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These nice toys drop in value quickly. How do people manage this? Do you keep you car for only a few years then flip it, or keep it for the long haul and just wear the diminishing value. I assume lux car owners are likely smarter or more business minded than many so would be keen to hear how you manage this. How long will you keep it, what then, and why then? Keen to learn from the best!
 

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I don't look at this car as a toy. It's a utility tool that's made to be used.
I put 186,000 miles on my last car, a 2012 Cayenne that I bought new. I sold it and bought my current Macan.
It's a fun and speedy tool though!
(BTW, I'm looking forward to spending a few weeks in Port Douglas at the end of July!)
 

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First post here, but I'll bite.

Cars are melting ice cubes of depreciation - you're always going to be exposed to /some/ unless you've got a true collector piece (read as hundreds to low thousands produced) and you only have collector levels of miles on it (read hundreds to maybe a couple thousand), AND you're in it for the long haul. Even cars that are 10+ years old and have appropriate mileage from continual use will depreciate with declines in condition and increases in mileage.

Point 1: It helps to buy right - i.e. as cheaply as possible. Every market is different, and especially in Australia you're exposed to tons of markup and duties that folks in other parts of the world aren't. Getting as much of a discount as possible if you're buying new is important.

Point 2: Acquire based on the horizon of depreciation you're comfortable being exposed to, and in the most tax-advantageous way possible. Leasing in many countries around the world allows for you to write either a significant portion or almost all of your expenditures on the car. In Australia, novated leases are a very attractive way to bundle any car allowance your employer offers along with all of your other costs. In most states of the US, if you understand how much you expect to drive the vehicle and you prefer to have new ones every couple years, leasing makes a ton of sense - because you're only paying the sales tax on the portion you use, and you're essentially "locking in" the amount of depreciation you're exposed to.

Point 3: Use every incentive in the financing scheme available - High volumes of unsold units in model years close to changing over will get the manufacturers applying incentive dollars to get the vehicles transacted against. Security deposits (even if not required) placing available cash as refundable collateral at the end of lease term can significantly lower the effective interest rate during the term of the lease. Research the options available to you thoroughly and use every one of them that you can.

Point 4: Acquire somewhere lower on the depreciation curve from new - Letting someone else shoulder the burden of initial depreciation is just smart. Sure, it's not "new" but do you /really/ care? This may exclude you from using leasing, depending on what local leasing companies offer - for example in the US most used car leasing costs significantly more than leasing something new.

Point 5: Have more than one car, and don't drive too much - Mileage is the only factor in depreciation under your control. Yes, the whole point of _having_ these things is to drive them, but if you're concerned with depreciation, the only true variable in your control is keeping mileage down or spreading it around.


Most of this holds true for exotics, though many of those manufacturers offer different programs to high net-worth individuals that incent repeat acquisition. Hope this helps.
 

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After the https://www.macanforum.com/forum/members/boredbold.html story I am now terrified of running my Macan after the warranty runs out. His story dropped a bomb that was half the value of his car on him. Either I have to buck up and buy an extended warranty or convert those bucks into a down payment for another car/truck. On one hand the extended warranty dollars follow an old car down the depreciation chute but on the other hand putting those bucks into a new rig just starts the accelerated depreciation all over again. Otherwise, it is sleepless nights waiting for the transfer case to die or the PDK to fail or the air suspension to get a flat or in boredbold's case a destroyed engine. Another lousy option is to buy my 29 year old Pathfinder back from my girl friend.
 

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With few exceptions if you tend to flip cars, in the end you pay dearly for the privilege.

Best way to minimize depreciation expense is to go CPO with the great warranty, maintain the car well, and keep it for a long time.
 

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I think we all are keen business people, otherwise we could not drive our P-cars. But everytime I trade in my cars, It feels like it is the most stupid transaction I could perform business-wise... But then the ❤ kicks in and I lose all my Keen Business Sanity and enjoy it!
 

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Like age & death - depreciation/value loss are facts of life.....
little you can do to alter the path....

Not to say we don't all try !!!

I buy Demo's CPO's . less than 10k miles...
that eases the pain somewhat
I have taken to a 5-6 yr trade term... I keep them longer than I used - but I drive less too.

The biggest drop comes at the front -- it eases as time goes by.... but a drop, nonetheless
 

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I usually trade a vehicle in after two years or so...cars are toys to me, I get bored easy, and I always want the latest shiny new toy that comes out.

That said, I actually still like my 2018 Macan GTS, and I just might keep it longer than two years, but will definitely trade it in before the standard warranty expires.
 

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Expensive car depreciate fast and a lot.
The more options you tick on ordering. The more you will loose.
Out of warranty cars that are worth 1/4 of their purchase price, still repair as a percentage of their original cost.
$2K for brakes on a $80,000 car or a $20,000 car?

I try and buy gently used, and under mileage, with manufacturer extended transferable warranty.

