Cars -- When and Why Did You Switch from Economy/Practicality to Luxury?

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CoastLawyer2030
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Cars -- When and Why Did You Switch from Economy/Practicality to Luxury?

Post by CoastLawyer2030 »

So I started a different car buying thread, but wanted to have a broader discussion about cars in general.

I am a subscriber to Millionaire Next Door and would definitely categorize myself as one of those people who has opted for economy cars and "silent wealth." In almost 20 years of driving, my three cars include a Ford Focus, a Honda CR-V, and now a Toyota Camry.

But as I'm looking for a newer car right now, it's dawned on me that used luxury cars are about in the same ballpark as the nicer used economy cars. In fact, used Toyota Camry's with the SE trim (not even the nicest XLE) are going for more than used BMW 3 series with the same mileage.

My Millionaire Next Door brain is ringing off a bunch of sirens -- "Lifestyle inflation!" "People will think you're rich!"

But honestly I'm at the point where I guess I just don't really care. My wife and I make about $160-170k a year and spend about $65-75k. I am having a great year this year and we might hit $200k. Buying a used BMW 3 series would not really do anything in the big picture.

I guess the point of this thread is that I feel like I am going through the shift from economy car to luxury car mindset in real time. From my searching of posts on here, many Bogleheads have gone through the same change.

So when and why did you change from economy to luxury? And in retrospect, do you have any regrets?
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RickBoglehead
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Re: Cars -- When and Why Did You Switch from Economy/Practicality to Luxury?

Post by RickBoglehead »

It's against my better judgement to answer a question posed by a Buckeye, except for the normal "my pizza delivery job isn't what I thought" job counseling... :P :twisted: Go BLUE!

We've always purchased new vehicles. Usually the mid-range of the line, like Ford's XLT models. When we bought (actually leased, but that's irrelevant) our last vehicle, we got the Titanium model, and were upset to discover it was not made of titanium. :oops: But it had the trimmings we were ready for - including leather seats. We're retiring this year, so we did this 3 years before retirement.

It's also clear that the higher trim models are thousands more, not tens of thousands more, now. When a vehicle is $40K or $50K, that's not as impactful from a OMG standpoint to me.

I expect we'll be buying the higher trim models going forward - but don't expect to be buying BMWs or Mercedes or anything like that. Of course, having Ford's A-Plan does give us an incentive to buy Fords. :D
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livesoft
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Re: Cars -- When and Why Did You Switch from Economy/Practicality to Luxury?

Post by livesoft »

We seem to be able to drive the same car(s) for a couple hundred thousand miles or about 12 to 15 years each. Every so often, there is a thread on this forum about all the cars one has owned in which I learn that some people really go through cars the way I go through hamburgers.

First "luxury" car was a used Lexus RX300. It didn't cost much more than a Toyota. In our area the Lexus RX is a beater car, so there are plenty of them coming off lease and they are relatively inexpensive. Both of our Lexus RXs cost less than our Subaru Outback. The Outback is the same luxe level as the Lexus RX.

We are currently taking a step down-luxe as our next car might be is a Honda CR-V without leather seats and should cost less than any car we have purchased in the past 20 years.
Last edited by livesoft on Wed May 19, 2021 10:36 pm, edited 2 times in total.
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anoop
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Re: Cars -- When and Why Did You Switch from Economy/Practicality to Luxury?

Post by anoop »

CoastLawyer2030 wrote: Wed May 19, 2021 7:57 am Buying a used BMW 3 series would not really do anything in the big picture.
BMWs aren't BMW's anymore, so you might want to re-evaluate your choice of a luxury vehicle. The F30 is especially bad having neither performance nor luxury. If I had to recommend a luxurious ride, it would be Volvo because of the seats. What good are gizmos if the seat itself is not comfy?

As to the original question -- I switched from Civic to BMW possibly at one of the worst financial times in my life (bad job which I eventually lost due to dot com bust and then took a pay cut) but I did it because I was a car nut and had health issues, so it was sort of a knee jerk reaction when the Civic was totaled in an accident.
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Re: Cars -- When and Why Did You Switch from Economy/Practicality to Luxury?

Post by fortunefavored »

The reverse.. I bought my expensive fancy cars in my 20s and early 30s. "You can have anything you want, just not everything you want."

Now I drive 5+ year old used cars.

Even a modern Toyota Camry is more luxurious and nicer than a "luxury" car from 10 years ago.
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Re: Cars -- When and Why Did You Switch from Economy/Practicality to Luxury?

