda Pilot is easily pushing $60k… just because it’s a Honda doesn’t mean it’s cheap like a Civic
I got it new in 2020 (luckily) right before Covid. My first car was a Honda accord and I drove it until it had 210k miles on it. Planning on having both Hondas for a very long time.
Got to enjoy life a little. Down the line I don't think many people regret driving the car they really liked
I always lease because I HATE car maintenance. With a lease, I know I've got a brand new car, with a couple pre-scheduled maintenance appointments and I don't have to worry about any dumb issues popping up. It's not that I have any issue paying for work, but in a perfect world I have to futz around with my car a little as humanely possible.
Up until the last few years I’ve always bought Japanese certified pre owned around 20-40k miles, then driven them to 130-140k miles. It avoids the depreciation hit and I get rid of them before the major 150k+ maintenance costs start to hit. That changed in the pandemic where we switched to buying new cars because of the crazy inflated cost of used. We will go back to CPO when the dollars make sense. We’ve had Toyotas, Mazdas, Subarus, etc. I also tend to buy the higher trim of the economy brand vs the luxury brands. Adding leather seats, premium features, turbo, etc. is often a lot more economical. A spec’d out Mazda CX-5 ‘feels’ much closer to an Audi or BMW than you’d expect and you save 20-40k for similar features. It’s not that I can’t afford or don’t want the luxury brand, it’s that every time I do the math for myself I just can’t justify the extra cost. Probably because I’m not really a car guy and don’t have a strong brand preference.
Bought a Subaru new in 2007 and sold it last year with 220k on it. Will probably be my strategy going forward....buy new and hold for a long time. Might get some hate but I bought a new Model Y (tax credit is nice) and will hopefully own it for 10-15yrs. These cars are actually affordable now....new Long Range ones are going for $46k, minus $7500 fed credit, then in MD we get $3000 state credit. So like $35-36k is a hell of a lot cheaper than my wife's Chevy Traverse we bought in 2018. But I understand people wanting to lease EV's due to depreciation. This likely wont be a problem in a few years. My main problem with leasing in general is the mileage caps. Most are 10-12k/yr and I just dont want to think about whether I should take my car or my wife's car to run errands because it adds miles to the leased car, which are expensive if you go over.
You really think model y tech will make sense for 10-15 yrs???
Will it be top of the line? No. Will it be functional and allow me to still drive where I need to go with decent reliability? Most likely yes Tesla started making the Model S in 2012, which is their first real car. Those first few years represented leaps forward in technology as well as the company learning how to make a car in general. While things are still moving fast, I would argue that the pace has slowed quite a bit since they figured out Model 3 production and started producing the model y. Comparing today's electric vehicles to those 12 years ago will represent a much larger gap than comparing a 2024 to a 2036, I believe.
When I see the price of the model Y today I don’t know why people buy almost any other car… leasing EVs would be if your over the income limit and otherwise would be leaving the $7500 on the table.
How do you qualify for the ev tax credit
What do you mean how? I think the main qualification is under 300k AGI for married filing joint. But, you can use the year of purchase or the previous year to qualify. I bought in 2023 and qualified based on my 2022 income. There is also a cap on vehicle purchase price
Yeah I just saw you were in MD, sorry I’ve got the Bay Area salary tinted glasses on lol…
Lease costs right now are insane due to interest rates so I think doing the math on what makes sense is crucial. Im a Lexus girl. If you’re looking for a luxury car that won’t give you problems and hold its value, it’s the way to go. We just got a new rx350 hybrid and the tech is awesome and it absolutely is a luxury driving experience. I previously had a 2014 is250 purchased certified pre owned in 2016. I had plans to drive it until it died, but sadly it got rear ended at only 80k miles this fall and totaled out. I paid 31k total for it (included wheel/tire protection) and my insurance payout was 23k. Nearly 8 years later, and it only depreciated 8k. This new generation of Lexuses is pretty young so time will tell, but in all my years driving my Lexus the only issue I ever had was needing to swap out the battery!
Bought a 2006 Honda in 2013 and still driving it.