Take my mom's 2oo3 BMW 745. She paid $125,000 car is worth $8000 now. 16 years @ 609/month.
She just had an oil pan leak. It cost her $1000 to fix it. More than a new car payment.
It needs to go.

My Macan will be sold/traded at under 100k, or 4 months before the cpo expires.
 

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My view is very different, I view life as if I am only going to be here for only a short amount of time, meaning at any single moment my life could end, for a variety of reasons.............so that is how I view things.

So while some stress over losing money on a vehicle and try to mitigate that as best as possible I live my life everyday like its my last.

Some work their entire lives, scrimping, saving, not enjoying a nice car, a nice grand vacation, nice food in a fine restaurant, or ever want to drive a nice vehicle because they worry too much about its cost, if you cannot afford it and don't want to lose any $$$$$ then watch it in your bank account.

When we go, and we all will, whomever your heirs are will appreciate how you lived your frugal life worrying about not enjoying it while they are out enjoying your $$$$$$ that you didn't spend.

So buy it or don't buy it, I can afford it and earned it, and I spend it, so I enjoy life to the fullest it every single day.

I just dropped over $100k on a new Z06 Corvette Convertible, and I love driving it every single day............and its already lost value and I could care less.

The goal is not to look at it, not to view it as an investment, or a vehicle to make money on, its to be driven.........ya never know when the big man upstairs is going to call in your chit, and he may call it in when you least expect it.
 

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My view is very different, I view life as if I am only going to be here for only a short amount of time, meaning at any single moment my life could end, for a variety of reasons.............so that is how I view things.

So while some stress over losing money on a vehicle and try to mitigate that as best as possible I live my life everyday like its my last.

Some work their entire lives, scrimping, saving, not enjoying a nice car, a nice grand vacation, nice food in a fine restaurant, or ever want to drive a nice vehicle because they worry too much about its cost, if you cannot afford it and don't want to lose any $$$$$ then watch it in your bank account.

When we go, and we all will, whomever your heirs are will appreciate how you lived your frugal life worrying about not enjoying it while they are out enjoying your $$$$$$ that you didn't spend.

So buy it or don't buy it, I can afford it and earned it, and I spend it, so I enjoy life to the fullest it every single day.

I just dropped over $100k on a new Z06 Corvette Convertible, and I love driving it every single day............and its already lost value and I could care less.

The goal is not to look at it, not to view it as an investment, or a vehicle to make money on, its to be driven.........ya never know when the big man upstairs is going to call in your chit, and he may call it in when you least expect it.


Agree with you on that. I tend to keep my cars and buy ones that stir passion in me, so I don't pay attention to depreciation because I don't look at them as investment for anything other than smiles. And welcome to the SO club Ridge. Now you have run the gamut on orange Vettes!:D
 

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Agree with you on that. I tend to keep my cars and buy ones that stir passion in me, so I don't pay attention to depreciation because I don't look at them as investment for anything other than smiles. And welcome to the SO club Ridge. Now you have run the gamut on orange Vettes!:D

It is my 3rd Orange Vette, I had a 2009 Z06 in Atomic Orange as well.

I detest boring colors...........>:D
 

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Same boat...... I could care less about depreciation.

We both love to drive ..... cars are for fun.

The orange Vettes are nothing short of incredible .

2nd day of Macan ownership. Spent the day on the Tail of the Dragon yesterday.

Blue Ridge Parkway today ....as soon as we finish breakfast.

Thank goodness for passion.
 

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Glad to see you covered a MAJOR point that many miss re leasing

First post here, but I'll bite.

Cars are melting ice cubes of depreciation - you're always going to be exposed to /some/ unless you've got a true collector piece (read as hundreds to low thousands produced) and you only have collector levels of miles on it (read hundreds to maybe a couple thousand), AND you're in it for the long haul. Even cars that are 10+ years old and have appropriate mileage from continual use will depreciate with declines in condition and increases in mileage.

Point 1: It helps to buy right - i.e. as cheaply as possible. Every market is different, and especially in Australia you're exposed to tons of markup and duties that folks in other parts of the world aren't. Getting as much of a discount as possible if you're buying new is important.

Point 2: Acquire based on the horizon of depreciation you're comfortable being exposed to, and in the most tax-advantageous way possible. Leasing in many countries around the world allows for you to write either a significant portion or almost all of your expenditures on the car. In Australia, novated leases are a very attractive way to bundle any car allowance your employer offers along with all of your other costs. In most states of the US, if you understand how much you expect to drive the vehicle and you prefer to have new ones every couple years, leasing makes a ton of sense - because you're only paying the sales tax on the portion you use, and you're essentially "locking in" the amount of depreciation you're exposed to.

Point 3: Use every incentive in the financing scheme available - High volumes of unsold units in model years close to changing over will get the manufacturers applying incentive dollars to get the vehicles transacted against. Security deposits (even if not required) placing available cash as refundable collateral at the end of lease term can significantly lower the effective interest rate during the term of the lease. Research the options available to you thoroughly and use every one of them that you can.