Post by backpacker61 »

CoastLawyer2030 wrote: Wed May 19, 2021 7:57 am In fact, used Toyota Camry's with the SE trim (not even the nicest XLE) are going for more than used BMW 3 series with the same mileage.
My impression is that a used BMW would be a money pit relative to the Toyota Camry, and probably won't last as long. It would be worth less to me.
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Re: Cars -- When and Why Did You Switch from Economy/Practicality to Luxury?

Post by squirm »

We usually buy new cars, but I don't consider Honda a luxury. I also think it's wrong to think buying a luxury car will put you in the poor house if you can easily afford it. I think the other problem is when we're younger and more insecure about ourselves (especially guys), will go out and buy that XYZ car that can go to 60 in X seconds to show off to his friends and girlfriend even though he can't afford it.
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Re: Cars -- When and Why Did You Switch from Economy/Practicality to Luxury?

Post by TigerNest »

Used car prices increased by 10% from March to April 2021 according to the latest inflation report. That's the largest single month increase since the government started collecting data in 1953.

While it's common advice for personal finance folk to buy used cars over new, I would reconsider that advice in today's environment and truly assess your options. A new car may be a better value.

Also, doesn't BMW have the reputation for high maintenance and repair costs? They would not be my first choice if buying a used vehicle.
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Re: Cars -- When and Why Did You Switch from Economy/Practicality to Luxury?

Post by anoop »

TigerNest wrote: Wed May 19, 2021 8:24 am Also, doesn't BMW have the reputation for high maintenance and repair costs? They would not be my first choice if buying a used vehicle.
An out of warranty BMW is a money pit unless you do the maintenance & repairs yourself or you never drive the car.
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Re: Cars -- When and Why Did You Switch from Economy/Practicality to Luxury?

Post by badger42 »

Our most recent purchase was a nicer trim of Subaru than we've bought in the past (went from base to "Premium"). However, for image reasons, we stayed away from Tesla / BMW / etc. The Premium trim feels plenty luxurious, and the non-turbo engine + safety features mean insurance is dirt cheap.
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Re: Cars -- When and Why Did You Switch from Economy/Practicality to Luxury?

Post by smitcat »

"So when and why did you change from economy to luxury? And in retrospect, do you have any regrets?"
We have rotated between economy, luxury, sport and trucks back and forth a number of times now.
Never really gave it a thought and certainly no regrets.
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Re: Cars -- When and Why Did You Switch from Economy/Practicality to Luxury?

Post by anoop »

badger42 wrote: Wed May 19, 2021 8:28 am However, for image reasons, we stayed away from Tesla / BMW / etc.
What is the image problem with Tesla?
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Re: Cars -- When and Why Did You Switch from Economy/Practicality to Luxury?

Post by desiderium »

I had a Camry once and was happy with it while I owned it
Now I drive a 3 series BMW. As noted, it is not a luxury vehicle.
My Camry consumed oil; my BMW has had a few minor issues.
I would never consider going back to a Camry.
Take a test drive and see what you think.
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Re: Cars -- When and Why Did You Switch from Economy/Practicality to Luxury?

Post by badger42 »

anoop wrote: Wed May 19, 2021 8:33 am
badger42 wrote: Wed May 19, 2021 8:28 am However, for image reasons, we stayed away from Tesla / BMW / etc.
What is the image problem with Tesla?
Similar to the BMW/Mercedes image, crossed with a Prius? Too distinctive, doesn't blend in well.
protagonist
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Re: Cars -- When and Why Did You Switch from Economy/Practicality to Luxury?

Post by protagonist »

um....in 1980 when I bought a new Datsun 210 after never paying more than $500 for a car previously? That was a big deal for me.

My last auto purchase was in 2017- a 2017 Hyundai Elantra, which is probably the contemporary equivalent of a Datsun 210 in 1980.

It's not that I am particularly cheap, or that I can't afford more. I just never cared that much about cars, and the Elantra has proven to be reliable- I do like reliability and all the geeky stuff about it (my favorite is adaptive cruise control...that rocks!)

My tenor saxophone is worth more than my car. If you think that is odd, it is simply because I care more about saxophones than cars. If I had to do without one or the other, the car would definitely be the one to go. Chacun a son gout.

The point being...the implication of the title of this thread is that people with enough money eventually buy luxury cars. I didn't (yet), nor do I think I will in the foreseeable future, and most of my contemporaries haven't either, whether or not they could afford to. It's not a given.

Also, somebody mentioned image..... I would actually feel a bit awkward driving a luxury car in my community. Where I live it is very difficult to tell who has money and who does not, and most residents (me included) want to keep it that way.
Last edited by protagonist on Wed May 19, 2021 11:40 am, edited 3 times in total.
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Re: Cars -- When and Why Did You Switch from Economy/Practicality to Luxury?

Post by 59Gibson »

fortunefavored wrote: Wed May 19, 2021 8:19 am The reverse.. I bought my expensive fancy cars in my 20s and early 30s. "You can have anything you want, just not everything you want."