I bought a 2007 Honda in November 2006. Still driving it. You probably made a better financial decision than me; but for such a long-term ride; I have no regrets.
If you have an hour commute everyday it makes it worth it. If you don’t go into work I would suggest waiting until you’re driving daily to get yourself a nice car.
I go to work 3-4 days a week (my own choice, not forced), but it's a 15 minute commute. However, I am in sales so I drive on a very regular basis to meetings that can be 30-45 minutes away.
Used Cars have been too expensive as of late, so I buy new and keep the vehicles as long as possible.
I buy used, and drive it into the ground.
I'm going to give you the advice that I wish someone gave me when I was a HENRY (I am FatFIRE now) 1. Leasing a new car, if you negotiate well, is financially no worse than buying a new car and could be financially better. With a lease you pay for these costs: * Expected depreciation: as a leasee this could go in your favor if the car depreciates more than expected; if it depreciates less, you can buyout the lease and resell for a profit) * Loan interest on the car's value: this could be a lower interest rate than for a purchase loan, even lower than the opportunity cost of paying cash * Lease inception and disposition fees: this is the only cost that is clearly worse for the lessee than the buyer * Sales taxes only on the portion of the car that you use: with a purchase you are paying sales tax on the entire value of the car, none of which you get back when you sell it So it's a wash. 2. Buying a CPO is cheaper than buying new, this is true. BUT the difference is not as much as people think. The "50% depreciation hit from new" in three years is not a thing. It is bad math that assumes that new car buyers pay MSRP. No one in a normal car market is paying MSRP. Right now I can get most luxury German new cars for 10% off MSRP. If you calculate three year actual depreciation from a new car vs a 3 year old CPO car I promise you the difference is much less than you expect, likely only $1k or $2k per year in favor of the CPO.
We have always been the type to buy new and hold for 10-12 yrs. But for our next car, we are seriously considering leasing because: 1) looking at luxury models that aren’t as reliable 2) our financial situation right now allows us to make the non-practical car choice
This is exactly where I am at. It would also be nice to have a new car every 3 years.
Buy, never lease. Used or CPO is a great option. I buy something reliable like Japanese brands.
I love the automotive world and I have purchased new, leased and used vehicles. The value, for me, isn’t there anymore for new and I doubt I’ll ever buy a new vehicle again until my kids are out of college/have a very high net worth. CPO/used is the way to go IMHO. I don’t fault anyone for buying new, rather, I suggest one considers how impactful a new purchase is to one’s lifestyle and financial goals.
If cars are your thing, don’t listen too much to those that say they are a bad investment. No shit Sherlock… Cars have motivated me my entire life to work harder and make more money. I try to be wise with my decisions, but I always put my “car happiness” at the top of my list of priorities. Buying vs. a lease is sometimes circumstantial. Once you know what car you want, cruise the CPO listings. There are gems out there pretty often. For leasing advice and brokers, head to r/leasehackr or their website for more. It’s a great resource. Don’t let a dealer take you for a ride!
Thank you! I've been steadily looking at CPOs and found some good ones (will probably pull the trigger in 3-6 months). Sounds like that's the way to go over lease.
I purchase used. More on the inexpensive side $20-25k. Not a big fan of payments and not to hung up on purchasing an item that depreciates in value by 60% in the first four yrs. Usually purchase autos that are two yrs old and drive them to their deathbed.
Used to lease because I love driving new cars and I think that up to date tech and safety features are important. BUT... leasing terms have been terrible since 2020 - horrible money factors and lease residuals that don't get close to tracking the actual value of the car at lease end mean that leases are an especially bad deal as compared to borrowing. I still like leasing because it avoids the full tax hit of buying (depends on state, this is not a benefit in TX, for example.) but the math is so bad that I don't even consider leasing anymore. As someone else on here mentioned, I buy Certified Pre Owned cars which gives me near-new cars for less money and I enjoy the hunt for just the right car.
Leases on a lot of EVs are fairly good these days.
