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

Questions on how we spend our money and our time - consumer goods and services, home and vehicle, leisure and recreational activities
FireSekr
Posts: 1388
Joined: Tue Apr 02, 2013 9:54 am

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

Post by FireSekr »

bubbadog wrote: Wed May 19, 2021 4:47 pm
Afty wrote: Wed May 19, 2021 2:32 pm I did the classic thing of buying an entry lux car immediately after finishing grad school. What I did right was that I bought a 3-year old off lease one with a great track record for reliability (an Infiniti G35). I kept if for 8 years and replaced it with a Tesla Model 3. I don’t think buying something cheaper would have made any meaningful difference in our finances.

I do wish I had considered resale value more seriously. My Infiniti depreciated pretty badly, so I might have been better off had I bought a BMW or Audi instead even at a higher initial purchase price.
I suspect the BMW or Audi would have depreciated even more.
2 out of the 3 BMWs I currently own have gone up in value since I’ve bought them, and maintenance has not been the nightmare that others here claim.

The key with BMW is that you get them cheap used because they have a reputation for “poor reliability”. Well the truth is that some of their models/engines have extremely poor reliability (v8, turbo 4) but other models/engines have way above average reliability (inline 6 except the n54)

Because many people just hear the horror stories, the resale value of all BMWs is poor, including the good ones which don’t deserve to be.

Take advantage of this, get one of the better models for reliability at bargain basement prices and you’ll drive a more fun, more comfortable, and nearly as reliable car vs a Camry or accord.

My 23 year old e36 M3, e90 328x-drive, and 20 year old e46 330xi have been nearly bulletproof and the few repairs I’ve had have been cheap. My 20 year old M5 has been more needy than the others and more expensive to repair, but it’s also the best all around car out of all of them and has increased in value since I bought it to the point where it’s covered the money I put into repairs.
lws
Posts: 831
Joined: Tue Apr 25, 2017 6:12 pm

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

Post by lws »

Switched from 2014 used Camry to new 2017 RX 350 in 2016.
I am in SoCal so nobody is going to be impressed by an RX 350.
This thing is build like a brick.
wander
Posts: 4424
Joined: Sat Oct 04, 2008 9:10 am

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

Post by wander »

CoastLawyer2030 wrote: Wed May 19, 2021 10:41 am
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.
BMW 3 is an upgrade, not a luxury. Luxury is when you can afford top of the line model of luxury brands.
Wannaretireearly
Posts: 4881
Joined: Wed Mar 31, 2010 4:39 pm

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

Post by Wannaretireearly »

CoastLawyer2030 wrote: Wed May 19, 2021 8:43 am
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.
Does switching from toyota/Honda to hyundai Count 😉.
We got a Palisade for 40k and feel spoiled like a 70k suv. Check it out. I hate paying for high maintenance. That's my bottom line. I'll gladly pay 50 to 60k upfront for a cybertruck, assuming maintenance is gonna be low cost! 😀
“At some point you are trading time you will never get back for money you will never spend.“ | “How do you want to spend the best remaining year of your life?“
investingdad
Posts: 2139
Joined: Fri Mar 15, 2013 10:41 pm

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

Post by investingdad »

My version of luxury is the top of the line Nissan Maxima. I know that it isn’t but it’s as close as I’ll get. Comfortable, leather, gadgets, moves pretty good.

Our total compensation is now over 400k, but we are not pricey car people.
ncbill
Posts: 2053
Joined: Sun Jul 06, 2008 4:03 pm
Location: Western NC

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

Post by ncbill »

CoastLawyer2030 wrote: Wed May 19, 2021 3:10 pm
vitaflo wrote: Wed May 19, 2021 2:07 pm
anoop wrote: Wed May 19, 2021 8:16 am
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.
I would agree with this. The last time I got into a 3-series it looked like any of the other econo-boxes you can buy from American companies. Make sure when you say "luxury" you're comparing apples to apples.
Update -- went to the local Bimmer dealership (very good friend's dad works there). The 2017 330s are just really nice economy cars with a much, much, much better engine. The interior feels like a high-end Honda but the motor is like driving a completely different machine.

The 2019-2021 330s makes the newer Accords and Camrys seem laughable. Night and day difference.

I think I've settled in on doing the repairs to my Camry and driving it for a few more years. But I am very open and strongly leaning towards a luxury car once I leave my government gig here in a few years.
If you still want the BMW then, just lease it.

Hire a broker to save a few bucks & the hassle of negotiating yourself:

https://forum.leasehackr.com

Plenty of retired people choose to convert transportation costs to a line item in their monthly expenses by leasing.

It's not the cheapest way to enjoy a new vehicle but it avoids any surprise out-of-warranty, multi-thousand dollar lumpy repair expenses.
Topic Author
CoastLawyer2030
Posts: 989
Joined: Wed Dec 30, 2020 7:44 am
Location: The Buckeye State

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

Post by CoastLawyer2030 »

FireSekr wrote: Wed May 19, 2021 11:08 pm
bubbadog wrote: Wed May 19, 2021 4:47 pm
Afty wrote: Wed May 19, 2021 2:32 pm I did the classic thing of buying an entry lux car immediately after finishing grad school. What I did right was that I bought a 3-year old off lease one with a great track record for reliability (an Infiniti G35). I kept if for 8 years and replaced it with a Tesla Model 3. I don’t think buying something cheaper would have made any meaningful difference in our finances.

I do wish I had considered resale value more seriously. My Infiniti depreciated pretty badly, so I might have been better off had I bought a BMW or Audi instead even at a higher initial purchase price.
I suspect the BMW or Audi would have depreciated even more.
2 out of the 3 BMWs I currently own have gone up in value since I’ve bought them, and maintenance has not been the nightmare that others here claim.

The key with BMW is that you get them cheap used because they have a reputation for “poor reliability”. Well the truth is that some of their models/engines have extremely poor reliability (v8, turbo 4) but other models/engines have way above average reliability (inline 6 except the n54)

Because many people just hear the horror stories, the resale value of all BMWs is poor, including the good ones which don’t deserve to be.

Take advantage of this, get one of the better models for reliability at bargain basement prices and you’ll drive a more fun, more comfortable, and nearly as reliable car vs a Camry or accord.

My 23 year old e36 M3, e90 328x-drive, and 20 year old e46 330xi have been nearly bulletproof and the few repairs I’ve had have been cheap. My 20 year old M5 has been more needy than the others and more expensive to repair, but it’s also the best all around car out of all of them and has increased in value since I bought it to the point where it’s covered the money I put into repairs.
So you are hitting the head on something I've read about Bimmers -- don't get caught up in the model number, pick the engine. Is the twin turbo in the 330s a reliable engine?
bgf
Posts: 2085
Joined: Fri Nov 10, 2017 8:35 am

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

Post by bgf »

CoastLawyer2030 wrote: Thu May 20, 2021 6:40 am
FireSekr wrote: Wed May 19, 2021 11:08 pm
bubbadog wrote: Wed May 19, 2021 4:47 pm
Afty wrote: Wed May 19, 2021 2:32 pm I did the classic thing of buying an entry lux car immediately after finishing grad school. What I did right was that I bought a 3-year old off lease one with a great track record for reliability (an Infiniti G35). I kept if for 8 years and replaced it with a Tesla Model 3. I don’t think buying something cheaper would have made any meaningful difference in our finances.