Now I drive 5+ year old used cars.

Even a modern Toyota Camry is more luxurious and nicer than a "luxury" car from 10 years ago.
This is true. I recently watched an old review on youtube of an Acura NSX($70k sticker back then!) from the early/mid 90s, granted this is longer than 10 years ago, but the amazing thing is today's Accord 2.0t is just as fast 0-60 as a NSX from 90s!
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Re: Cars -- When and Why Did You Switch from Economy/Practicality to Luxury?

Post by Mr.Chlorine »

I lucked into the entry level luxury during my final year of undergrad. A well off family member got low-balled on a trade in for their 2012 Lincoln MKZ. They had a history with the dealer of buying a new car every few years and trading the previous one in, so I assume the salesman got too greedy and thought they could get the trade in for basically free. The MKZ was 4 years old with maybe 40k miles and they offered 25% of what he paid just 3 years prior. Frustrated but wanting a quick sale, the family member offered me the same price, plus sales tax, which I jumped at.

Fast forward to today, the MKZ that I drove for almost 5 years was declared a total loss after an accident (everyone is fine, their insurance gave me a fair value) but I am car shopping again. Long story short, I had been looking for a new vehicle for awhile so the accident is not the worst thing ever, just accelerates my timeline. Almost went with a Tacoma last year, but could not shake the feeling that I was downgrading. Once you get a into anything borderline luxury, it is difficult to ever go back to economy/practicality.
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Re: Cars -- When and Why Did You Switch from Economy/Practicality to Luxury?

Post by anoop »

badger42 wrote: Wed May 19, 2021 8:37 am
anoop wrote: Wed May 19, 2021 8:33 am
badger42 wrote: Wed May 19, 2021 8:28 am However, for image reasons, we stayed away from Tesla / BMW / etc.
What is the image problem with Tesla?
Similar to the BMW/Mercedes image, crossed with a Prius? Too distinctive, doesn't blend in well.
So you would be OK with a Mach E? Or does it cross all EVs off the list?
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Re: Cars -- When and Why Did You Switch from Economy/Practicality to Luxury?

Post by CoastLawyer2030 »

protagonist wrote: Wed May 19, 2021 8:40 am The point being...the implication of the title of this thread is that people with enough money eventually buy luxury cars. I didn't (yet), nor do I think I will in the foreseeable future, and most of my contemporaries haven't either, whether or not they could afford to. It's not a given.
That is not what I meant to imply at all.

What I am getting at is that I assume a lot of Bogleheads are beaten over the head with "Buy a Honda or Toyota," yet as I read the forums, it's plenty obvious to me that there are a lot of luxury car owners on here.

I'm just curious when and why people made that switch; not necessarily that such a switch was inevitable.
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Re: Cars -- When and Why Did You Switch from Economy/Practicality to Luxury?

Post by midlifesaver123 »

I have no love for cars and view them as a basic appliance. I drive cars 10+ years so when I went looking for a car last year reliability and long term cost to own was important. I was pretty certain I would get a Camry or Accord but after doing a lot of research the Camry mid level new was within $1,000 of a CPO Lexus ES and the Accord CVT engine was something I wanted to stay away from. So the upgraded Accord engine/model was actually $4,000 - 5,000 more expensive than the CPO Lexus.

I got the 3 year old Lexus with under 10,000 miles on it, clearly an old guy in the villages had leased it because the back seats looked like they had never been used. So I guess I "switched" to luxury but it was actually a practical luxury (which I would say Lexus as an overall brand is outside of the LS and supercars). If you are going to BMW or Mercedes out of warranty it will be very expensive and while fun to drive I certainly wouldn't want to spend my money there- we have similar incomes.

If a $1,000 trip to the dealership to get the car fixed feels like a nothing to you then go for it. If that would feel bad or frustrate you then head back to economy or practical luxury.
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Re: Cars -- When and Why Did You Switch from Economy/Practicality to Luxury?

Post by Living Free »

I agree with the above posters re concern about cost of repairs/maintenance. That is the reason that used German luxury cars and land rovers are so cheap. You don't know true suffering until you've had to pay for maintenance and repairs for a high mileage out of warranty German luxury car.
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Re: Cars -- When and Why Did You Switch from Economy/Practicality to Luxury?

Post by bgf »

I'm going to make the switch at some point this year when used car prices come back down to earth. Going to sell/trade my low mileage 2012 Camry for a slightly used Lexus ES, probably the hybrid. My priorities are quiet, comfortable, reliable. I don't care if its fast or how it handles. I don't care so much about how it looks. I think the ES hits my priorities well.

