Jeff has a current generation BMW M3, and as a new homeowner, it’s not super practical for him. He wants something that is more capable in bad weather. He likes luxury cars, what he doesn’t like is getting hosed in depreciation costs. What car should he buy?
Here is the scenario:
Currently, drive an F80 M3 but am looking to trade it in for something a bit more practical. I have recently bought a house with a long I paved driveway and need something that will be able to make it to my house if there is snow in the driveway. Also looking for something that holds its value well for 2-3 years. Looking to spend up to $60K but I’m ok with suggestions that cost less as well. Would really like to have a vehicle that I can get a good portion of my money back in resale in 2-3 years.
Something with all-wheel-drive is preferred and it would be great if it was something unique and fun.
Budget: up to $60,000
Daily Driver: Yes
Location: Rhode Island
Wants: Low cost of ownership, good resale, AWD
Doesn’t want: Something that will depreciate like crazy
Jeff, if you are concerned with resale value, what you are really looking at is the cost of ownership over time. There are two ways to approach this: The first is you can lease something since the cost of that lease will be established up front. You would know exactly how much you are paying over that three-year term and wouldn’t be rolling the dice when it comes to trade-in time. The downside to that plan is that you are still paying for the massive depreciation drop on a luxury car.
The better strategy is likely to get something that has already depreciated so that the steepest drop in value has already occurred, but I suggest you combine that with a vehicle that has a reputation for holding value. You need a Toyota Land Cruiser.
These are pretty much indestructible, have reasonable maintenance costs, and due to their combination of low production numbers and a hardcore following of owners, any subsequent depreciation will be reasonable.
The downside to the Land Cruiser is it’s not exactly “fun” if you are just going to keep it on paved roads. It’s a big, comfortable, luxury SUV with a Toyota badge. However, low-speed overlanding can be just as enjoyable as unleashing the horsepower of your M3, so this could be an opportunity to explore a different side of car culture.
Here is a 2016 Land Cruiser with reasonable miles not far from you for just under your maximum budget. Get out there and explore!
Ah yes, Land Cruisers are good as hell if you can afford them. But I think you could use some perspective. For that, I have two pieces of advice. First: snow tires? They’re good. You could buy the nicest snow tires in existence and they won’t cost as much as changing your already nicely-sized and happy vehicle.
Second: “holding value” and depreciation is all about perspective. Look at, say, this 1993 Mitsubishi Lancer Evolution RS. Recently legal to import into the United States, these are very desirable cars at this moment and, as such, this East Coast import shop wants a lofty $16,995 for it. Is that figure going to go down as these cars become more common here in America? Sure. But even if it loses half of its value in a few years, you’re only out eight and a half grand. By contrast, you’d lose tens of thousands on a new all-wheel drive BMW 5er. New “practical” luxury cars depreciate like mad and basically all that holds value these days are trucks and rally cars. You’re basically holding onto your money with something old and awesome. That RS, for instance, has a mechanical rear limited slip diff and is stripped down to be as lightweight from the factory as possible. Look for something like that, or wait for an Audi RS2 if you can.
Look, depreciation in a car is like a law of nature, like your eyes getting worse as you age or peeing yourself whenever you think too hard about bivalves. There’s exceptions, sure, like air-cooled Porsches right now and other collectible cars going up in value, but the only real way to avoid the sting of depreciation is to get a car that’s already been hit with the worst of it, and come out the other side. A car like this $15,000 1976 Rolls-Royce Silver Shadow.
This Roller has depreciated at a scale most cars can only have nightmares about, but because it’s a freaking Rolls-Royce, it still manages to comport itself with some dignity. You wanted a luxury car, right? Well, brother, this is as luxury as luxury luxuriates. Driving this thing will be like sitting on a leather sofa borne by the finest English Bulldogs riding on a cloud made of flannel and worcestershire sauce, pulled along by eight stately pistons displacing a massive 6.75 liters.
You want to get up that snowy driveway? Forget about fads like AWD and just get a set of snow tires for your Roller. You’ll be able to plow through anything with the right tires.
This car will not depreciate any more than this; in fact, any improvements you make will just drive it up in value, probably! It’s unique and fun and luxurious and a quarter of what you’re willing to pay.
Don’t be a chump. Get the Rolls.
I think Tom’s on the right track with the Land Cruiser. Those things are tanks with incredible survivability, both in terms of their value and mechanical health.
But unless you’re really wheeling, which isn’t really a thing in your neck of the woods, Land Cruisers are... not all that fun... to drive. I might suggest a six-speed Tacoma or TRD Pro 4Runner at your budget, but honestly I think the “funnest” answer is Jeep Wrangler.
Wranglers hold their value annoyingly well, definitely drive all four wheels, and are four-season fun even if you don’t go off-road. Take the roof and doors off and buzz around New England in summertime, maybe take it on the sand at Cape Cod or something. It’d be awesome. You’d just have to get used to a slightly slower pace of things from your M3.
And lucky you, the new-for-2018 Wrangler is appreciably better to drive than its predecessor so you won’t have to suffer too much ruggedness on your commute. And oh yeah, the top of the line Rubicon trim is right around your budget!