Buy New Practical Car or Invest in Used Luxury Car?
September 20, 2010 6:35 PM   Subscribe

Buy a new car or an older used luxury (BMW, Mercedes) car?

I'm about to come into some money and I need to replace my current car. I'll have about $20,000 to spend on the new car for me.

However, having watched too many episodes of Top Gear, I'm having this strange idea. I have this thought that instead of buying a new car, I could buy a cheaper used luxury car for about $10,000 (yes, high mileage) but then take the other $10,000 and give it to a mechanic shop to fully overhaul the car.

So what's wrong with this idea? I'm thinking that I must be nuts to do this but the idea is really exciting to me.
posted by pxharder to Travel & Transportation (22 answers total) 4 users marked this as a favorite
I like your plan BUT...

>don't throw that 10k upfront. keep it in a 'repairs account'
>maintenance on a totally boss $10k german car could run $2k/year

keep that in mind
posted by weaponsgradecarp at 6:41 PM on September 20, 2010

Yeah, I have a 10-year-old mediocre European sedan (Volvo S-80) in pretty good shape with relatively low mileage for its age and routine maintenance is between 1500 and 2500 each and every year. (I hate my fucking car.) Am actual luxury European sedan will likely cost you even more than that.
posted by dersins at 6:44 PM on September 20, 2010

I drive a 17-yr old BMW, ~150K miles, but I'm spending about 2k-3k a year in maintenance. Engine overheating light just went on, I'm sure that's a thousand bucks.

On the other hand, it's a BMW.
posted by orthogonality at 6:50 PM on September 20, 2010

fwiw, I bought a mid-90s 5-series a couple years back. Maintenance has been ~$1500/yr.

My dad's late 90s 7-series has (averaged out) been more like $2500+ a year. Biggest difference between our cars? Mine came with full maintenance records that showed a good maintenance history. His did not.
posted by weaponsgradecarp at 7:00 PM on September 20, 2010

You could go the other way, look more at the Japanese luxury brands. For instance, Acura: you get the retarded-reliable Honda backing, with a few more tweaks.
posted by notsnot at 7:12 PM on September 20, 2010

Best answer: I agree with the people saying to keep the extra 10K in a savings account. If you have any desire to own a BMW, Merc or similar you absolutely must do so while you have this much flexibility. You won't regret it.

Everyone, and I mean everyone, should get to see what the fuss is with owning something as well made as a BMW or a Mercedes. Between my friends, my dad and I we have had many different BMW's over the years - from 1988 cars to modern ones and through the size range - and honestly if you've never lived with one, you never quite fully appreciate why people spend the extra money for one.

I mean, everyone knows that a more expensive car is better, but the ways in which it is better, and the nice little details that you only notice after several months driving a car are a whole source of enjoyment of ownership that you just don't get in run of the mill cars. The difference in Engineering between a BMW and a Ford or a Chevrolet is truly cavernous.

Also, while people are correct in saying that it can cost 2-3K a year to maintain one, that doesn't mean $2-3K a year more than a new car. It's possible that a 6-8 year old BMW will cost much the same as a new car in maintenance anyway (especially if you buy just after the first major service interval) as you can go to non-dealer specialists rather than pay full dealer price. Even if it doesn't, you have your $10K buffer to help you through. BMW's in particular have a solid following and you can save a lot of money going to ex-BMW mechanics that have set up on their own. They'll still use Genuine BMW parts (don't scrimp on that) but the labour costs are much less.

Do it. No question.
posted by Brockles at 7:17 PM on September 20, 2010 [2 favorites]

Big gamble! Are you comfortable with that?

First of all, don't buy a car that NEEDS a lot of work. Save the $10k for when you really need it.

Check used car reviews, owners' group websites etc for the nasties that each model inevitably has, and the best fixes/workarounds etc.

In some ways, the older cars are better than the newer ones because the more recent of the 'older' cars are more laden with gizmos that can fail. If possible, select a model that has more basic equipment to minimise that risk.

Best advice I can give is to do a lot of homework selecting the make and model you want, ensure you know as much as possible about that car by researching especially being active in asking questions on the relevant websites, and then be very selective in choosing the particular example you buy.

Good luck!
posted by GeeEmm at 7:17 PM on September 20, 2010

Best answer: If you're still considering buying an older car, you need to watch this video.
posted by halogen at 7:22 PM on September 20, 2010 [4 favorites]

My advice is to buy the older luxury car for ~$10k: but make it an Acura or Lexus. I know, I know, they're a bit stodgier than the Germans. But if you can find an older Acura TL-S with a 6-speed... that'd be pretty great, right? It's a sporty, powerful, comfortable car. And you can more or less bank on whole years being trouble-free.
posted by CutaneousRabbit at 7:24 PM on September 20, 2010 [1 favorite]

If you're not at least a little bit of a work-on-your-own cars type, and you're also not at least a little bit rich, I don't think a high-mileage European luxury car is the right choice for you.
posted by box at 7:40 PM on September 20, 2010

Also, your question contains the word 'invest.' There are exceptions, but, generally speaking, a daily driver is something that, no matter how much money you throw at it, it's still depreciating, and every time you use it, you're contributing to its depreciation. That's not an investment vehicle.

