When I bought my 2021 BMW i3S, I knew it was a less-than-optimal financial move. In fact, my article on the purchase was titled “I Bought The Holy Grail Of BMW i3s Even Though It Was Probably A Terrible Financial Decision.” And yet, I went through with it, and every month since, my car’s value has dropped. It stings.
Other than my Moab off-road projects, I’ve never lost a penny on a car. Why? Because historically I’ve bought old junkers — oftentimes severely broken ones. These cars were dirt cheap, and solely by getting them running and driving I significantly upped their value.
Take my 2000 Chevy Tracker. At $700, this thing was dirt cheap, and so were all the parts. The water pump was $27, the harmonic balancer pulley was $20, the ECU was $100, the CV axles were $34 apiece — ridiculous. I probably had a couple of grand into it when I let it go for $3,450.
That salvage-title 1991 Jeep Cherokee XJ I bought for $2000? Well, I did have to replace literally every part on it, but I managed to get $7000 for it, which was more than I’d put in it (not accounting for labor).
Then there’s the minty-fresh manual 1993 Jeep ZJ five-speed that I bought for about $3000 and sold for $9,500 after probably pumping $2,000 into it:
There’s also my old Willys FC, which had cost me $1,500 (plus probably another $1000 in parts and fuel), and which I let go for $4000:
I also bought a 1979 Jeep Cherokee Golden Eagle for $2000, spent probably 4 grand on parts and on transporting it across the country, but ultimately got $8000 out of it.
And when I bought the cheapest BMW i3 in the country for $10,500, only to have BMW install a new battery and compressor, I knew I’d come out OK even though i3 prices were dropping like a rock. I managed to sell the vehicle for $11,300 in the end.
You get the idea. I buy cars with problems, and I trade a bunch of my time in order to then sell them with fewer problems for slightly more money.
That’s why purchasing my “Holy Grail” 2021 BMW i3S has been such a hard pill for me to swallow. I paid $30 grand for this thing, which itself was $27,500 lower than MSRP. So it’s not like I bought the car at the top of its depreciation curve, but I definitely didn’t buy it at the bottom, either.
Carvana has a “Value Tracker” that I’ve been looking at ever since buying my car. I recall the car was, per Carvana, worth ~$28,000 when I bought it for $30,000 (plus shipping and fees — in the end, I probably spent $34,000). You can see that now the i3 is worth, per Carvana, $22,000:
Obviously, Carvana isn’t the arbiter of used car values, but KBB puts the value somewhere between $24,000 and $28,000:
Both of these values are mileage dependent. Look what happens when I plug in 50,000 miles on the odometer instead of 25,000:
And when the mileage hits 100,000, the values tank even farther.
Obviously, value dropping with mileage is unsurprising, but this is just new for me. I’ve never owned a car that lost value over time/use, so just watching that Carvana graph and that KBB “private party range” drop and drop and drop — it’s hard!
Could I have bought a higher-mileage 2019 BMW i3 with a different color and maybe the same interior? Sure. And I think a more rational version of me would have bought that 62,000 mile white one on Carvana for $22,000. Sure, it had 2 years and 40,000 miles less on its CARB warranty, and it wasn’t Galvanic Gold, but $8 grand is a lot!
So I did, the one time, splurge a bit. Still, despite that prevailing guilt, I take solace in knowing that this i3 purchase was an anomaly. I’m not in the business of buying depreciating cars. I bought that particular i3 because it’s extremely rare (possibly 1 of 3 in that configuration on earth), meaning me waiting for it to depreciate would have meant not owning it at all. Also, I don’t plan on selling it ever; it is, in my view, the very best version of the greatest city car ever built — it’s truly perfect for Los Angeles. What’s more, it’s absurdly reliable, costs almost nothing to operate now that I have dirt cheap tires, and most importantly: I’m almost a year in, and I remain completely and utterly obsessed with this machine.
Still obsessed with this car. pic.twitter.com/1rSYnhEtDr
— David Tracy (@davidntracy) October 12, 2024
Six months later my ’21 BMW i3S, which gets about 5mi/kWh in the city and 3.5 on the highway, remains one of the best cars I’ve EVER driven.
Why? Because of how beautifully it fulfills its intended function (be the ultimate city car) without being boring.
I remain obsessed. pic.twitter.com/U2ap9GJQVn
— David Tracy (@davidntracy) December 9, 2024
I don’t plan to buy another depreciating car pretty much ever. Maybe I would for my wife, who may want something safe and newer, but I myself don’t really see a reason why I would need to go down that path again. The odds of another hyper rare, absurdly over-engineered car that’s truly the perfect daily-driver my living situation popping up is pretty much zero, so I’m happy to go back to buying 10+ year old cars.