I do wish I had considered resale value more seriously. My Infiniti depreciated pretty badly, so I might have been better off had I bought a BMW or Audi instead even at a higher initial purchase price.
I suspect the BMW or Audi would have depreciated even more.
2 out of the 3 BMWs I currently own have gone up in value since I’ve bought them, and maintenance has not been the nightmare that others here claim.

The key with BMW is that you get them cheap used because they have a reputation for “poor reliability”. Well the truth is that some of their models/engines have extremely poor reliability (v8, turbo 4) but other models/engines have way above average reliability (inline 6 except the n54)

Because many people just hear the horror stories, the resale value of all BMWs is poor, including the good ones which don’t deserve to be.

Take advantage of this, get one of the better models for reliability at bargain basement prices and you’ll drive a more fun, more comfortable, and nearly as reliable car vs a Camry or accord.

My 23 year old e36 M3, e90 328x-drive, and 20 year old e46 330xi have been nearly bulletproof and the few repairs I’ve had have been cheap. My 20 year old M5 has been more needy than the others and more expensive to repair, but it’s also the best all around car out of all of them and has increased in value since I bought it to the point where it’s covered the money I put into repairs.
So you are hitting the head on something I've read about Bimmers -- don't get caught up in the model number, pick the engine. Is the twin turbo in the 330s a reliable engine?
no expert, but generally speaking turbocharged/supercharged engines are going to be less reliable. ive heard the new volvo engines that are both supercharged AND turbocharged are an absolute nightmare.

a lot of these issues i think can be 'solved' simply by making sure you have a good warranty on the vehicle. there's nothing wrong with driving these modern supercomplex luxury vehicles if the dealership just gives you a nice loaner and takes care of the engine/electrical/tech problems that inevitably pop up.

i know everyone around here will say that warranties are a waste of money etc, but in this particular situation, i would consider warranty as part of the luxury car buying process. the peace of mind and service that comes with the warranty is part of it.
“TE OCCIDERE POSSUNT SED TE EDERE NON POSSUNT NEFAS EST"
OldBallCoach
Posts: 604
Joined: Mon Dec 10, 2018 4:22 pm

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

Post by OldBallCoach »

I would say I made somewhat of a switch about 25 years ago when I started driving Toyota Landcruisers. NOW they are considered high end back then they were not...LOL...but I drive them usually 250-350K before I get a new one so I am not sure how that ranks in the Boglehead plan for cars. I have bought some 'fun" play cars along the way, but honestly I have never lost a dime on any of them. My brother in law runs a very high end exotic shop and has looked out for me that way. My wife has bought some very high end cars over the years but she prefers her 4runner as her daily driver. Luxury is fine if that is what makes one happy. I make/made 7 figures for the last 20 years so I didn't have to sacrifice anything else to afford a car. To me if your family is well taken care of, you have no debt, your retirement is tight, why not. Interesting question I will say!!
User avatar
A440
Posts: 1222
Joined: Mon Sep 02, 2013 7:46 am
Location: NJ

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

Post by A440 »

protagonist wrote: Wed May 19, 2021 8:40 am 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.
This reminds me of a joke I heard back in the '80s of a business that would create names of brands for customers. A customer paid for a brand name and asked how long it would take to come up with a name. The owner of the business said, "Only a couple of days", to which the customer replied, "Dat soon?" :wink:
I don't know what the future holds, but I know who holds my future.
Jack FFR1846
Posts: 18502
Joined: Tue Dec 31, 2013 6:05 am
Location: 26 miles, 385 yards west of Copley Square

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

Post by Jack FFR1846 »

Something that's worth considering when "upgrading" to a luxury vehicle. Does the new car have huge wheels and rubber band tires? My son bought a 2020 Subaru STi (not luxury by any measure, but performance) with 19" stock wheels and rubber band tires. He's had one flat and several wheel scrapes from potholes prevalent in Rhode Island, where he works. I have driven his car, then my Crosstrek with 17" wheels and 60 series tires and going through an unseen pothole, while jarring has never caused any damage for me. Now, if you want to go extreme, my Wrangler has 295-70-17 offroading tires (34 inches tall) and potholes don't bother those tires one bit....bring em on!

I do know from co-workers that when you buy a car with rubber band tires, the dealer is always going to offer you tire and wheel insurance. I don't know what it costs, but some of my co-workers have purchased it and used more than the cost because of the pothole riddled roads in Massachusetts. Especially fun are the early spring potholes full of water that look to be an inch deep while approaching, but hit it and "BANG"....oh, 8 inches deep. Time to get out the spare (if the car even has one).
Bogle: Smart Beta is stupid
Yarlonkol12
Posts: 974
Joined: Thu Apr 11, 2019 4:28 pm

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

Post by Yarlonkol12 »

In 2011, I bought a 1999 BMW 3 series for $6,000, it’s still my primary car and has been super reliable at 22 years old. 4 Door, manual, timeless design. Aside from a few optional upgrades Ive done over the years like adding an aftermarket carplay headunit and adjustable coilovers, it’s just required standard maintance items, currently has 180k miles.

I don’t think a more recent BMW with forced induction would be nearly as reliable, but in general their inline 6 has a good reputation. Some of their cars tend to have tons of issues, while some others are fine, so its important to research what you want
My posts are for entertainment purposes only.
elle
Posts: 215
Joined: Thu Mar 13, 2014 3:13 pm

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

Post by elle »

For me it was a few factors.
1) my previous car was getting time consuming to maintain. From a career perspective, I was not okay with waking up and finding out I had to take a day off of work or having to schedule multi day maintenance. (This was pre work from home days)
2) The equivalent new version of my car that I would have been just as happy with was 8k less than the CPO luxury. I’m frugal elsewhere in life and the delta I was actually looking at was only 8k. I tend to drive cars 10+ years, so in the grand scheme of things the cost difference was unsubstantial and we could afford it out of pocket.
3) I had a 2 hour each way commute so comfort was key
4) I’m a car lover and always have been. I have a car bucket list - not specific to model but more brands I have admired. Feels good to check off a bucket list item. My next will either be a sports sedan or German car. Likely the former to help my car loving husband check an American muscle throwback car off his car bucket list. Birds of a feather.
5) I wasn’t trading anything off to do this. At the time our house was nearly paid off, no major renovations, etc.

