In Reply to: Depreciation roughly equal 1st 3 yrs vs 2nd 3 yrs..., Mike Lynch [Profile/Gallery] , Wed, 16 Nov 2005 14:49:34

I bought a 3 year old 9-3SE HO Convertible in 2002. I don't know the original price paid, but the original invoice was in glovebox listing MSRP at $44k, so lets suppose it was bought new for approx $39k. I paid $22k for it. Now its 3 years later and only worth about $9k. So the first 36 months of depreciation cost someone else $472 per month. The second 36 months of depreciation cost me about $361 per month.

I saved about $110 per month. However, I think I may have been able to lease a new 2002 for close to $361 per month, don't really remember the lease rates as I never seriously considered it. If so, I'd have been better off driving a new car.

Now let's look ahead 3 more years. I'd guess that when it is 9 years old its probably worth around $3k? If so, the next 36 month will only cost $166 per month, much less than a lease payment. Of course years 7-9 will have higher mechanical costs than a newer car. My combined depreciation over the 6 years will drop to $263 per month, but at the end of the ownership period I'll be driving a pretty old car - less status, no navigation gizmos, fewer safety freatures etc.

Moral of the story? Cars keep depreciating for quite a long time. If you aren't going to hold it very long term and drive it into the ground, it probably makes more sense to lease. Wish I had done this math 3 years ago, I'd be going out to lease a new car now instead of buying wax to try to make the 6 year old look better!

posted by 64.221.187...

• New car/used car debate, -993-, Tue, 15 Nov 2005 23:25:54
  • Thanks for all the comments and.., -993-, Thu, 17 Nov 2005 20:11:55
  • Just look at the depreciation curve..., STICKMAN, Thu, 17 Nov 2005 06:14:45
    • And look at other costs over time..., Noel, Thu, 17 Nov 2005 06:31:09
      • this is my philosophy, Bob M, Thu, 17 Nov 2005 08:14:41
  • Re: New car/used car debate - longish, johnf, Thu, 17 Nov 2005 00:39:46
  • It's more about what you think you can afford...., Mike Lynch , Wed, 16 Nov 2005 21:38:47
    • Wouldn't your lease payment analysis break down if...?, Dave in Houston, Thu, 17 Nov 2005 04:39:00
      • Re: Wouldn't your lease payment analysis break down if., Noel, Thu, 17 Nov 2005 06:08:31
  • Re: New car/used car debate, Ernesto , Wed, 16 Nov 2005 18:14:10
  • Wouldn't buy any car with >20,000 miles on it, NickR, Wed, 16 Nov 2005 13:49:06
    • I bought my Viggen with 76,000, just passed 130,000, Dave in Houston, Wed, 16 Nov 2005 18:15:35
      • just curious, steveC, Wed, 16 Nov 2005 21:14:39
        • Re: just curious, Shawn, Fri, 18 Nov 2005 15:56:32
        • I commute too, Trev, Thu, 17 Nov 2005 19:47:49
        • Commuting (Ramblings), Dave in Houston, Thu, 17 Nov 2005 04:34:09
  • Good thread. It's not a simple answer.. (longish), Noel, Wed, 16 Nov 2005 12:08:48
  • Don't you think that it's not all about money., J, Wed, 16 Nov 2005 11:41:21
  • Re: New car/used car debate, mb25, Wed, 16 Nov 2005 11:30:51
  • Re: New car/used car debate, kooch, Wed, 16 Nov 2005 10:23:02
  • Re: New car/used car debate, PaulO, Wed, 16 Nov 2005 08:49:55
    • Depreciation roughly equal 1st 3 yrs vs 2nd 3 yrs..., Mike Lynch , Wed, 16 Nov 2005 14:49:34
      • Here are some real numbers, I think Mike Lynch is right, Ken D, Thu, 17 Nov 2005 18:17:44 <-- Viewing This Message
      • Re: Depreciation-- A couple of questions..., Noel, Wed, 16 Nov 2005 15:16:14
    • Re: disagree on one point, JimBlake , Wed, 16 Nov 2005 09:16:15
  • Re: New car/used car debate, OKSaabs, Wed, 16 Nov 2005 08:42:26
  • Need a spray can with "new car" smell..., LeoNL, Wed, 16 Nov 2005 08:18:42
    • How used is used?, SaabSpeed, Wed, 16 Nov 2005 10:10:04
  • Figure the cost per mile to drive new or used car..., JBack, Wed, 16 Nov 2005 07:49:40
  • It' really not that simple...., Herb Hirsch , Wed, 16 Nov 2005 06:20:47
  • Re: New car/used car debate, JimBlake , Wed, 16 Nov 2005 06:16:19
  • Not an econ major but..., NateinAA, Wed, 16 Nov 2005 05:00:17
  • Re: New car/used car debate, SaabSpeed, Wed, 16 Nov 2005 03:15:40
    • Re: New car/used car debate, George, Wed, 16 Nov 2005 09:59:58
      • I paid 15K for a 03 Aero., SaabSpeed, Wed, 16 Nov 2005 10:05:40
        • your numbers are wrong, mattysdad, Wed, 16 Nov 2005 11:10:54
          • that and the fact the 15-3.5=11.5 not 12.5 ;-), markP, Wed, 16 Nov 2005 12:06:09
            • at work doging big brother....sorry.. eom, SaabSpeed, Wed, 16 Nov 2005 19:08:04

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