Don't get me wrong--I'd totally rather drive an old Beemer or Benzo than a new Ford Focus or whatever. But if my first concern was money, I'd buy an old Corolla or Civic (or keep the car I already have) and then put the rest of my twenty grand in a real investment.
posted by box at 7:46 PM on September 20, 2010 [1 favorite]

I know the feeling and I went with a Lexus LS400. Replaced the starter & love everything about it except the nakimichi stereo (broke! Thanks McGrath Lexus - you totally suck!).

If you want something with a manual and is reliable & relatively modern I would suggest an Infiniti G35 to mash the gears, it will be around 12-14 000, but worth it. I've only seen the stick on a two door.

IF it's going to be a Mercedes, well, I would just get one the wide body jobs (s class), otherwise they are really like a toyota (the e class is a taxi in many places). Sensible option if a little expensive up front for a nice one.

BMW: Avoid like the plague any 7 series offering that you can afford and anything with that stupid I-drive. I would suggest the M3 (like this little local jobby, or the BMW 335i, which is sadly out of your price range but the 328i isn't, and they are pretty snappy. Get one with a stick.

Acura's: front wheel drive. Get an S-2000 instead (but please don't drive like a lunatic).
posted by zenon at 8:27 PM on September 20, 2010

As the owner of a 1993 Mercedes (which I love) I suggest you narrow down to what you think you want, then find the appropriate enthusiast message board and ask what you can expect if you buy that model. For example, on early 90s Mercedes, the wiring harnesses almost always have to be replaced, and that's a grand. I found that out after - should have consulted a message board.
posted by symbebekos at 9:14 PM on September 20, 2010

We have a vintage BMW and while finding parts is easy, and finding experienced mechanics is easy, and doing some of the work yourself is easy if you have some basic auto mechanics knowledge and the necessary tools and equipment--it's a timesuck and a moneysuck. I swear to God that Mr. Padraigin will either be buried in that car or I will be setting it on fire in a fit of pique some day. Every time I turn around it's either a thousand bucks at the mechanic or five hundred bucks and a month of weekends we could spend doing something else.

I would strongly suggest thinking Japanese. It doesn't have to be an Accord or a Camry, it could be one of the luxury nameplates and you would still benefit from the high quality and great ride but lower expense of maintenance and repair.

Hell, if it were me, I'd be looking for a tricked out Subaru that's only a few years old, that I could feel confident about driving with minimal maintenance until my hair turned grey.

You should take some time to research, and do some test driving, and think about what your long term needs really are in terms of options, handling, and reliability. Practicality and luxury do not have to be mutually exclusive--there are Acuras on the road with 200,000 miles that have had nothing but basic maintenance and a new clutch and go down the highway like a hot knife through butter.
posted by padraigin at 9:32 PM on September 20, 2010

You know, Top Gear road tests old European luxury and sports cars all the time as part of the various challenges they do where they have to buy old cars and do stuff with them. And it never goes well. Ever.

They do, however, always do it on a seriously shoe string budget. This is not what is being discussed here. In addition, they always pretty much put the cars they buy through hell. That is not at all a representative means to judge old cars. It is also not very relevant in judging the merits of the OP's plan in the real world.

Anyway, back on point: Two years ago, just to put an other option out there, I bought an 8 year old Jaguar XJ8. The thing hasn't missed a beat and needed anything other than oil and tyres in the whole time I've had it. It is super smooth, relaxed, a joy to drive (although not in the same dynamic class as a BMW other than showing it a thing or two in ride quality) and I haven't at all regretted the purchase. I love that car. $10,000 is a very, very respectable and realistic budget for a good quality second hand luxury car. A decent amount of research and brand knowledge (I agree with cutting your options down to one or two cars you really, really want to own) before you do your shopping.

Personally, I'd consider any of the following that fall into budget (adjust year and mileage to suit the budget:

BMW 5 series (upper end engines - 535 to 540 plus M5 if you can in any way justify it)
BMW 3 series (328 and above plus M3 if you can in any way... etc).
Jaguar XJ8 (Not X-type - these are not at all representative and are, in Jaguar terms, a serious disappointment to the marque).
Mercedes (stick to the upper reaches in terms os size and engine again - steer clear of the ones that could have been aimed at high level fleet jobs, like the BMW examples).
I'd consider Lexus, but certainly not over a BMW or Merc.
Range Rover - only because I love them. They're not all that practical, let's be honest.