I don’t think as some people suggest that once you go luxury you can’t go back. My car is 5 years old and with tech evolving so quickly new non luxury cars seem to have more bells and whistles than my current car does.
coalcracker
Posts: 1076
Joined: Sat Feb 04, 2012 11:25 am

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

Post by coalcracker »

We just bought a new Mercedes GLE 350 to replace a 12 year old Subaru Outback. We had been shopping for a mid-sized SUV for about a year, and found that most of the features and models we liked were within $5-10k of each other, regardless of manufacturer. The Mercedes, however, was far and away our favorite to drive and sit in.

We paid cash.

Oh, this is my wife's car. I still have a 2013 Avalon Hybrid for a while :D

ETA: Customer service at Mercedes was head and shoulders above any other dealership we visited, if that matters to you. It's not a big deal, just kinda nice.
MarkBarb
Posts: 908
Joined: Mon Aug 03, 2009 11:59 am

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

Post by MarkBarb »

When I was in my mid-40s, I bought a 3 year old CPO mid-tier luxury car. Before that, I had never owned a car with an automatic transmission, power windows, leather seats, more than 4 cylinders, or any of that fancy stuff. I did it because I felt that I could comfortably afford it and that the improvements in comfort and safety were worth the extra money. I drove it happily for another 12 years. After that, I replaced it with a new luxury SUV.

In each case, I considered the value I thought I would get for the purchase, including the total cost of ownership, and what my alternatives were for the money. When I was younger, I preferred to keep the money invested. As I got older and had less time and need for investment growth, my priorities shifted.
EnjoyIt
Posts: 8272
Joined: Sun Dec 29, 2013 7:06 pm

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

Post by EnjoyIt »

CoastLawyer2030 wrote: Wed May 19, 2021 8:43 am
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.
We made that switch when we could buy the cars with cash while still maxing out all our tax deferred space as well as adding some in our taxable account. Mine was the first luxury car, a German $65k sports coupe that I still drive today, but willing to do a decent amount of my own upkeep. 2 years later my wife followed with a used luxury SUV. Again, all cars paid by writing a check.

We strongly believe that one should not finance luxury. If we can’t pay cash, we can’t afford it.

Interestingly, we are shopping for a new car for the wife. She wants something bigger and obviously more expensive. We tried going with something like a Toyota Sequoia and we both found that it feels kind of cheep. We have become accustomed to the more comfy ride and electronics of the luxury SUV and can’t go back. So we are looking at more luxurious options which are as you guessed, more expensive. We will be paying cash for this car as well so we will need to wait a few more months as this cash accumulates.
A time to EVALUATE your jitters: | viewtopic.php?p=1139732#p1139732
User avatar
JoMoney
Posts: 16260
Joined: Tue Jul 23, 2013 5:31 am

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

Post by JoMoney »

CoastLawyer2030 wrote: Wed May 19, 2021 7:57 am...
But honestly I'm at the point where I guess I just don't really care...
Sounds like you're at the point of doing whatever you want.

FWIW, I would consider a Camry in the "Luxury" category, not "economy", but even at that it's a bit too large. I don't like driving cars on the larger side of mid-size, and if I'm going to drive a larger vehicle I'd rather it be a pickup or mini-van with some utility.
"To achieve satisfactory investment results is easier than most people realize; to achieve superior results is harder than it looks." - Benjamin Graham
Topic Author
CoastLawyer2030
Posts: 989
Joined: Wed Dec 30, 2020 7:44 am
Location: The Buckeye State

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

Post by CoastLawyer2030 »

MarkBarb wrote: Thu May 20, 2021 8:08 am When I was in my mid-40s, I bought a 3 year old CPO mid-tier luxury car. Before that, I had never owned a car with an automatic transmission, power windows, leather seats, more than 4 cylinders, or any of that fancy stuff. I did it because I felt that I could comfortably afford it and that the improvements in comfort and safety were worth the extra money. I drove it happily for another 12 years. After that, I replaced it with a new luxury SUV.

In each case, I considered the value I thought I would get for the purchase, including the total cost of ownership, and what my alternatives were for the money. When I was younger, I preferred to keep the money invested. As I got older and had less time and need for investment growth, my priorities shifted.
The bolded might be the most succinct statement as to what is happening to my mental accounting. It's insightful enough that I will probably bring it up to my wife when I get home later.

I graduated law school at age 26. At that time my wife and I had approximately $225,000 in student loan debt, lived in a 600 square foot loft, etc.

Since that time we have paid off our student loans down to $104,000, and I am sitting on more than that in cash to pay them off when the student loan payments resume this October. We also have approximately $214,000 in retirement savings and about $100,000 equity in the house.

By the end of this year, we will have zero debt outside our mortgage. We will have paid off a crazy amount of student loans within a decade. By age 35 we will hopefully have $400,000 saved for retirement, and if that goes untouched, that will be $2.5M at age 62 (assuming 7% returns).

Basically everything up to now has been about "paying the man" or saving for the future. I guess I'm close to a crossroads where the balance in my investment accounts is "meh," while what I live in and drive every day is taking on more importance.
acegolfer
Posts: 3029
Joined: Tue Aug 25, 2009 9:40 am

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

Post by acegolfer »

We moved the opposite direction. Bought a luxury car when young. Learned that we don't really care for the luxury brand name but the features matter more to us. We have been buying cheaper cars since but the features are still getting better because of technology improvement. The next car we will buy is less than half the price that we paid 20 years ago.
delamer
Posts: 17458
Joined: Tue Feb 08, 2011 5:13 pm

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

Post by delamer »

bgf wrote: Wed May 19, 2021 10:15 pm
rockstar wrote: Wed May 19, 2021 9:45 pm You can usually get what you want by going up slightly in trim levels.
If you want gadgets or better stereo this is true, but many of the "luxury" benefits are not available as trim add-ons.

For example, additional sound deadening in floorboards and elsewhere, double laminated glass for the same reason, better suspension for smoother ride/better handling, higher quality interior materials on dash, armrest, etc.

There are a lot of little things that make a "luxury" sedan different from a "family" sedan and no top trim level will get you there.
Agreed.

I knew someone about 15 years ago who had a Kia minivan with leather seats.

That in no way made it a luxury vehicle.
One thing that humbles me deeply is to see that human genius has its limits while human stupidity does not. - Alexandre Dumas, fils
Topic Author
CoastLawyer2030
Posts: 989
Joined: Wed Dec 30, 2020 7:44 am
Location: The Buckeye State

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

Post by CoastLawyer2030 »

delamer wrote: Thu May 20, 2021 10:00 am
bgf wrote: Wed May 19, 2021 10:15 pm
rockstar wrote: Wed May 19, 2021 9:45 pm You can usually get what you want by going up slightly in trim levels.
If you want gadgets or better stereo this is true, but many of the "luxury" benefits are not available as trim add-ons.