If Scout decides to get rid of the bench seat option on the Traveler after the first model-year (and there’s no indication it will, it’s just a recurring nightmare of mine), I might be tempted. But assuming that doesn’t become a hyper-rare option, I’ll just wait until the Scout is 10-15 years old before dropping cash on it, because I’m not sure I can deal with this guilt anymore. And more importantly, I already have the daily-driver of my dreams right here in my driveway.
Top graphic images: BMW; depositphotos,com
That *sad trombone* sound you hear in your head? That’s the soundtrack of Adulthood. That said, somethings are just hard to quantify and value with dollars. If you can afford it and it makes you happy, stimulates your mind, keeps you from sleeping on the sofa . . . it was worth it.
This, in spades!
I read sad trombone and immediately thought sad tromboner. At 60+ juvenile jokes make me laugh.wah wah
I used to be like you, and sold cats for what I paid or more. But then I started buying cars for reliability (BMW excluded) and comfort, and because I could afford newer, cooler stuff.
Then I had kids. All of a sudden safety and reliability became VERY important. And space. I can’t take the risk of a dodgy rust repair or being stranded on the highway with my kids.
It’s fine to have hobby cars, but if you have kids, you don’t want to take chances. I assume Elise won’t want to either.
Right there with you on the kid situation. I Usually had one slightly newer, reliable car and a bunch of older crap that really shouldn’t have been road worthy. But now that I have my son, the last crap car I had and was working on restoring got sold and picked up a new car to cover work and safely take him places. It’s still a fun car, but not the junk I was used to.
Clearly the correct answer is to not have kids!
This is also the cheapest option!
And likely best, given the state of the world today.
If you want to save your money for crap boxes then yes, don’t have kids. But if you want a little helper to hold the flashlight everywhere that you don’t need it, then also don’t have kids!
lol
“I used to be like you, and sold cats for what I paid or more”
I dunno… how do you make money selling cats when the local humane society is giving them away for free?
:-p
I guess there is good money in “cats”. I heard that that they full of precious metals like platinum, and that people steal them all the time.
I’d like to know more about this used cat business.
Well I’ve been told they don’t abide by the laws of physics. Perhaps that applies to economics too??
The answer is volume.
Look at it this way: You’re so far ahead on the rest of your cars, that this i3 won’t ruin your car-mic karma that you’ve accumulated over the years with beaters and ill-advised projects.
Either keep this i3 forever until it maybe becomes valuable some day, or drive the wheels off, put the wheels back on then keep driving the heck out of it. Maybe you should aim to have the highest-mile i3 on the planet, at which point you either sell it back to BMW or sell it to a YouTuber, errr… sucker, and make money.
My wife buys new cars and keeps them for a decade, I used to buy cheap junkers and run them in to the ground.
The first 15 years we were together we actually spent the same amount on cars, but hers were nice, and mine caught fire three times, had a wheel fall off, had brake failure twice and always looked like shit.
I have a car, a (mini) truck, and a motorcycle while my wife has just one car (CUV). But her one car is worth more than my car truck and motorcycle combined, so we call that “even”.
Heh. Same for me. I run a three car fleet for myself and her one car cost more than the three of mine combined. But she loves her car and her happiness is worth it and my three cheaper vehicles serve all my varied automotive needs, so it’s all good.
As you should! Also, my father always drove the most practical car possible for years while my mum always had a new or newer nice car to drive. They were happily married for almost 50, until his death. Like they say, happy wife happy life!
How can we delete a post, if we still have time to Edit it? Everytime I’ve tried to just remove the content and Save, it says that it doesn’t have enough content.
You’re definitely an outlier car owner though. Depreciation is a fact of life for the vast majority of car buyers. Just be glad it’s not like Japan where your HOUSE depreciates too!
If you’re keeping the car for the majority of its useful life though, who cares about depreciation? If you love the i3 and drive it till the wheels fall of, depreciation isn’t a factor. My Mach-E has depreciated 38-50% in 3 years (depending on whether you include state/fed rebates or not), but I also love it, and we plan to keep it for at least another 7 years, at which point depreciation would have flattened anyway.
The people I see fretting about depreciation are those trading in their cars every few years and rolling underwater loans into new ones.
Those folks should be leasing.
Leasing really doesn’t change anything. For every new car I have bought, I have come out ahead buying vs. leasing, even for the cars I only kept a fairly short time. The accountant in me LOVES to track that stuff.
Honestly, they should just be taking a basic finance course and see how much money they are flushing away.