We can cashflow a 36 month loan easily, and its value is a small percentage of our net worth. I still dont want to burn money, but i think the Lexus will hold its value reasonably well and wont be insanely expensive to maintain/repair.

My wife's Outback will be paid off, so it'll still only be one car payment.

honestly, this IS probably a form of lifestyle creep, as id be probably similarly happy in another camry/avalon, but i figure i should start learning how to spend some extra money at some point. I'm 35, and given our portfolio size, we are more likely to be 60 year old retired misers than not have enough to live off. as a lawyer and a teacher, we're unlikely to be 'pushed out' of our careers due to age.
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Re: Cars -- When and Why Did You Switch from Economy/Practicality to Luxury?

Post by sk2101 »

There is a reason why used BMWs are cheap. I don't recommend you go that route, if you want a used "lux" vehicle, get a Lexus.
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Re: Cars -- When and Why Did You Switch from Economy/Practicality to Luxury?

Post by CoastLawyer2030 »

bgf wrote: Wed May 19, 2021 8:52 am honestly, this IS probably a form of lifestyle creep, as id be probably similarly happy in another camry/avalon, but i figure i should start learning how to spend some extra money at some point. I'm 35, and given our portfolio size, we are more likely to be 60 year old retired misers than not have enough to live off. as a lawyer and a teacher, we're unlikely to be 'pushed out' of our careers due to age.
So this right here is what I'm getting at with my OP. I've always considered myself a pretty frugal guy. My wife and I shop at Aldi's; we cancel cable when it's not football season; she drives a paid off Toyota Rav-4 and I drive a paid off Toyota Camry; we are very mindful of our budget.

Just considering a BMW gives me the same "this is lifestyle creep happening in real time" feeling. I'm just curious how others have handled it.
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Re: Cars -- When and Why Did You Switch from Economy/Practicality to Luxury?

Post by runner3081 »

Switched to BMW in my late 20s and early 30s. Love cars, but they are a waste of money. Went back to practicality in my late 30s and have remained there and don’t plan to change that.
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Re: Cars -- When and Why Did You Switch from Economy/Practicality to Luxury?

Post by drewlaws »

fortunefavored wrote: Wed May 19, 2021 8:19 am The reverse.. I bought my expensive fancy cars in my 20s and early 30s. "You can have anything you want, just not everything you want."

Now I drive 5+ year old used cars.

Even a modern Toyota Camry is more luxurious and nicer than a "luxury" car from 10 years ago.
I'm the exact same way. The more I make, the cheaper I get. I had several fun cars in my 20s and drive an Accord now. Hope to get back into something fun down the road.

To the OP- Sounds like the upfront costs are the same. BMW will probably cost more in maintenance over time but not extravagantly so. Unless you are on a tight budget, I'd say get what you want.

For what it's worth, I had a 3 series before my Honda and it was actually more reliable out of warranty than under warranty. I had it for five years and only sold it because my wife can't drive a stick and it was becoming a hassle when we had our kid. Just keep up with the recommended maintenance.
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Re: Cars -- When and Why Did You Switch from Economy/Practicality to Luxury?

Post by hand »

I moved up when 1) I had a stable career with predicable earnings that were strong enough, 2) more important financial priorities were taken care of (house, retirement savings in good shape for age), and 3) existing practical car was no longer fit for purpose (I had extracted full value out the existing car).

I do not have any regrets, and perhaps a slight wish I had upgraded earlier; I was sure glad my family was in the safe luxury SUV when they were rear-ended, and would have felt terrible if that had happened a year earlier when we were pinching pennies by wringing the last value out of the econobox.

Beware the hidden costs - the house cleaners asked for a raise shortly after we brought home a fancier car :(
Also beware the increased maintenance and repairs depending on brand - cost can be managed, but to me the hassle of additional trips to the mechanic are the absolute opposite of luxury.
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Re: Cars -- When and Why Did You Switch from Economy/Practicality to Luxury?

Post by HyperCat »

fortunefavored wrote: Wed May 19, 2021 8:19 am The reverse.. I bought my expensive fancy cars in my 20s and early 30s. "You can have anything you want, just not everything you want."

Now I drive 5+ year old used cars.

Even a modern Toyota Camry is more luxurious and nicer than a "luxury" car from 10 years ago.
+1. If you feel like you're missing out on something big in life and you can afford it, there's nothing wrong with splurging and giving it a try. The worst outcome is you scratch that itch, learn an expensive lesson, and say you're never doing it again. Personally, I tried it early, found I had no lasting desire to own luxury/performance cars (even as a car person), and went back down the ladder.
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Re: Cars -- When and Why Did You Switch from Economy/Practicality to Luxury?