For example, additional sound deadening in floorboards and elsewhere, double laminated glass for the same reason, better suspension for smoother ride/better handling, higher quality interior materials on dash, armrest, etc.

There are a lot of little things that make a "luxury" sedan different from a "family" sedan and no top trim level will get you there.
Agreed.

I knew someone about 15 years ago who had a Kia minivan with leather seats.

That in no way made it a luxury vehicle.
After test-driving a BMW 330i yesterday — which is basically the entry level model — I totally agree. My mom has a 2019 Honda EX-L and it is not in the same galaxy as a BMW in terms of its electronics and interior features. And in terms of how the car drives, it is an even further difference.
dknightd
Posts: 3727
Joined: Wed Mar 07, 2018 10:57 am

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

Post by dknightd »

The reality is owning a car is a Luxury
Retired 2019. So far, so good. I want to wake up every morning. But I want to die in my sleep. Just another conundrum. I think the solution might be afternoon naps ;)
donaldc
Posts: 50
Joined: Sun Jun 11, 2017 3:30 pm

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

Post by donaldc »

20 years ago, my wife insisted we fit in with the neighborhood. Then both my immediate neighbors had Mercedes convertibles. 90% of the street had Mercedes. The largest Mercedes dealer in the world is 6 miles away. Embarrassed to drive a Mazda, she bought a Mercedes S500. She now leases BMW. So every 3 years she gets a new BMW. Keeping up with Jones.
New neighbor moved in this year has a Bentley. Agh.
econalex
Posts: 75
Joined: Fri Aug 31, 2018 9:44 am

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

Post by econalex »

Last year I switched to a new Genesis G70 from an 2013 Ford Focus. Have to say the upgrade is huge. The main thing I notice is the turbo power. Cruising at 75mph I’m only at 2200rpm now! (Versus at 3500rpm in the buzzbox Focus)

The G70 is RWD based AWD, 2.0t (more than enough for me), has cooled seats with nice leather, 360 camera, heated steering wheel, lane keep and adaptive cruise. And best part is still a lot cheaper than the Germans and comes with 3yr free maintenance. Backseat and trunk are small but I don’t have kids. The Koreans are really coming strong with value!
UALflyer
Posts: 1039
Joined: Thu Jan 17, 2013 9:42 am

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

Post by UALflyer »

CoastLawyer2030 wrote: Wed May 19, 2021 8:43 am 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.
Yes, but unfortunately, a lot of the "owning German cars out of warranty is a money pit" folks don't really understand and aren't interested in the nuances of these things.

Talking about the overall reliability of European or German cars makes no sense, as it runs the gamut. There are plenty of European models that actually represent a very good financial deal, as after the initial depreciation hit, they plateau and experience depreciation levels similar to their Japanese counterparts, all while being quite reliable and pretty inexpensive to maintain. There are other models that continue to experience steep depreciation for years, together with poor reliability and expensive maintenance and repair costs.

There are a few reasons for the depreciation, many of which make a number of these vehicles a very good value when they are slightly used. Quite a few people use luxury cars for status reasons, which means that they buy/lease them brand new. This causes their initial depreciation to be quite steep, but after that initial steep drop, the depreciation plateaus and starts to rival that of their non-luxury counterparts. This is the exact opposite of many non-luxury vehicles, as most Honda and Toyota models, for instance, undergo limited initial depreciation, which makes their slightly used models a rather poor financial value.

A number of luxury automakers, like BMW, subsidize their leases, so for a person who wants to drive newer cars, leasing can be cheaper than buying. This actually makes it easier to find gently used and extremely well maintained models that are still under their factory warranty (remember that with luxury cars, the factory warranty is 4 years/50K or 60K miles, while non-luxury cars have 3 year/36K mile warranties) that have already gone through the steepest part of their depreciation curve.

Likewise, there's these often repeated statements that European (and particularly German) cars should never be owned outside of their warranties, that their maintenance and repair costs are insane, etc... This all causes their initial depreciation to be quite steep, which also frequently means that while a lot of them represent very poor financial values when they're brand new, their slightly used models can hold their values pretty well, are pretty reliable and come with rather reasonable maintenance and repair costs.

There are quite a few of us out there who have been taking advantage of the above factors for many years, as it represents a good way to drive arguably better cars for way less than what a lot of people spend on their non-luxury counterparts.
Last edited by UALflyer on Thu May 20, 2021 12:19 pm, edited 1 time in total.
smitcat
Posts: 13308
Joined: Mon Nov 07, 2016 9:51 am

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

Post by smitcat »

donaldc wrote: Thu May 20, 2021 10:34 am 20 years ago, my wife insisted we fit in with the neighborhood. Then both my immediate neighbors had Mercedes convertibles. 90% of the street had Mercedes. The largest Mercedes dealer in the world is 6 miles away. Embarrassed to drive a Mazda, she bought a Mercedes S500. She now leases BMW. So every 3 years she gets a new BMW. Keeping up with Jones.
New neighbor moved in this year has a Bentley. Agh.
I really hope none of your neighbors pass away.
H-Town
Posts: 5911
Joined: Sun Feb 26, 2017 1:08 pm

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

Post by H-Town »

donaldc wrote: Thu May 20, 2021 10:34 am 20 years ago, my wife insisted we fit in with the neighborhood. Then both my immediate neighbors had Mercedes convertibles. 90% of the street had Mercedes. The largest Mercedes dealer in the world is 6 miles away. Embarrassed to drive a Mazda, she bought a Mercedes S500. She now leases BMW. So every 3 years she gets a new BMW. Keeping up with Jones.
New neighbor moved in this year has a Bentley. Agh.
I'd be like:

I got half a mind to paint a plywood sign
And nail it up on a notty pine tree
Saying I was here first
This is my piece of dirt
And your rambling don't rattle me

https://www.youtube.com/watch?v=tJixs2FoZ_Y
Time is the ultimate currency.
Normchad
Posts: 5648
Joined: Thu Mar 03, 2011 6:20 am

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

Post by Normchad »

I feel like the cars just snuck up on me and they all became luxurious while I was asleep.

The modern Honda Accord would have been considered a luxury car (and maybe a performance car) 25 years ago. The old ads for luxury cars would brag that they had an air bag for the driver and the passenger, and now all cars seem to have 8 of those.

AC is ubiquitous, as are power windows, ABS and more safety features than we can count. Backup cameras are standard now. Most cars have sun roofs and dual zone climate. Nav and satellite radio are extremely common. It’s just hard to,pick any car now that wouldn’t have been a luxury car in the nit too distant past.

But I get what you’re asking. My eyesight isn’t so great any more. So I started buying the luxurious models because I really felt I needed HID or LED headlamps to drive better at night. I didn’t want luxury, but to get those headlights, I had to buy the highest trim levels, etc.