Pick a model or two and do your homework. Trawl forums for the problematic models and engine options and avoid them. Choose wisely, reap rewards.
posted by Brockles at 9:40 PM on September 20, 2010

Going against my better judgment, I'll recommend getting the used luxury car, under the condition that you actually start learning how to maintain the vehicle to a reasonable extent yourself. This includes oil changes, belt replacements, fluid replacement, switches, latches, etc.

Also, you need to find a good, reputable repair shop before you buy your car. If you don't have any reputable repair shops nearby, forget it. (I can recommend a good, reputable, fair Mercedes repair shop around Los Angeles.)

Research the hell out of every car you consider. Find as much anecdotal evidence as you can. My anecdotal evidence is that older BMWs, save for a particular swath of 5-series in the late 1990s, are cheap for a reason. And Mercedes from the 90's are fairly decent, C, E, S, SL, but make sure you get one with a good maintenance record.

I guess it also depends on how old of a car that you want. Keep in mind that older cars drive like older cars, and they won't have most of the amenities you might want, like an MP3 player or working air conditioning.

Have fun. I am not a car guy, but I did a lot of research before I made my last purchase, and I definitely considered an older luxury model. I opted for a new Mini Cooper S instead, and don't regret it a bit.
posted by jabberjaw at 9:54 PM on September 20, 2010

I have a little flow-chart for determining whether or not to buy an old German car. It goes a little like this:

Do I have unlimited financial resources and a second vehicle?
[YES: Buy the car]
[NO: Do you have years of experience and tools amassed to repair German vehicles?]
[Yes: Do you have any friends of hobbies] ---> [YES: Do not buy the car] [NO: Buy the car]

So, as long as you're a friendless, German-experienced automotive technician with time to dedicate to fixing your car, or have a second vehicle and a budget to fix your oldie, feel free to buy the car.
posted by Jon-o at 3:58 AM on September 21, 2010 [1 favorite]

Choose wisely, read message boards, don't buy the first year of any major redesign and you should buy the 'German' luxury car.

Just, for the record, 'luxury' is a bit of a misnomer here. Some German cars are shit, too, they are just better engineered shit than other cars you might typically think are shit. But they are still shit. Do your research and you can get a terrific car for very little. I bought a ten-year old BMW 520i wagon about five years ago and I loved it silly. Unfortunately as I live in a country where gas costs money, unlike America where it is relatively cheap, and the car used lots of gas I had to sell it. A terrific car though and as soon as my current car, a volvo v70r that is a maintenance nightmare (remember that bit about design change years?), dies I will look to get another one of these 'luxury' cars.
posted by From Bklyn at 6:30 AM on September 21, 2010

If you really really want to drive something like a BMW get a used one that doesn't need repair (for around 10K) then keep the rest of the money in the bank for emergencies.
If not get a used (2-3 year old) car ( if possible something like Lexus or an Acura)
There's absolutely no point in buying a brand new car, since they tend to loose about 10% of the value as soon as you drive it off the lot.
posted by WizKid at 8:00 AM on September 21, 2010

2nd Generation G35's (07+ Sedan, 08+ Coupe) are tremendously fun with Nissan reliability. Most low-mileage off-lease examples can be found for just above $20k but are still in remarkable condition, some with warranties.

The warranty comes in handy as there were some things that Infiniti covered 100%: brake rotors (juddering), interior trim and exterior weather stripping.

I came from a VW Passat because I couldn't deal with German repair costs/reliability after 120k miels. I won't be spending big bucks repairing the G for at least another couple years when it gets to 60K. And all the windows, door locks, sunroof and cruise control work! Take that European car electrics!
posted by ijoyner at 8:34 AM on September 21, 2010

I did just that and i've not regretted it one bit. I bought a 2004 mercedes ML350 inspiration edition with 60k miles for under 14k. My budget was 20k for a car, new or used. I knew i wanted an SUV or a minivan (the mom in me.) My mercedes was LESS than comparable Honda pilots/toyota forerunners and WAY less than the sienna/oddysey minivan. Just do due diligence. You'll be surprised at the deals that can be had for "German luxury cars."
posted by ramix at 12:11 PM on September 21, 2010

I'm confused here -- surely $20k doesn't mean getting some 1993-era monster that will cost a fortune to run and then break. A quick look on found this 2005 BMW 3-series with only 40k on the clock.

For cars like this, that's practically new. Go buy one like that.
posted by bonaldi at 2:42 PM on September 21, 2010

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