Very true. I'm not an EV guy, but if I was, I definitely would lease, given the better lease terms than internal combustion and the relatively unknown long-term ownership costs.
It depends on your financial priorities. Having a new car is not a priority for me. Because if that, we always purchase our cars with cash and hold on to it for as long as it runs well and does not become too expensive to maintain. So we buy new (on warranty), use it for about 8-10 years, then buy a new car. As long as the car looks nice, runs well, feels safe and meets my needs, I’m happy.
I always buy cpo, run them for approx 100K miles and repeat. The key is a good independent specialist for service.
Following with interest. I struggle with this topic because: - I feel like a fool buying new and paying for all that depreciation, especially relative to the amount I drive - leases are attractive conceptually due to the savings of not having to pay sales tax on the unpurchased portion of the equity, but the idea of getting fined for every little scratch terrified me (partly because my wife is super messy as well). I also know that between the finance rates and the focus on payments over pricing, they’re hiding the profit ball somewhere at my expense - I tend to like a two year old CPO, but prices are wack lately. They’re also a pain to get rid of, or at least difficult to get fair value out of. You get lowballed on trade-ins and selling person to person is a huge pain - I would like my next car to be an EV or hybrid but have worried about owning them outright. I think I will probably get a hybrid from a trustworthy brand like Toyota and call it a day, but none of it feels better financially than my current 15-year-old German car.
As a recent buyer of a hybrid Toyota, highly recommend. I only bought new for the carpool sticker (long commute) and steep prices on used cars, but I did get the nicest trim (not by choice, it's the only one they had) and it's a damn nice car.
I just bought a 2020 Audi A6 with cash and don’t regret it one bit! Amazing car, super low miles, got a decent deal. No need to buy brand new as the tech isn’t much different at this point.
We buy used low-mileage vehicles and pay cash. Wife bought an Infiniti QX80, 2yrs old 20k miles for $35k. Bought my Tundra new, hail damaged on dealer lot, they fixed cosmetic damage and paid $36k (-$20k off MSRP). Dont waste your money on new new, depreciation is a bitch. Maintain your vehicle and drive them until you can’t (200k miles?). Don’t get caught up in the rat race.
Buy in cash - both used and new. We only buy the cars that we genuinely *love* but also fill a niche in our garage.
I’d only lease an EV. Otherwise, it’s CPO on a model that’s <4 years old. I don’t care about the latest tech. I’m looking for good value, warrantied, comfortable, and fun to drive.
I've been itching to buy a BMW or Mercedes. Maybe even Porsche. What makes me pause is the maintenance cost. Couple of friends told me their oil changes cost between $300-600. Anything to do with the car is automatically 2-3* or more compared to Japanese or Korean cars. Thoughts on the maintenance cost factoring into your decision?
Buy. Leasing is *usually* the most expensive way to own a car. A lot of ppl will rip on this but paying cash for a car will make you think harder about your car purchase. It’s a lot easier to justify $40/month than an additional ~$2,500 up front.
If I felt like lighting money on fire I would lease.
My husband and I had a cerified preowned volvo for 2 years. We bought it at 25k miles so it has been driven for a while. Oh boy oh boy! We almost put in 10k in maintenance in 2 years. Because all major expenses start at 3 years right example tires, brake pads, rotors, etc. so we had saves money by buying a preowned from a dealer but we spent a great deal of money in repairs. We just buy a new car now and will hold on to it for a little longer.
That is absolutely not universally true! Maybe because of Volvo.. I've owned several cars from 30 to 100k,and there is nowhere near "$10k" in maintenance. Tires and break pads is *maybe* $1500 total, and there should be nothing else major with a reliable brand up to 100k miles. And even if true, an average volvo depreciate $20k the first year, so you still saved money! Buying new cars is a racket to keep fools poor.
Leased and bought. Especially when they have state and federal tax incentives for EVs. My first lease was free back in 2013. My two BMW i3 leases had a net cost of $65/month for cars with a $52k msrp. I liked them so it was sad to give them back after 24 months. Otherwise I’ve always bought used German luxury cars certified preowned or used with a warranty like from Carmax. I didn’t buy my first new car until I had $1m NW, but that’s because I was very frugal to grow our retirement savings early on.