In terms of just comfort and features, a Camry is pretty amazing. (Although I don’t own one). And even the lowly Corolla is pretty great in terms of size, comfort, and amenities.
UALflyer
Posts: 1039
Joined: Thu Jan 17, 2013 9:42 am

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

Post by UALflyer »

fortunefavored wrote: Wed May 19, 2021 8:19 am Even a modern Toyota Camry is more luxurious and nicer than a "luxury" car from 10 years ago.
These types of statements is one of many reasons that so many of us with semi-luxury and luxury cars are reluctant to post in these threads, as the above statement is the exact opposite of the way that many of us look at these things.

A lot of people on this forum think of "luxury" in terms of options like Apple CarPlay. That's perfectly fine, but to many of us, a nose heavy front wheel drive Camry is a perfectly fine transportation appliance, but would be painful to drive regardless of its trim level. Likewise, those of us who enjoy certain driving characteristics would say that a lot of older semi-luxury/luxury cars were actually far more dynamic, sporty and fun to drive than their newest versions. To a lot of us, BMW's 3 and 5 series models are in that camp, as BMW has been on a path of prioritizing ride refinement (and even that hasn't been implemented well: just take a look at the runflat tires that they now use) over handling and driving dynamics, which has alienated a lot of former BMW fans and has caused them to transition to other brands.
Last edited by UALflyer on Thu May 20, 2021 2:00 pm, edited 1 time in total.
delamer
Posts: 17458
Joined: Tue Feb 08, 2011 5:13 pm

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

Post by delamer »

smitcat wrote: Thu May 20, 2021 11:06 am
donaldc wrote: Thu May 20, 2021 10:34 am 20 years ago, my wife insisted we fit in with the neighborhood. Then both my immediate neighbors had Mercedes convertibles. 90% of the street had Mercedes. The largest Mercedes dealer in the world is 6 miles away. Embarrassed to drive a Mazda, she bought a Mercedes S500. She now leases BMW. So every 3 years she gets a new BMW. Keeping up with Jones.
New neighbor moved in this year has a Bentley. Agh.
I really hope none of your neighbors pass away.
Thanks for the laugh, smitcat!
One thing that humbles me deeply is to see that human genius has its limits while human stupidity does not. - Alexandre Dumas, fils
MMiroir
Posts: 852
Joined: Sun Mar 29, 2020 12:14 pm

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

Post by MMiroir »

donaldc wrote: Thu May 20, 2021 10:34 am 20 years ago, my wife insisted we fit in with the neighborhood. Then both my immediate neighbors had Mercedes convertibles. 90% of the street had Mercedes. The largest Mercedes dealer in the world is 6 miles away. Embarrassed to drive a Mazda, she bought a Mercedes S500. She now leases BMW. So every 3 years she gets a new BMW. Keeping up with Jones.
New neighbor moved in this year has a Bentley. Agh.
When we were living in our starter townhome in the city, the nicest car on our block was a new BMW with a bumper sticker saying "Prosperity is my Birthright". Thiers was the only unit on our block that was foreclosed on during the 2000 recession. That was a good lesson not to care what the neighbors spend their money on.
delamer
Posts: 17458
Joined: Tue Feb 08, 2011 5:13 pm

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

Post by delamer »

Normchad wrote: Thu May 20, 2021 11:35 am I feel like the cars just snuck up on me and they all became luxurious while I was asleep.

The modern Honda Accord would have been considered a luxury car (and maybe a performance car) 25 years ago. The old ads for luxury cars would brag that they had an air bag for the driver and the passenger, and now all cars seem to have 8 of those.

AC is ubiquitous, as are power windows, ABS and more safety features than we can count. Backup cameras are standard now. Most cars have sun roofs and dual zone climate. Nav and satellite radio are extremely common. It’s just hard to,pick any car now that wouldn’t have been a luxury car in the nit too distant past.

But I get what you’re asking. My eyesight isn’t so great any more. So I started buying the luxurious models because I really felt I needed HID or LED headlamps to drive better at night. I didn’t want luxury, but to get those headlights, I had to buy the highest trim levels, etc.

In terms of just comfort and features, a Camry is pretty amazing. (Although I don’t own one). And even the lowly Corolla is pretty great in terms of size, comfort, and amenities.
As noted in some previous posts though, the ride comfort, quiet and well-trimmed interiors are a big part of the luxury experience.

So satellite radio, dual climate controls, up-to-date safety features, etc. are necessary but not sufficient to make a vehicle luxurious.
One thing that humbles me deeply is to see that human genius has its limits while human stupidity does not. - Alexandre Dumas, fils
THY4373
Posts: 2771
Joined: Thu Mar 22, 2012 3:17 pm

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

Post by THY4373 »

At the age of 22 (back in early 1990s) when going to grad school I purchased a 1979 Cadillac Seville to replace my 1979 Ford Fairmont Wagon. I only half joke the Seville was every bit a luxury car for its time (it actually had electronic fuel injection (with an analog computer controlling it)). It was a solid car for my time in grad school and was mint until a Texas hailstorm dented it up.
UALflyer
Posts: 1039
Joined: Thu Jan 17, 2013 9:42 am

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

Post by UALflyer »

bligh wrote: Wed May 19, 2021 12:29 pm Maintenance on a BMW is easily 3x that of a regular Japanese or American car, and it will need that maintenance often.
I see these types of statements on this forum all the time. When I ask for the specifics, the answer usually has to do with the cost of synthetic oil changes at the dealer without a coupon.

A number of luxury cars do require synthetic oil changes, which, depending on the model and the year, are typically recommended every 10K - 15K miles. With a coupon, BMW and Mercedes dealers in the area routinely do them for about $100 (sometimes $120).

A standard oil change does typically run $35-$45, but depending on the model and the year, is frequently recommended every 5K miles or so. So, when you look at the entire 10K - 15K mile interval, the costs are pretty similar, and an extended mileage interval that you get with synthetic oil saves you time.

Yes, there are some makes and models out there with extravagantly expensive maintenance costs, but a garden variety 3-series that the OP has asked about isn't in that category.
Last edited by UALflyer on Thu May 20, 2021 12:04 pm, edited 2 times in total.
fulliautomatix
Posts: 82
Joined: Tue Aug 18, 2020 3:49 pm

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

Post by fulliautomatix »

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?
I am going from Honda Accord/Civic to Acura MDX/RDX. The main reasons we went from economy to luxury in order of importance was (1) to have a quieter ride (2) more comfortable seats/lumbar and other comfort ride features and (3) more powerful engines that get to the same speed at lower RPMs (also leads to lower engine noise). The Acuras also have acoustic windshields and they really cut down on wind noise. I keep all cars for at least 15 years.