Post by stilltrying »

I switched last year from minivans and Accords when I bought DW an MDX. She loves it and doesn’t miss the minivan at all. I do miss minivan utility, but not enough to get one for myself :D .
And just this week, I bought my first luxury car, a CPO Lexus LS. We will see if I live to regret the decision, but I wanted a quiet smooth ride with power. I can’t wait to take it on a couple hundred mile trip!
I have rationalized the choice by doing the math on our savings; we can afford it.
Cheers!
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Re: Cars -- When and Why Did You Switch from Economy/Practicality to Luxury?

Post by H-Town »

CoastLawyer2030 wrote: Wed May 19, 2021 7:57 am So I started a different car buying thread, but wanted to have a broader discussion about cars in general.

I am a subscriber to Millionaire Next Door and would definitely categorize myself as one of those people who has opted for economy cars and "silent wealth." In almost 20 years of driving, my three cars include a Ford Focus, a Honda CR-V, and now a Toyota Camry.

But as I'm looking for a newer car right now, it's dawned on me that used luxury cars are about in the same ballpark as the nicer used economy cars. In fact, used Toyota Camry's with the SE trim (not even the nicest XLE) are going for more than used BMW 3 series with the same mileage.

My Millionaire Next Door brain is ringing off a bunch of sirens -- "Lifestyle inflation!" "People will think you're rich!"

But honestly I'm at the point where I guess I just don't really care. My wife and I make about $160-170k a year and spend about $65-75k. I am having a great year this year and we might hit $200k. Buying a used BMW 3 series would not really do anything in the big picture.

I guess the point of this thread is that I feel like I am going through the shift from economy car to luxury car mindset in real time. From my searching of posts on here, many Bogleheads have gone through the same change.

So when and why did you change from economy to luxury? And in retrospect, do you have any regrets?
In my view, a luxury car (or a bigger house than I need) slows me down from achieving my FI goal.

If you don't have a luxury car, I don't think you would miss it. But once you get the experience of a luxury car, you more likely than not will want the same experience again. Luxury car will get old in a few years and you will somehow convince yourself to buy a new car 3 years later. Car industry has done a good job with creating excitement with a new model every year. So if you're kind to yourself, don't dip your toes in luxury car, luxury house, luxury traveling, etc. until you are FI.

Why FI? You may ask why you have to wait until FI to buy a luxury car while you're making 200k?

Well, look around you and what do you see? I see average American have to rely on their paycheck to pay bills and fund their lifestyles. A luxury car may give them a spike in happiness for the first 6 months, but then they have to keep their job, regardless of whether they're happy or not, to pay off the car in 5-7 years later. God forbid if there are a scratch, ding, or something happens to their new car.

Now, think about when you're FI, and your portfolio can generate passive income to buy a luxury car. Then you can have your cake, and eat it too! You have the freedom to do what you want to do, without relying on regular paychecks. You can enjoy your luxury car, without worrying about car payments every month.

That delayed gratification will help you get to your FI goal faster. We achieved our FI goal (50x) in mid-30s. Now that we are not rely on our paychecks anymore, we have the freedom to do pretty much anything. We're looking at a new Genesis GV80. We bought a condo in a beach town we like. We're looking to buy a cabin in Pacific Northwest mountains in the next few years. We travel more. We take time off more, and we don't care about climbing the corporate ladder or office politics any longer. The discipline in our 20's paid off big time for us.
Time is the ultimate currency.
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Re: Cars -- When and Why Did You Switch from Economy/Practicality to Luxury?

Post by quantAndHold »

I got a new Audi A4 in my early 30’s, when I started making enough money that I could just pay cash. Sold it and got a Mazda3 when the warranty on the A4 was about to expire. The Audi was constantly in the shop. I’ve had the Mazda ever since. Much nicer car, in nearly every way, despite being half the price. Turns out we didn’t really care about all the fancy features. The only things I miss from the Audi are the automatic climate control and the leather seats. We’re on the verge of needing to replace the Mazda. The new car will probably be another Japanese hatchback, but this time with leather seats, to fight the dog hair better. We reached FI awhile ago, so we can get what we want, but we’re not trying to impress anyone, and the Japanese hatchbacks are just more practical for how we live.
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Re: Cars -- When and Why Did You Switch from Economy/Practicality to Luxury?

Post by cheese_breath »

I've always bought my cars new but always bought practical. Closest thing I ever came to luxury was an '89 Pontiac station wagon with wire wheels and some additional options that I bought off the dealer's lot. And the only reason I bought that was because my old wagon gave up the ghost, and I needed a new one with a trailering package ASAP to pull my boat.
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Re: Cars -- When and Why Did You Switch from Economy/Practicality to Luxury?