Point 4: Acquire somewhere lower on the depreciation curve from new - Letting someone else shoulder the burden of initial depreciation is just smart. Sure, it's not "new" but do you /really/ care? This may exclude you from using leasing, depending on what local leasing companies offer - for example in the US most used car leasing costs significantly more than leasing something new.

Point 5: Have more than one car, and don't drive too much - Mileage is the only factor in depreciation under your control. Yes, the whole point of _having_ these things is to drive them, but if you're concerned with depreciation, the only true variable in your control is keeping mileage down or spreading it around.


Most of this holds true for exotics, though many of those manufacturers offer different programs to high net-worth individuals that incent repeat acquisition. Hope this helps.
This is a great summary. Very few people understand that sales tax benefits of leasing. Although Porsches are notoriously horrible cars to lease (terrible MF's and rates compared to BMW and the like), you DO save sales tax.

Math example: You buy an $80K car in a municipality with a 7% sales tax rate. You pay $5600 in sales tax. If you LEASED that car for 3 years and, say, the residual was 60%, you would only pay sales tax on $32K or $2240- instant savings of $3260...and some additional savings in that you pay the $2240 over the 36 months of the lease.

When I leased my Cayenne eHybrid, I figure that I saved nearly $5500.

The other way to manage depreciation if you prefer to buy vs lease is to BUY CPO!

I bought my 2018 Macan (MSRP $64K) CPO with only 5K miles, longer warranty than new, and paid just under $50K for it---let the 1st owner take the big hit!
 

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I just got my Macan last week and my plan is to keep the car for at least 7 years, hopefully 10. So I look at the cost of the car over the length of time I plan to own it and for a long term owner like me, I feel that even if it depreciates significantly I've enjoyed the heck out of it and that makes it all worth it. Since the car will never appreciate, the value to me is less about how much residual value it holds and more about how much I enjoy the car over the length of ownership.

In other words, if driving it less will reduce depreciation, I would rather drive it more, enjoy the car, and accept the higher depreciation.
 

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Like age & death - depreciation/value loss are facts of life.....
little you can do to alter the path....

Not to say we don't all try !!!

I buy Demo's CPO's . less than 10k miles...
that eases the pain somewhat
I have taken to a 5-6 yr trade term... I keep them longer than I used - but I drive less too.

The biggest drop comes at the front -- it eases as time goes by.... but a drop, nonetheless
^^^WW... I believe I’ve come to the conclusion this is where I currently am with buying.... I still don’t really like nor want to lease... I used to change cars every 2.5/3 years, but now it’s more like 4-5... I like some luxury, and some sport, so I’m in the price ranges of $50K or higher... but the practical side in me just won’t let me spend $70K+ on a car. I do just fine, but there are other areas to spend (or invest). I would love to, but I just cannot... at least not at this stage in my life.

My view is very different, I view life as if I am only going to be here for only a short amount of time, meaning at any single moment my life could end, for a variety of reasons.............so that is how I view things.

So while some stress over losing money on a vehicle and try to mitigate that as best as possible I live my life everyday like its my last.

Some work their entire lives, scrimping, saving, not enjoying a nice car, a nice grand vacation, nice food in a fine restaurant, or ever want to drive a nice vehicle because they worry too much about its cost, if you cannot afford it and don't want to lose any $$$$$ then watch it in your bank account.

When we go, and we all will, whomever your heirs are will appreciate how you lived your frugal life worrying about not enjoying it while they are out enjoying your $$$$$$ that you didn't spend.

So buy it or don't buy it, I can afford it and earned it, and I spend it, so I enjoy life to the fullest it every single day.

I just dropped over $100k on a new Z06 Corvette Convertible, and I love driving it every single day............and its already lost value and I could care less.

The goal is not to look at it, not to view it as an investment, or a vehicle to make money on, its to be driven.........ya never know when the big man upstairs is going to call in your chit, and he may call it in when you least expect it.
^^^This I can relate to; I’ve spent most of my adult life living by this creed. And I’ve made plenty of bad decisions because of it... many of them car or motorcycle related. But nonetheless, it’s how my brain is wired. I always told people “I guarantee I’m the one who’ll be 45 and the doc will say ’Sorry Kris... but you only have 6 months’...”... And I refuse to be the guy who looks back and says “whelp, glad I spent the last 44 years playing it safe and saving all my $$$.”

Instead, it was my sister who got that speech. She passed away in March of this year... she was only 3 years older than me.

Depreciation is a hard topic for people who are practical-minded to get a grasp on; Especially after owning three 4Runners in a row (I.e. - one of the least depreciating cars on the market). But at the end of day, in my current situation, I buy what I want to drive and enjoy each and everyday. Life is too short, and it will sneak up on you when you least expect it. Happy Motoring! :D
 

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Good point, but to get an accurate comparison of sales tax treatment of leasing versus buying, don't you need to take into consideration the sales tax credit on trades ins, assuming you lease or trade in 3 years? That credit is available in most U.S. states.
 
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