I test drove both the MDX and the X5 at the same speeds on the same roads/freeways and the cabin sound levels were the same to my ear and that sealed the deal.

The 2021 MDX is really really nice and I am resisting the urge to trade in my older one for the 2021 (dont want to break my 15 year rule)....but it is NICE.
Normchad
Posts: 5648
Joined: Thu Mar 03, 2011 6:20 am

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

Post by Normchad »

delamer wrote: Thu May 20, 2021 11:49 am
Normchad wrote: Thu May 20, 2021 11:35 am I feel like the cars just snuck up on me and they all became luxurious while I was asleep.

The modern Honda Accord would have been considered a luxury car (and maybe a performance car) 25 years ago. The old ads for luxury cars would brag that they had an air bag for the driver and the passenger, and now all cars seem to have 8 of those.

AC is ubiquitous, as are power windows, ABS and more safety features than we can count. Backup cameras are standard now. Most cars have sun roofs and dual zone climate. Nav and satellite radio are extremely common. It’s just hard to,pick any car now that wouldn’t have been a luxury car in the nit too distant past.

But I get what you’re asking. My eyesight isn’t so great any more. So I started buying the luxurious models because I really felt I needed HID or LED headlamps to drive better at night. I didn’t want luxury, but to get those headlights, I had to buy the highest trim levels, etc.

In terms of just comfort and features, a Camry is pretty amazing. (Although I don’t own one). And even the lowly Corolla is pretty great in terms of size, comfort, and amenities.
As noted in some previous posts though, the ride comfort, quiet and well-trimmed interiors are a big part of the luxury experience.

So satellite radio, dual climate controls, up-to-date safety features, etc. are necessary but not sufficient to make a vehicle luxurious.
Totally fair. Everybody draws the luxury line in a different place. I’ve never thought of BMW as luxurious, I always thought if them as sporty. But other reasonable people see it differently.

There is an odd thing to Luxury that is hard to put my finger on. I know that a Mercedes is Luxurious in a way that a Camry isn’t, but I have a hard time identifying what actually separates them.

My car does this great thing; it automatically keeps the interior cool when it’s sitting out in a parking lot. It will turn on the AC if it needs too. To me, that is an awesome luxury; I never have to get in a hot car. And it will also automatically open and close my garage doors when I go home or leave the house. To me, very luxurious stuff. When I go to the car wash, it automatically folds the mirrors in. Luxury to me.

So these threads are interesting, I guess in part, because it is hard to define exactly what luxury is. And everybody has slightly different views on it.

Remember the old commercials pitting Lincoln against Cadillac? (Do we consider either of those to be luxury brands anymore?). They would have a little old man sitting in the back seat cutting diamonds as they drove over cobblestones. At one point that is what luxury was portrayed to be. Then later Lexus started running their ads, where they just had a marble rolling along the body seams of the car; the message being that consistent panel gaps was luxury. At least on those 2 fronts, a Camry would do quite well.

I’ve seen some Volvo interiors, that I thought were just absolutely gorgeous. Not sure what makes them feel that way, but they would impress me everyday if I owned it.
Wellfleet
Posts: 636
Joined: Sun Jan 26, 2014 7:18 pm

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

Post by Wellfleet »

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?
Spouse was driving our economy car and got hit by an SUV running a red light. Thankfully no injuries but we bought a big car to compete with current trends.
MMiroir
Posts: 852
Joined: Sun Mar 29, 2020 12:14 pm

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

Post by MMiroir »

UALflyer wrote: Thu May 20, 2021 11:40 amA lot of people on this forum think of "luxury" and things like Apple CarPlay. That's perfectly fine, but to many of us, a nose heavy front wheel drive Camry is a perfectly fine transportation appliance, but would be painful to drive regardless of its trim level. Likewise, those of us who enjoy certain driving dynamics would say that a lot of older semi-luxury/luxury cars were actually far more dynamic, sporty and fun to drive than their newest versions. To a lot of us, BMW's 3 and 5 series models are in that camp, as BMW has been on a path of prioritizing ride refinement (and even that hasn't been implemented well: just take a look at the runflat tires that they now use) over handling and driving dynamics, which has alienated a lot of former BMW fans and has caused them to transition to other brands.
Some of this issue is that modern cars by necessity have become heavier and bulkier than in the past, but BMW started losing the plot during the Bangle era. Having had an e28 many years ago, it is sad to see each successive BMW model get worsening reviews for driving dynamics. What has happened is that BMW attracts a new buyer like the OP because they are looking for a "luxury" car. They drive the car for a few years, and then decide that the seats are too firm, or the ride too harsh, and switch to a Lexus, Audi, or some other "luxury" thing. BMW responds by watering their car down, and the cycle repeats until today's generation of BMW's shares very few driving characteristics with the models that made them famous and distinctive 20 to 50 years ago. The new base 3 series may be better than an Accord, but compared to an older 3-series or something like the new Alfa Giulia, they are pretty dull to drive.
bgf
Posts: 2085
Joined: Fri Nov 10, 2017 8:35 am

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

Post by bgf »

dknightd wrote: Thu May 20, 2021 10:22 am The reality is owning a car is a Luxury
frame of reference is always key on this kind of stuff. for me, a Lexus is a "luxury" car. a few months ago i was talking to one of my best friends, who works at a hedge fund, has been in finances for over 10 years, owns a multimillion dollar home in the Hamptons, and is very successful for any age, certainly for our mid-30s. he just bought a brand new mercedes SUV. he doesn't know anything about cars and isn't interested in them at all. he literally showed up at the MB dealership and just bought the SUV. we were talking about the price, and i made some comment off hand like, 'whatever, the cost is no problem to you and if paying for the brand name makes you happy then thats great.' he responded and was like,' brand name? its not like im driving a Bentley. Its just a Mercedes.'

For his frame of reference, pretty much anyone can by a mercedes. and thats true, given the virtually nonexistenct restrictions on car loans, he's right. on the other hand, its not quite the same with a Bentley.

for my friend, he just went out and bought an SUV, and there's nothing more to it than that. and that makes sense. the mercedes is smaller part of his net worth than my 10 year old used camry is for me.
“TE OCCIDERE POSSUNT SED TE EDERE NON POSSUNT NEFAS EST"
bubbadog
Posts: 1061
Joined: Wed Mar 26, 2014 9:17 pm
Location: Cincinnati,Ohio

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

Post by bubbadog »

sherwink wrote: Wed May 19, 2021 9:42 pm Eleven years ago, I bought a ten year old Lexus LS430. That's my new car. I take good care of the car and keep it garaged. I had the local dealer do some minor work on it a year ago. As I left the dealership, the sales rep told me it was the one of the best conditioned cars they'd seen.
I just purchased an 04 LS 430 with 44,000 miles 3 months ago. IMO, they are the luxury car bargain of the century.
MDfan
Posts: 1116
Joined: Tue Oct 18, 2016 7:32 am

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

Post by MDfan »

I'm almost 60 and I just upgraded from a Hyundai Sonata (Limited version, which we gave to our daughter) to a new Acura RDX. First thing I've owned other than a Honda, Nissan or Hyundai. Love it so far. I'm not a big car guy. We looked at both the Lexus NX and the Acura. Really liked the Lexus but could not get past that front grille.
plasticofantastico
Posts: 53
Joined: Mon Mar 01, 2021 6:33 pm

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

Post by plasticofantastico »

FireSekr wrote: Wed May 19, 2021 11:08 pm
bubbadog wrote: Wed May 19, 2021 4:47 pm
Afty wrote: Wed May 19, 2021 2:32 pm I did the classic thing of buying an entry lux car immediately after finishing grad school. What I did right was that I bought a 3-year old off lease one with a great track record for reliability (an Infiniti G35). I kept if for 8 years and replaced it with a Tesla Model 3. I don’t think buying something cheaper would have made any meaningful difference in our finances.