I’ve lost more on my current (main) vehicle in two years than my previous in 16. It’s painful, so I get it. I have no intention of selling it so it’s not a realized lost in my book, doesn’t always make it easier
Not sure any regular people ever break even let alone make money on late model BMWs.Maybe if you keep it long enough inflation will catch up so you feel good on paper. But the fuel savings is probably the best way to feel better about it.
In a vacuum, money has no value, but a car does because maybe the air will stay inside and you won’t suffocate.
-Jack Handey-
Isn’t the whole point to pour money into cars with no hope of seeing it again? Have I been doing it wrong all these years?
Buy high and sell low has been my MO for 60 years. The Capital Depreciation Fund has been working well.
David don’t sweat it, a car you are never going to sell never loses value. A car is worth what you can get for it so if you aren’t selling you aren’t losing. That being said I figure you and Torch need to start a TV SHOW modeled after Flipping Bangers. I am sure you know it, it is 2 British friend s who buy a cheap car fix it up and sell it. I know nothing about British currency but they buy around 1,500 pounds/quid/stones they use these terms interchangeable, except maybe stone and try to sell for 3,000.
Britain shouldn’t have decimalised (sic).
I once accepted an offer for the Bentley, a bushel of gold sounded good, really I should have demanded a 10% non returnable deposit.
I’m English. I don’t miss the bullshit currency we had before we switched to 100 pence in a pound.
My gran had a tub of threepenny bits (literally a three pence coin, and also rhyming slang for boobs) that we played shop with. I swear it put our maths skills back by years. I’d get 50 pence pocket money and go mad trying to work out how many threepenny bits it was. It was, of course, 40 threepenny bits to get to 50 new pence.
Stone is mass, it’s some random number of pounds (not the currency, because of course we use the same word for units of mass and money).
I imagine French spies sneaking over the channel and seducing us: “Bonjour, you know your pound is 20 shillings, and your shilling is 12 pence, and also your other pound is 1/14th of a Stone? Use our units, everything is 10 or 100 or 1000. Everything.”
Even the French pound is decimal! (Half a kg)
How about ‘bob’?
Bob=shilling.
This whole system was binned before I was born, so I have to Google it.
If you’ll excuse me, I’m going to go to my room and cry in Mach E.
I know leased cars rarely have equity, but I’ve never had a vehicle that’s over $10k in the hole. Tis a good thing we like the car, because trading it in for something else right now would make our payments skyrocket.
Same. If you exclude the tax rebates and state incentives I got, My Mach-E’s value dropped 50% in 3 years. It’s not quite a bad if you include the rebates, which effectively lowered the purchase price, but still.
Ours is nearly paid off, we happen to really like it, and we tend to keep our cars at least 8 years, so that’s staved off any concern about atrocious depreciation, but still.
Think of it this way David: all those beaters you bought, played with and sold off – you were dating. The i3 you married, and are planning to grow old with.
You can’t (or shouldn’t) put a price on love.
Well, there’s your problem. 🙂
You’re experiencing what [I totally non-scientifically calculate to be] 90+% of all car owners experience. It’s new to you, but that’s because you briefly moved your car-buying methodology over into the belly part of the bell curve. It happens. The important part is that you love the car and are enjoying it.
Also I doubt Carvana’s value estimation expert squad takes into account the new battery in yours. Now you can cheerily thumb your nose at their ludicrously incorrect valuation of your ideal daily driver.
The first i3 shows that a new battery has little value. A new battery + compressor turned a near junker with 12 inches of range into a car you could actually use for more than a Costco trip, and it only added $800 to the purchase price at selling time.
I fail to see how depreciation of this vehicle is any worse than the money pits of parts that you previously owned.
Think of all your previous junk-mobiles. The untold thousands of dollars in parts and time you put into them. You probably ‘lost’ more in parts/time/youth than had you just bought one decent vehicle and rode the depreciation curve like every other Joe Blow.
But it’s the journey that mattered. For you, at least. And for us readers.
Some don’t care about depreciation because it’s the price you pay for a newer vehicle that works reliably. They do whatever else they want to do and can count on a decent vehicle to do it. They don’t want bloody knuckles or dishwasher parts cleaner or eating shower spaghetti. And that’s cool too.
Enjoy the BMW and perks of living like a normal human (sort of). Don’t worry about the depreciation.
Exactly. As David gets older I suspect he will find his time more valuable than before, especially now that he has someone to share it with.
Did you pay capital gains tax on all those heaps you sold for a profit? If not, you have likely broken the law.
I could not care less about depreciation. It’s the cost you pay for getting use out of a vehicle. If you happen to luck out and have a vehicle not depreciate, that is just a bonus.
Hmm, I wonder if I could zero out my capital gains taxes by selling old cars? Probably not. 🙁
No, you don’t get to net out gains and losses on personal property.