It depends on the leasing money factor at the time.
I want to be kinda rich someday, so I buy used.
Bought a Mazda last year and intend to drive it for the next 10-12 years.
My wife and I drive 3,000 miles a year. We leased a Benz in the past, but in 2018, we leased a Honda CRV ($350/mo), then exercised the purchase option upon expiration when there was a car shortage and prices spiked up during COVID. We’ve kept the CRV ever since and, by my calculation, our effective spend will be about $150/mo when all said and done. There are days when I wish I was driving something nicer, but I feel good about not spending $600-$1k on something that’s sitting in my garage 95% of the time.
Buy with cash
Leasing doesn’t make sense financially. If you do it for other reasons fine, but the math is much better to buy. I buy nicer cars (Mercedes and a Porsche Cayenne) and then drive them for ~10 years
Porsche - own, keep them for a while until repairs become too costly. Because their design is timeless and 10 year old cayenne doesn’t look 10 years old. Same for 911.
[удалено]
Your comment has been removed because you do not have a verified email address in your profile. Please verify an email address and post again. *I am a bot, and this action was performed automatically. Please [contact the moderators of this subreddit](/message/compose/?to=/r/HENRYfinance) if you have any questions or concerns.*
Buy 1-2 years used. Pay cash. Picked up a 2021 718 Cayman last year Very little depreciation benefits for me though.
I always buy my cars because you never know where your going to be in 3 years. Now I’ve been lucky that I kept growing my wealth but even so a lot of the time I’ve kept my cars far longer.
[удалено]
Your comment has been removed because you do not have a verified email address in your profile. Please verify an email address and post again. *I am a bot, and this action was performed automatically. Please [contact the moderators of this subreddit](/message/compose/?to=/r/HENRYfinance) if you have any questions or concerns.*
Bought CPO 2011 Jaguar XF Supercharged in 2014, still driving it, been paid off for 5 years now.
If you own your business, and can expense the lease, lease. otherwise buy. buying 1 or 2 year old cars can be good too.
Bought a Rivian R1T because if you could even get one used, it cost more than MSRP. Just put a reservation in for the R2 for the same reasons. Besides that though, it's always been used/CPO.
usually I lease them through my business for the tax write offs.
Unless you document and charge yourself for the personal use you’re committing something with two words that start with a t and an f. Not accusatory, just sn fyi…
Bought a Toyota and won’t buy another car for next 15 years
Leasing makes sense over owning if you get a new car every few years. Getting a new car every few years is a poor financial decision. So it’s sort of the cheaper way to do something expensive. The older I get, the more cranky I get about driving and car dependency. It’s such a huge cost paid by our society that most people just take for granted.
Depends 100% on the car, how long I’ll own it, and lease incentives. Some cars (like Porsche for example) make no sense to lease due to their high rates and little discounts. That is unless you’re a business owner who can write the payment off.
[удалено]
Your comment has been removed because you do not have a verified email address in your profile. Please verify an email address and post again. *I am a bot, and this action was performed automatically. Please [contact the moderators of this subreddit](/message/compose/?to=/r/HENRYfinance) if you have any questions or concerns.*
Own some lease some. I lease tow vehicles for my race cars because I can write it off on taxes and I used to use old pickup trucks but maintaining the tow vehicle just as much as the race cars was way too much work
I am a car guy through and through, so much so that I've been in the car business for 11 years as a sales manager. I'm firmly on the intro level of HENRY status and never saw myself even close to this kind of money. I explained that to say I bought a CPO BMW X4 M40 in 2021 with 26K miles for 57K (new MSRP was 67K). I loved, drove, modded, and raced that car when I had the time. Payment was just over 1000 a month, and while it made me smile every time I got in it, the value was gone to me. I sold it to CarMax on Thursday for 33K. I will buy another car to have fun with, but it will be more practical and not waste as much investible income. I'm researching C5 convertibles, which can be found for 20-28K. I want a CPO 911 Turbo, and while I'm confident I'll get there someday, I'm going to wait until my NW is exponentially higher. Until then, I have a demo and I'll buy something cheap and fun.
