Fred is about to change his commute from around town to a 200-mile round trip. He has up to $75,000 to spend on a luxury cruiser, but the tricky part is that he does not want to lose more than $10,000 in depreciation or maintenance over five years. What car should he buy?
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Here is the scenario -
After years of low mileage, around-town driving, I’m now regularly commuting 200+ miles round trip from SF to Sacramento to see my parents. While I love my 2010 Honda Fit and 2018 Miata, neither leaves me particularly refreshed at the end of a day after 4+ hours of 70mph+ California freeway driving.
So I’m looking for a luxe freeway cruiser. Sedan or coupe. No SUVs. Something quiet and smooth, with a cabin that is a comfy place to be. Oh, and a OEM good stereo. Automatic or manual.
Here’s the twist for you guys — I’m pretty indifferent to purchase price up to $75k, but I’m hoping to keep total depreciation + maintenance to $10k for 5 years of ownership.
Budget: up to $75,000
Daily Driver: Yes
Location: Sacramento, CA
Wants: Comfort, good stereo, low cost of ownership
Doesn’t want: An SUV
This certainly is a challenge, but let’s be real about a few aspects of your situation. It is incredibly rare that a car won’t depreciate more than $10,000 over the course of five years. The only instance where you can maintain value like that is something on the vintage end or a high-demand sports car like a Porsche 997.2. However, in either case with a 200-mile daily commute for what I assume is a five-day work week ends up being a total of around 52,000 miles a year. That is 260,000 miles over the course of five years. It doesn’t matter what you buy, even if it’s a Ferrari GTO, that car is going to lose a lot of value given the number of miles you put on it. Given that it is basically impossible to minimize depreciation costs, we can focus on minimizing your maintenance costs. Though keep in mind that even if you did the standard tires, brakes, and oil changes that is going to add up with a 52,000-mile yearly commute.
You need a sedan (or coupe) with an incredibly high level of reliability, comfort, and I would also assume good gas mileage. What you are asking for is a Lexus ES300h. The Lexus ES is one of the most reliable luxury cars you can buy. They are also supremely comfortable for long-distance drives. The hybrid version will get up to 45 MPG on the highway and you can outfit it with the excellent Mark Levinson sound system. This CPO example is the Ultra Luxury trim that is loaded with every option. It originally retailed for around $54,000 so you do get to take advantage of someone else’s initial depreciation.
I guess I can’t convince you to buy a 4Runner, given your ban on SUVs. Tom is on the right track with his Lexus recommendation, and I may have suggested a Mirai, because you’re in CA. At some point, Toyota might practically give those away, so you’re likely looking at heavy depreciation. If we can’t avoid that, then let’s make up for it with low cost of operation. You need an EV, likely a Tesla.
Here’s why: you’ve asked for quiet, smooth, cheap to run, and you’re wary of depreciation. A Tesla Model 3 hits all of those marks, basically. You won’t have to pay for gas. The Model 3 can cover your mileage needs, and there’s plenty of Tesla infra in CA. You already have an enthusiast car with the Miata — and even have a beloved Fit — so you’re mostly covered.
As a bonus, the Model 3 may depreciate less than its Tesla siblings. You wanted something luxe, and the Model S fits that description better but it’s slightly over budget and could be hit with more depreciation. Stick to the Model 3. With your budget, you could spring for a Model 3 Performance. Just mind the nipples.
Unfortunately, finding a car with that kind of depreciation is going to be relatively rare. Like Tom pointed out, unless it’s something extremely high-end, most cars take at least 50 percent hit five years out.
With that unfortunate reality, why not get something that both takes advantage of someone else taking that hit, is rather understated and luxurious, and will probably be more reliable than its competitors. That describes the Kia K900. It has a twin-turbo V6 that has enough power that won’t leave you wanting, plus its fuel economy is better than some other V8 luxury sedans because of it. It’s a comfortable cruiser too. This thing is loaded with everything from a panoramic roof to heated and cooled seats. And this particular example is almost brand new as it has under 10,000 miles on it. So you still get a factory warranty of 5 years or 60,000 on the powertrain.
Finding a vehicle that meets your criteria is quite the challenge. Any modern luxury vehicle will quickly lose value with the miles you want to drive it. But older luxury vehicles at the bottom of their depreciation curves aren’t likely to be the most enjoyable, or reliable.
I present to you the Toyota Crown Royal Saloon G. Aside from having a fantastic name, this thing is drenched in 1980s understated luxury. These have air suspension, a CD-based navigation system with your routes piped to a CRT and a choice of straight six engines or the 1UZ V8 from the Lexus LS400.
These can be had for roughly $7,000 in Japanese auctions for examples in good condition with low miles or less money for daily drivers. Old Crowns are worth more than this in America, even with some miles on them. Besides, your car can’t depreciate $10,000 if you didn’t even pay $10,000 for it!