Post by badger42 »

anoop wrote: Wed May 19, 2021 8:40 am
badger42 wrote: Wed May 19, 2021 8:37 am
anoop wrote: Wed May 19, 2021 8:33 am
badger42 wrote: Wed May 19, 2021 8:28 am However, for image reasons, we stayed away from Tesla / BMW / etc.
What is the image problem with Tesla?
Similar to the BMW/Mercedes image, crossed with a Prius? Too distinctive, doesn't blend in well.
So you would be OK with a Mach E? Or does it cross all EVs off the list?
Definitely not all EVs - the Mach-E would probably be fine (from an image POV, not so sure about reliability). The Toyota bZ4X (or Subaru Solterra) look pretty promising - I'd totally buy an E-Toyota if I was in the market and it met the needs (tall driver, short driver, cargo, range, etc).

EDIT: Insurance costs are also a factor. I actually ran numbers with my agent - a the additional insurance costs of a Model 3 (over an outback) would cancel out the fuel cost savings for us.
Last edited by badger42 on Wed May 19, 2021 9:44 am, edited 1 time in total.
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Re: Cars -- When and Why Did You Switch from Economy/Practicality to Luxury?

Post by mmmodem »

I bought an Acura in my 20's and got it out of my system. I regretted it and went back to driving economy cars. The reasons are:

1. Had to use expensive premium gas
2. Constantly worried about door dings in the parking lot
3. More expensive tires and maintenance
4. It had a more sporty handling which meant it drove nicer than my old corolla but it was harsher and less comfortable on long road trips.
5. Speaking of long car trips, it chugged gas and I could only go 250 miles before fill up whereas the Corolla went 400 miles on less fuel.
6. Absolutely no one cared that I drove a nicer vehicle except for my insurance company charging me a higher premium.

OP, if you think about it, you did experience lifestyle creep. You went from a compact economy car to a small SUV to a midsize family sedan. Ask yourself whether you regret not buying another Focus or whether you don't care?

A side note: We own a Mitsubishi Outlander SUV with 7 seats as our family vehicle. I borrowed a family member's Acura MDX SUV also with 7 seats for a small day trip. It was a great back to back comparison. The Acura was a better vehicle in every regard. But while cruising on the highway, I couldn't shake the feeling that if I had purchased this vehicle at $10's of thousands more, I would regret it. It simply wasn't worth it to go from A to B. I think I would enjoy lifestyle creep more in the form of an OLED television, a bay window upgrade, or a new computer every year.
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Re: Cars -- When and Why Did You Switch from Economy/Practicality to Luxury?

Post by tim1999 »

I've always driven luxury-type cars since I began full-time employment after college many years ago. I usually buy 1-3 year old low mileage examples that fall under manufacturer-backed CPO warranty programs, sometimes extend the coverage if manufacturer-backed, and sell them when all warranty expires. I have zero regrets. I've leased a new car a few times when I've found an unusually rare bargain on a lease rate but I haven't seen anything like this in the last 3-4 years.
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Re: Cars -- When and Why Did You Switch from Economy/Practicality to Luxury?

Post by Jags4186 »

Regarding used BMW 3-Series, keep in mind an all new body style just came out. Every time a new body style comes out the old body style drops like a rock in price. Part of that, IMO, is that the allure of a BMW is showing off your new ride. If you have an old body style, that allure goes away and what your left with is a pretty regular car when compared to a decked out Accord or Camry. If I look on Autotrader near me, a 2018 BMW 330i (old body style) with 25k miles is near $11,000 cheaper than a 2019 BMW 330i (new body style) with 25k miles.

I always find it funny when people talk about how great BMWs handle and everything…well sure if you went on a track you could outperform a similarly equipped Accord. But no one takes an Accord to the limit on the street, so no one is taking a BMW to the limit on the street. In fact, the fun part of driving is taking cars to the limit, and in that aspect a “high performance” vehicle isn’t anything to be thrilled about on the street.
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Re: Cars -- When and Why Did You Switch from Economy/Practicality to Luxury?

Post by bogledogle »

CoastLawyer2030 wrote: Wed May 19, 2021 7:57 am So when and why did you change from economy to luxury? And in retrospect, do you have any regrets?
I switched as soon as I could afford to, because I think cars are the best ROI to me personally on any splurges. It's like flying business/first class, but you get way more use out of a nice car than an expensive air ticket.

Is it lifestyle inflation? Sure. But, whats the point of life if you don't live a little when you can afford to.
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Re: Cars -- When and Why Did You Switch from Economy/Practicality to Luxury?

Post by delamer »

Buying a used BMW 3 series would not really do anything in the big picture.
That was our trigger too. When we were hitting all our financial goals and realized that an extra $10,000 spread over 5 years (plus premium gas and more expensive repairs) wouldn’t adversely impact us. We’ve always bought used (with one exception) and frequently CPO.