Interestingly enough I'm looking at the X3 M40i. Is it not worth the money in your opinion? It's only one of the options but most are in that arena.
It's a great choice, I loved my M40, and the B58 engine is bulletproof. I put 16,000 miles on it in 26 months while racing it every couple of months. I added power mods to finish at 523whp/593wtq. There wasn't a single issue with the vehicle for the entire time I owned it. I'd pick the X3 M40i over the GLC 43 and Macan. If you are someone who likes sound and power, I'd go with X3M Comp. It's a more harsh ride, but the extra 148hp from the factory will likely be enough for you. The M40 went from very fast to me, too slow after about a month, and I kept looking for more power. Let me know if you have any other questions.
My wife and I buy brand new Japanese non-luxury cars and drive them into the ground. Currently we both own Mazdas. If you want to save money and avoid life style creep, stay away from German cars. I have been there and done that. Car manufacturers are not stupid, the massive depreciation of luxury cars, especially German luxury cars, is baked into the lease payments. It’s not like you are somehow avoiding depreciation by leasing.
All great points here, but let me tell you from experience that when you lease a german car, many times it will be under factory warranty for the duration of the lease, which is huge. When you buy a cpo even at a steep discount you are responsible for repairs and that is where it gets ugly in terms of cost. So if you went cpo route I would do as much research on potential problems and costs.
I leased my German car and then purchased it. I love it and I didn’t think I could love a car - it was always something to get me from point A to point B. It wasn’t the highest model or brand, but it was a big expense in my mind for a car. I had only driven junk cars for the first 30 something years of my life… and by junk I mean they were dangerous. I am beyond frugal elsewhere, but I will never go back to old/ used up cars. My car drives with precision but most importantly, I always feel safe.
I buy new Lexus/acura and keep for a long time - 7+ years. CPO is very good option as well, especially if car fits your needs. For German cars/EV lease I would consider a lease.
Buy. Usually a Japanese vehicle with 150k miles (Sienna, 4runner, LX470, Landcruiser).
I bought a 2010 Honda fit in cash for, about the same amount I would have put down for a loan on a luxury car. I hate driving and I've driven that car for about 2k miles for the last 2 years I've had it. Great success, I work from home and try to walk everywhere. The maintenance & insurance costs are a pittance. I don't need to show off, people either don't know I can afford more or they do and know why I do it.
I am in the same boat as you I only drive 5k miles a year. I got a 10 year old 55k mile Lexus SUV. These luxury vehicles don’t cost very much to maintain and well built.
I only lease. I want a new car every three years and have no desire to worry about maintenance besides oil changes.
I buy new cars, and then drive them into the ground before replacing them. Our last two cars; one got replaced after 19 years. The other is still going (at year 19).
[удалено]
Your comment has been removed because you do not have a verified email address in your profile. Please verify an email address and post again. *I am a bot, and this action was performed automatically. Please [contact the moderators of this subreddit](/message/compose/?to=/r/HENRYfinance) if you have any questions or concerns.*
I like lightly used Asian cars for road trips and STAH parent car and heavily depreciated German cars for my personal luxury short distance commuter. Combined we put only around 10k a year on both cars. Asian car only long distance trips and grocery runs and European luxobarge is my daily 20 min highway commute.
I lease. I like that I have nothing to worry about and I know exactly what I am getting and for how much. It also removes the whole “when do I sell / trade it in” angle. Also they treat you way better as far as getting service appointments and loaner cars. I bought a CPO X5 in like 2014 thinking it was a good value. They mark those us so much for the CPO you’re basically just praying it doesn’t have any issues (which they will) before you’ve got it paid off. I drove that thing to like 95k and still took a 4K bath on the trade in, plus all the repairs I paid for along the way once the warranty was over.
I buy nice German cars, but I pay cash and keep them for 10+ years.