I do wish I had considered resale value more seriously. My Infiniti depreciated pretty badly, so I might have been better off had I bought a BMW or Audi instead even at a higher initial purchase price.
I suspect the BMW or Audi would have depreciated even more.
2 out of the 3 BMWs I currently own have gone up in value since I’ve bought them, and maintenance has not been the nightmare that others here claim.

The key with BMW is that you get them cheap used because they have a reputation for “poor reliability”. Well the truth is that some of their models/engines have extremely poor reliability (v8, turbo 4) but other models/engines have way above average reliability (inline 6 except the n54)

Because many people just hear the horror stories, the resale value of all BMWs is poor, including the good ones which don’t deserve to be.

Take advantage of this, get one of the better models for reliability at bargain basement prices and you’ll drive a more fun, more comfortable, and nearly as reliable car vs a Camry or accord.

My 23 year old e36 M3, e90 328x-drive, and 20 year old e46 330xi have been nearly bulletproof and the few repairs I’ve had have been cheap. My 20 year old M5 has been more needy than the others and more expensive to repair, but it’s also the best all around car out of all of them and has increased in value since I bought it to the point where it’s covered the money I put into repairs.
Agree with the above. I have an e46 with 275,000 miles and an e70 diesel with 100K miles. The dealer service is overpriced, so I do all the basic service and have a good Indy for anything that requires a lift. Most BMWs are leased, not sold, and it is (or was) pretty easy to get a 3 year old car for about half the original purchase price. Total cost of ownership is on par with the Honda’s I bought new, with tires being the greatest expense.
EnjoyIt
Posts: 8272
Joined: Sun Dec 29, 2013 7:06 pm

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

Post by EnjoyIt »

CoastLawyer2030 wrote: Thu May 20, 2021 9:05 am
MarkBarb wrote: Thu May 20, 2021 8:08 am When I was in my mid-40s, I bought a 3 year old CPO mid-tier luxury car. Before that, I had never owned a car with an automatic transmission, power windows, leather seats, more than 4 cylinders, or any of that fancy stuff. I did it because I felt that I could comfortably afford it and that the improvements in comfort and safety were worth the extra money. I drove it happily for another 12 years. After that, I replaced it with a new luxury SUV.

In each case, I considered the value I thought I would get for the purchase, including the total cost of ownership, and what my alternatives were for the money. When I was younger, I preferred to keep the money invested. As I got older and had less time and need for investment growth, my priorities shifted.
The bolded might be the most succinct statement as to what is happening to my mental accounting. It's insightful enough that I will probably bring it up to my wife when I get home later.

I graduated law school at age 26. At that time my wife and I had approximately $225,000 in student loan debt, lived in a 600 square foot loft, etc.

Since that time we have paid off our student loans down to $104,000, and I am sitting on more than that in cash to pay them off when the student loan payments resume this October. We also have approximately $214,000 in retirement savings and about $100,000 equity in the house.

By the end of this year, we will have zero debt outside our mortgage. We will have paid off a crazy amount of student loans within a decade. By age 35 we will hopefully have $400,000 saved for retirement, and if that goes untouched, that will be $2.5M at age 62 (assuming 7% returns).

Basically everything up to now has been about "paying the man" or saving for the future. I guess I'm close to a crossroads where the balance in my investment accounts is "meh," while what I live in and drive every day is taking on more importance.
A time to EVALUATE your jitters: | viewtopic.php?p=1139732#p1139732
rockstar
Posts: 6326
Joined: Mon Feb 03, 2020 5:51 pm

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

Post by rockstar »

bgf wrote: Wed May 19, 2021 10:15 pm
rockstar wrote: Wed May 19, 2021 9:45 pm You can usually get what you want by going up slightly in trim levels.
If you want gadgets or better stereo this is true, but many of the "luxury" benefits are not available as trim add-ons.

For example, additional sound deadening in floorboards and elsewhere, double laminated glass for the same reason, better suspension for smoother ride/better handling, higher quality interior materials on dash, armrest, etc.

There are a lot of little things that make a "luxury" sedan different from a "family" sedan and no top trim level will get you there.
I see this with Bentley and Rolls and some custom AMG Mercedes. I see very little difference between a high trim level and the luxury brand of the same manufacture. The cost difference doesn't buy you that much. If I was going to go luxury, I'd get a Bentley or maybe Maybach. You're not going to get the level of customization in a Lexus. I don't see the point of buying a Lexus, BMW, or Mercedes. These are nothing more than upper middle class status symbols.
phxjcc
Posts: 1329
Joined: Thu Aug 23, 2018 3:47 pm

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

Post by phxjcc »

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?
The "efficient market" principle ALMOST applies to motor vehicles.

You want a $250,000 Aston Martin, with 20,000 miles?
Fine--15 years old, $25,000
You want a $30,000 Tundra, with 20,000 miles?
Fine--15 years old, $30,000.

Etc, etc.

There IS a reason Land Rovers and BMW's depreciate 80% very quickly.

Having said that, to answer your question...I bought a 1985 MBZ 300D in 1990 because I had a 100 mile a day commute in LA traffic and wanted safe an comfortable. The car was as reliable and only slightly more expensive to run as any Toyonda.

I also have a 14 year old MBZ S Class currently and the tech and comfort is superior to anything available from Hondota.

You want boring reliable lurury,buy a Lexus.
Used LS's are an excellent value.
But, as Car and Driver once said: "It is, without doubt, the best Buick being made today."

High performance and tech requires maintenance, including wear bits like tires.