Since leasing is so common with luxury brands, it’s pretty easy to find low-mileage, well-maintained vehicles that are 2 to 4 years old. (At least in normal inventory times).

We were mid-40’s when we bought our first luxury vehicle. No regrets.
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Re: Cars -- When and Why Did You Switch from Economy/Practicality to Luxury?

Post by lthenderson »

We started upgrading our Toyotas from LE models to XLE or Limited models if that counts as going from economy to luxury. Mostly we did it for desired features that aren't used very often but we could now afford as our assets grew. Things like memory, heated and leather covered seats that weren't available (at least the last time we bought one) on the base models. Like others above, vehicles are utilitarian for us since we spend so little of our day in them and around here, repairing foreign luxury cars is very expensive and time consuming, so we have no desire to upgrade further.
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Re: Cars -- When and Why Did You Switch from Economy/Practicality to Luxury?

Post by snackdog »

We have learned our lessons with Mercedes and BMW. Too complex and very unreliable. Used Lexus for us now and forever. Utterly smooth, strong, reliable, and ergonomic. A joy to be in. Peace and serenity plus 300 hp. Good for 200,000 miles.
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Re: Cars -- When and Why Did You Switch from Economy/Practicality to Luxury?

Post by bottlecap »

Most vehicles nowadays are "nice enough." I derive neither comfort, status, nor self-worth from additional luxury. So I will never switch and pay for it.

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Re: Cars -- When and Why Did You Switch from Economy/Practicality to Luxury?

Post by MMiroir »

I travel for business quite a bit, and probably rent between 20 to 30 vehicles per year on these trips. These are typically mainstream cars like Fords, Chevys, Kias, Hyundai, Dodge/Chryslers, Nissans as well as the Subarus and Toyotas that the BH forum would champion. For the most part, while practical and reliable, they are dull and boring vehicles that I am happy to return at the end of the day. In all of my travels, I have rarely liked any of the rental cars, and we switched to a non-economy car pretty soon after we could afford to as the difference in price between a mainstream sedan and an entry-level upscale model isn't that much when amortized over a ten+ year hold.

The OP needs to clarify what "luxury" means, as I would not consider a 3 series a "luxury" car. A 7 or 8 series is a luxury car, a 3 series is not.
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Re: Cars -- When and Why Did You Switch from Economy/Practicality to Luxury?

Post by CoastLawyer2030 »

H-Town wrote: Wed May 19, 2021 9:32 amIn my view, a luxury car (or a bigger house than I need) slows me down from achieving my FI goal.

If you don't have a luxury car, I don't think you would miss it. But once you get the experience of a luxury car, you more likely than not will want the same experience again. Luxury car will get old in a few years and you will somehow convince yourself to buy a new car 3 years later. Car industry has done a good job with creating excitement with a new model every year. So if you're kind to yourself, don't dip your toes in luxury car, luxury house, luxury traveling, etc. until you are FI.

Why FI? You may ask why you have to wait until FI to buy a luxury car while you're making 200k?

Well, look around you and what do you see? I see average American have to rely on their paycheck to pay bills and fund their lifestyles. A luxury car may give them a spike in happiness for the first 6 months, but then they have to keep their job, regardless of whether they're happy or not, to pay off the car in 5-7 years later. God forbid if there are a scratch, ding, or something happens to their new car.

Now, think about when you're FI, and your portfolio can generate passive income to buy a luxury car. Then you can have your cake, and eat it too! You have the freedom to do what you want to do, without relying on regular paychecks. You can enjoy your luxury car, without worrying about car payments every month.

That delayed gratification will help you get to your FI goal faster. We achieved our FI goal (50x) in mid-30s. Now that we are not rely on our paychecks anymore, we have the freedom to do pretty much anything. We're looking at a new Genesis GV80. We bought a condo in a beach town we like. We're looking to buy a cabin in Pacific Northwest mountains in the next few years. We travel more. We take time off more, and we don't care about climbing the corporate ladder or office politics any longer. The discipline in our 20's paid off big time for us.
I've been thinking about this post a lot throughout the day. Your mindset is generally how I've lived for my entire adult life. "Wait till this, wait till that."

But I just run the math and something like a used luxury vehicle -- including its increased costs and repairs -- is just a nothing-burger in the overall scheme of things.
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Re: Cars -- When and Why Did You Switch from Economy/Practicality to Luxury?

Post by FrugalInvestor »

Once my career was secure and we were financially set. In other words, the purchase had a negligible impact on our current and future finances. We paid cash.