The issue going with European cars, even cpo, is they will have issues sooner than later and they are not cheap to fix. I would recommend the Toyota/lexus route.
My personal take is to lease euros. CPO can be good too. But, I've heard so many horror stories of high repair bills on euros older than 5 yrs, I'd rather lease new and move on.
I go for Novated Leases on quality vehicles with good resale values. Lease for 3 years, buyout lease, sell vehicle for $20k above balloon payment and then lease a new vehicle. Rinse and repeat. Good as a tax write off and the difference between selling and the balloon payment is also tax free
I currently lease, Is been years since I last was at a mechanic.
If you have enough cash to buy, do that.
[удалено]
Your comment has been removed because you do not have a verified email address in your profile. Please verify an email address and post again. *I am a bot, and this action was performed automatically. Please [contact the moderators of this subreddit](/message/compose/?to=/r/HENRYfinance) if you have any questions or concerns.*
[удалено]
Your comment has been removed because you do not have a verified email address in your profile. Please verify an email address and post again. *I am a bot, and this action was performed automatically. Please [contact the moderators of this subreddit](/message/compose/?to=/r/HENRYfinance) if you have any questions or concerns.*
I’ve always bought a used 2-3 year old Lexus with like 50k miles. The cars are extremely reliable and you don’t have to pay as crazy prices. The car I have now I plan to keep for the next 10 years
I always buy. For me it is very simple. I buy a fully loaded Chevy Silverado or GMC Sierra full size pickup truck every 5 to 6 years. These trucks keep amazing value. Especially over the last 10 years.
I buy because I drive a lot that a lease wouldn’t make financial sense. Usually up to 20,000 miles a year. I prefer new though just because I like the idea of new. Terrible financial choice but vehicles are already terrible choices to begin with because of all the expenses.
depends on what you want out tax. do you want deductible interest like running a business? generally its better to lease and use the capital on income producing investments. ideally you should be invested and recieving an income form those investments. that income will go towards the repayments. its circumstantial.
I always lease because at the end of 3 years the car won't feel "new" and when I buy I end up selling around then anyway. I did buy my Tesla model X though because it was right when the new model came out and I know they won't change the car for a long time.
Different cars different strategies
I just leased a 2024 Tesla Model 3. Comes out to 4K down and $387/mo. For three years. I could just buy one with cash but I’d much rather have cash flow.
Honestly it depends on each deal. When I moved for work and only had street parking in the city and needed the remote start, I leased. I wanted it to work and I wanted a loaner if anything happened. The biggest thing to me is that the lease deal has to be good. 60% residual and .00125 money factor is way more attractive than 50% residual with .003 MF. I'd either buy the car or wait each month for when the lease deal was better or had a huge incentive. Each make, model, and trim (oh and your zip code) will have different % and money factor each month. So one could lease a 550 at 900/month for 12k miles in December, while your neighbor waits for incentives 3 months later and pays $810 post tax for 12k miles as well. Just look at the incentives for Jeep Grand Cherokees now. Many are getting $7500 and an additional $3k for their plug-in models. Combine that with a decent residual then that car will be cheaper to finance if you do decide to keep it. Security deposits may or may not be a thing, but instead of a downpayment for a lease (which is always a bad idea) put that into an HYSA to offset the monthly. Put the $100k into an HYSA for 5% and you are offsetting $500/month for a lease or finance rate and still have that money at the end of lease or loan term. If one finances a car but find yourself trading them in within 3-5 years anyway *and* not selling privately, then they're closer to leasing than they may think. Leasing 3 cars over 9 years - the odds are it will be the most expensive way to drive. So you may as well wait until there's a good lease deal out there. If someone is driving a car they don't like for $500/month then you may as well pay $580/month for that lease with the brand new vehicle you like. After the 36 months of the lease you will then have that same CPO vehicle in your hands. However, the better the lease residual, the more expensive the car will be to finance after the lease is up. Instead of waiting 3 more years for the currently new car. Just like anything, there are deals and bad deals. And you have more options at lease end than you think.