You want Maranello's best?
Belt service: $5,000
Munich's most magnificent?
Walnut shell blast you intake every 25K, and don't even ask about a V10 M car.
Stuttgart stunners?
Sticky buttons and worn seat bolsters, after 40,000 miles they look like a 400,000 mile F150.
Crewe's coaches?
You are on the wrong forum.
YeahBuddy
Posts: 2505
Joined: Tue Oct 31, 2017 12:55 pm

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

Post by YeahBuddy »

The answer from a car guy is never. I'm not into luxury. Loud and fast yes, or just fast / quick around corners yes but luxury no. Maybe I just haven't reached that level of success yet or it's not my taste. But I'm not into luxury vehicles. I'm not a fan of BMW. Haven't been in any Mercedes Benz or Lexus. So I guess I don't know what I'm missing?

But the best time to enjoy cars is when you're younger. It's fun at 40+ but not as much fun as when you were 18-25. I can't explain it but it is. Life is different. Ramble over.
Light weight baby!
User avatar
fishnskiguy
Posts: 2635
Joined: Tue Feb 27, 2007 12:27 pm
Location: Castle Rock, CO

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

Post by fishnskiguy »

Two years ago. Because we could.

At age 75, with no mortgage or other debts, and a CPI adjusted pension, which allows us to live below our means, we splurged and bought a new BMW X-3.

It was special ordered with photonic blue exterior and oyster interior, with all available driver assists and safety aids. Absolutely gorgeous car. Paid cash. No regrets. Zero problems so far. It is still on warranty, but when it goes off, we are lucky to have a very good independent repair shop that does excellent work for half of what the Penske stealarship in Scottsdale charges.

I expect this to be the last car I ever buy.

Chris
Trident D-5 SLBM- "When you care enough to send the very best."
vfinx
Posts: 656
Joined: Thu Apr 19, 2018 9:35 pm

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

Post by vfinx »

I switched once I made a personal judgement that my finances could support it without sacrificing higher priorities.

I couldn’t care less about it as a status symbol. In my vhcol area, my entry level luxury car is nothing special at all. And in my circles, a luxury car is actually looked down upon because everyone is into signaling frugality and false humility.

But I love the way it drives. It’s more comfortable, refined and powerful than regular cars. The engine makes a wonderful sound. The seats are more supportive. It’s quieter. It takes corners beautifully. It feels super stable at speed. So many other little things that I’ve grown to appreciate.

That said, it seems that more recently, the upper tiers of the non-luxury brands have made it harder to justify stepping up to the next tier. I tested the top-of-the-line Honda Accord and Mazda CX-5 and they were fantastic. Unless the luxury players step up their game, I will probably head back down to the non-luxury tier again.
UALflyer
Posts: 1039
Joined: Thu Jan 17, 2013 9:42 am

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

Post by UALflyer »

rockstar wrote: Thu May 20, 2021 8:30 pm
bgf wrote: Wed May 19, 2021 10:15 pm
rockstar wrote: Wed May 19, 2021 9:45 pm You can usually get what you want by going up slightly in trim levels.
If you want gadgets or better stereo this is true, but many of the "luxury" benefits are not available as trim add-ons.

For example, additional sound deadening in floorboards and elsewhere, double laminated glass for the same reason, better suspension for smoother ride/better handling, higher quality interior materials on dash, armrest, etc.

There are a lot of little things that make a "luxury" sedan different from a "family" sedan and no top trim level will get you there.
I see this with Bentley and Rolls and some custom AMG Mercedes. I see very little difference between a high trim level and the luxury brand of the same manufacture. The cost difference doesn't buy you that much. If I was going to go luxury, I'd get a Bentley or maybe Maybach. You're not going to get the level of customization in a Lexus. I don't see the point of buying a Lexus, BMW, or Mercedes. These are nothing more than upper middle class status symbols.
You may want to re-read what others have already told you above, which is that a high trim level on a regular vehicle generally adds various gadgets and aesthetics, but does not otherwise change the way the vehicle is constructed. Even if we are talking about the luxury divisions of the same manufacturer (Lexus and Toyota, Infiniti and Nissan, Acura and Honda) and the models that share a platform, luxury models are still constructed differently. So, a lowly Lexus ES, which is a super luxury Toyota Camry, uses thicker sheet metal, more noise deadening, etc... It doesn't matter what trim level of a Camry you choose, as you won't be able to get this.

BMW and Mercedes don't have non-luxury divisions, and a number of Infiniti, Acura and Lexus models are not built on a shared platform, so they are completely different vehicles, which means that the differences extend far beyond sheet metal and noise deadening, as we are talking about completely different engines, totally different driving dynamics, FWD vs. RWD, etc...
I see very little difference between a high trim level and the luxury brand of the same manufacture. The cost difference doesn't buy you that much.
This is actually one of the most common mistakes that new car buyers make, which is to buy some of the highest trim levels of a non luxury vehicle without looking at any luxury vehicles. With non-luxury vehicles, certain features result in absolutely horrendous depreciation, whereas a base or a low trim level of a luxury vehicle may include it as a standard feature, and may depreciate less. Likewise, the incentives are always different (and people have a tendency to just compare the MSRP's, which frequently have nothing to do with the final price), so it's actually fairly common to have a situation where a high trim level of a non-luxury vehicle costs you more up front and suffers higher depreciation than a luxury vehicle.

Even if you are just looking for a specific option, you shouldn't make any assumptions. A few years ago, for instance, I saw a situation where Mazda was charging more for a certain option than Mercedes.
Topic Author
CoastLawyer2030
Posts: 989
Joined: Wed Dec 30, 2020 7:44 am
Location: The Buckeye State

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

Post by CoastLawyer2030 »

UALflyer wrote: Fri May 21, 2021 7:28 amThis is actually one of the most common mistakes that new car buyers make, which is to buy some of the highest trim levels of a non luxury vehicle without looking at any luxury vehicles. With non-luxury vehicles, certain features result in absolutely horrendous depreciation, whereas a base or a low trim level of a luxury vehicle may include it as a standard feature, and may depreciate less. Likewise, the incentives are always different (and people have a tendency to just compare the MSRP's, which frequently have nothing to do with the final price), so it's actually fairly common to have a situation where a high trim level of a non-luxury vehicle costs you more up front and suffers higher depreciation than a luxury vehicle.

Even if you are just looking for a specific option, you shouldn't make any assumptions. A few years ago, for instance, I saw a situation where Mazda was charging more for a certain option than Mercedes.
Ding ding ding. It is almost impossible to describe how stupid I feel for buying a used Camry for $16,000 when I could have got a three year old luxury car for $25,000.

My prior habit was to just search websites for "all Hondas" or "all Toyotas." I never even considered that you could get a luxury car for slightly more. Here is a 2017 Bimmer, granted "just" a 320, with 14,000 miles listed for $24,000. https://www.cars.com/vehicledetail/deta ... /overview/

I know that's an entry level Bimmer, but having driven the 330 and a Camry, you can't even compare the two cars. It's not even close.

$8,000 difference, and even 3x maintenance, is nothing in the grand scheme of things.
Post Reply