Though I doubt very much he actually made any money on those heaps if he properly accounts for all the costs involved.
I kinda felt the same way about my Alfa. It was absurdly nice (by my standards) and I loved it as a good “grown up car,” but it was painful to see the depreciation. I got out of it breaking even and proceeded to buy yet another weird Fiat and it’s nice to be back in something that doesn’t make me quite so financially nervous. I don’t forsee myself ever buying another fancy newer car like that. In the case of the i3 though, if you never intend to sell it, watching depreciation is pointless. You’re just going through your responsible grown up person phase.
Maybe take a look at savings in fuel/maintenance costs to offset depreciation if you need to feel better. I figure if my bolt makes it to 200,000 miles without any major failures, it will have more or less paid for itself as compared to the vehicle it replaced. Over half way there…
If you’re not planning on selling it anytime soon, stop worrying about it. You are wasting perfectly good energy on pointless stress.
If you’re never going to sell it then it’s current value is meaningless. You’ve lost all that money.
If you wait long enough it’s value might go up again and it will also be meaningless because you won’t see a penny of that money.
Tracking the value of a car you aren’t going to sell ever seems like an exhausting route to unhappiness. Just stop tracking it.
It only matters if/when you sell it. and if that is not happening, then it doesn’t matter what the ‘sell price’ of the car is.
Just like the stock market over the last few weeks. sure you may be losing money ‘on paper’, but if you don’t need to sell today you have not lost anything.
David, your version of doomscrolling is very different from most people’s.
Chalk this up to a lesson learned about buying BMWs newer than 30 years old. We all make that mistake once or twice.
Piff, I have zero complaints about my pair of 2011s. My wagon that I bought new has barely depreciated $15K in 15 years (yeah RWD+6spd stick), and it’s probably going to start appreciating. My convertible I bought used has barely budged in value thanks to inflation. Both have been as reliable as sunrise and sunset. In fact the only “repair” my wagon has needed since the warranty expired is a battery.
The old ones were much, much worse. The good old days really weren’t that good. My stepfaher bought an ’83 528e new, a car that is roughly as complicated as an anvil. When it was the age of my cars, it had a stack of receipts that looked like the logbook of a Lear jet. The massively more scheduled maintenance alone it required was a huge difference.
We bought our Ford Territory SUV at the tail end of crazy COVID prices for AU$20k in late 2023. I’m a member of the Territory group on Facebook and have watched in mild horror at how much they’ve depreciated over the last 14-15 months, probably close to AU$4k. I think a lot of people who bought a car around that time are probably experiencing similar.
I was going to say wait until you get that Scout, but then read the last part. I was under the impression you’d reserved a launch edition or whatever they’re called…
I really don’t get the sentiment.
I had a lawyer friend say that my Nissan Leaf was going to depreciate a ton, which is correct, but that doesn’t matter to me as any new car I buy I’m going to drive the wheels off of and IF I decide to get rid of it in the future it’s more important that it goes to a good home than me making a buck off it.
As I put it to him: You talking about the depreciation of a car I don’t want to sell is like me telling you to take care of your remaining kidney so it’ll fetch more on the black market.
More likely than not IF I get rid of the Leaf will remain in the family as a family beater (as the old one is really old and really beat), or a friend of mine will get it as a cheap car.
The only thing I worry about when it comes to depreciation—and I own a Stellantis product so I know a thing or two about it—is if you get in an accident, you’re more likely to be a total loss, and more likely to be shocked by the size of the payout.
I don’t worry about that at all. Even if I have a note on a car, the downpayment and term are big enough and short enough respectively that I will NEVER be underwater on the thing. Once I have bought a car, it’s a sunk cost. Anything I get back out of it is a bonus.
That’s why I got new car replacement for my Leaf when I insured it, I hope I’ll never see how it pays out.
The only time that depreciation matters is the unintended conversion of an asset due to accident or theft. Then the insurance company will give you about 1/4 of what the car is worth to you. Been down that road with a couple of cars I bought new. The Civic had a trip to the moon on the clock, but it was a good runner & I loved driving it. The insurance for the 18 wheeler that took it out offered a hilariously low settlement that wouldn’t come near to buying another like it and in as good of condition. They give you base beater value for an enthusiast car produced in low numbers.
That’s exactly why specifically chose the option of New Car Added Protection which “ensures that you new car is valued at its original purchase price, rather than its depreciated value, in the event of a covered loss.”
Now don’t get me wrong, the $21,500 I paid for my Leaf probably won’t outright buy me any new BEV in the future most likely, but we’ll see.
Well, by the time the car got taken out, it was 13 yrs old and had 250k miles on it. I figured I saved the insurance premiums for the new car replacement and just bought another car.
Fair enough.