I liked that car but also quickly learned the downsides of true luxury vehicles including poor reliability and very high maintenance costs. I don't mind paying up for a very nice vehicle but I don't like overpaying for everything related to it as long as I own it. For that reason, since that purchase we've stepped down to what I would term 'near luxury' or 'affordable luxury' models. We bought a 2004 Lexus RX400 after retirement that we loved and now have a Mazda CX-9. Both have been excellent values, very reliable and affordable in terms of operating and maintenance costs while providing a high level of comfort and functionality. This is where the most greatest bang for my buck is but my primary purpose for buying a nice car is for my comfort and enjoyment, not image.

I have adopted some 'tricks' to reduce maintenance costs like doing some of my own and using Toyota dealers to service the Lexus (except for warranty issues which were nearly non-existent). I found that the exact same service performed by a Toyota dealer was about one-half the cost. I was willing to give up the pampering in the waiting area for the savings.
Last edited by FrugalInvestor on Wed May 19, 2021 11:03 am, edited 4 times in total.
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Re: Cars -- When and Why Did You Switch from Economy/Practicality to Luxury?

Post by CoastLawyer2030 »

MMiroir wrote: Wed May 19, 2021 10:38 amThe OP needs to clarify what "luxury" means, as I would not consider a 3 series a "luxury" car. A 7 or 8 series is a luxury car, a 3 series is not.
When your past three cars are the base model Ford Focus, Honda CR-V, and Toyota Camry, yes, a BMW 3 series is a luxury.
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Re: Cars -- When and Why Did You Switch from Economy/Practicality to Luxury?

Post by Nivek »

Through my 24 year career and through multiple promotions, I had a Saturn for 10 years, then a Honda Accord for 10 years. At one point, I was driving a lot one way and we decided to get CRV for better vision/safety, drive it for 4 years then give it to our oldest as her first car (that way we knew the history of the car). Once I hit our retirement number, I finally splurged on our first luxury car (Mercedes GLE 350). My wife has driven two Honda Odysseys for 22 years and we bought another CRV, this one to go to our youngest in a year (after around 3 years of my wife driving). She's getting a Tesla or Mach E (maybe something else but 100% wants an EV).

So for us, it was let's get set for retirement and when we can retire, splurge if we want to. I wanted to have a luxury car at least once in my life but have always been very practical with cars. We hit our number so it was time.
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Re: Cars -- When and Why Did You Switch from Economy/Practicality to Luxury?

Post by HenryG »

delamer wrote: Wed May 19, 2021 10:13 am
Buying a used BMW 3 series would not really do anything in the big picture.
That was our trigger too. When we were hitting all our financial goals and realized that an extra $10,000 spread over 5 years (plus premium gas and more expensive repairs) wouldn’t adversely impact us. We’ve always bought used (with one exception) and frequently CPO.

Since leasing is so common with luxury brands, it’s pretty easy to find low-mileage, well-maintained vehicles that are 2 to 4 years old. (At least in normal inventory times).

We were mid-40’s when we bought our first luxury vehicle. No regrets.
Similar experience here. Hitting/exceeding financial goals, and I've always bought less than I could afford. Replaced a 12 y/o Volvo with a CPO Audi in 2019.
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Re: Cars -- When and Why Did You Switch from Economy/Practicality to Luxury?

Post by J295 »

Early retired 2013, and bought new Lexus GX 460 in 2016. During the early kid years we had a minivan, followed by sedans that were driven up to 100,000+
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Re: Cars -- When and Why Did You Switch from Economy/Practicality to Luxury?

Post by caffeperfavore »

drewlaws wrote: Wed May 19, 2021 9:13 am
fortunefavored wrote: Wed May 19, 2021 8:19 am The reverse.. I bought my expensive fancy cars in my 20s and early 30s. "You can have anything you want, just not everything you want."

Now I drive 5+ year old used cars....
I'm the exact same way. The more I make, the cheaper I get. I had several fun cars in my 20s and drive an Accord now. ...
Same here. My interest in "nice" cars has decreased with my ability to pay for them. Maybe I'm showing my age but the higher trim lines of most carmakers seem pretty luxurious to me anymore, so I don't feel like I'm missing out on anything.

I went from an Audi to a Toyota and love it because I do not care what happens to it. I'm also a better driver. I drove the Audi way too fast. It just seemed to happen.

Maybe lease something a few years and get it out of your system?
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Re: Cars -- When and Why Did You Switch from Economy/Practicality to Luxury?

Post by David Jay »

CoastLawyer2030 wrote: Wed May 19, 2021 10:41 amWhen your past three cars are the base model Ford Focus, Honda CR-V, and Toyota Camry, yes, a BMW 3 series is a luxury.
I don’t understand why you are so set on buying a maintenance hog...

Maybe a Lexus. Acura is nice too.
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