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
Closely following the value of a car you intend to keep for a while after only owning it for a year is the real problem here, not the depreciation. Why torture yourself? If this is how owning a “good” car affects you then stick to the beaters and fix-r-uppers.
Why cares?
If you want and enjoy a thing, and can afford it, the appreciation/depreciation shouldn’t matter.
I have never once made a car purchase, not expecting to come out on the negative side of it.
Even if I made a few bucks, I still sacrificed my time.
Are you an enthusiast or an accountant?
Do you buy cars for the love of the car or for the potential profit?
Sounds like the later for both questions.
I feel this. I’m looking to sell what will be my most depreciating cat I’ve had coming up and I have to keep reminding myself that this is how things are supposed to work. It’s a car that I bought in 2018 when it was about 4 years old and had 40k on the clock. Paid 27k which was a little less than half of the original msrp. Now after 7 years and with a little over 120k miles I’m upset that I’m looking at selling for 13-14k. I know this isn’t actually terrible depreciation but it still stings.
The difference in value doesn’t seem so bad when you consider that cost as the value you extracted from it at the time. How much was it worth to you to not have to walk several hours to work each day?
As the owner of a German Luxury Depreciation – it cuts both ways.
When I bought the Mercedes – it was 4 years old with 31K miles- and it was @40% off the original 60-something-K MSRP.
12 years and 93K miles later, it’s not worth 10% of what I paid for it if I were to sell/total it.
So we keep it, maintain it, and intend to drive it till the wheels fall off*.
*or we are forced to flee the country
I feel you. Paid about 55% of list for a near 4 yr old Bavarian capital destruction machine. I’ve driven it 80K miles and just about equal $ for California priced gas and parts. It might be worth $12k due to it being one of 3300 over a 3 model year run. I bought it knowing it would be the most expensive car I’ve ever owned per mile. I figured I’d waited 50 years for a convertible, I’d make it worth my while.
Don’t plan on selling it for a minute, so I don’t obsess about the depreciation. I had a 96 impala that I was “preserving”. It sat in the garage… a lot. I sold it 26 years later for about 40% of what I paid for it new, but it only had about 65k miles on it. Not exactly a sterling ROI. The Kraut Kar, i’m driving and enjoying.
Don’t worry; be happy.
I used to have a robotic largemouth bass that would sing this.
As others have mentioned, an honest look at the finances would include the hours you spend fixing stuff. Obviously, getting paid for creating content isn’t something most folks can relate to.
Being absolutist about depreciation is going to lead to a never-ending series of bad decisions because depreciation is real. It is better to recognize it and add it into your calculations so you can control it.
Driving a car is going to put wear on the car, which reduces its value. That is true of new cars and classics alike. In rare cases, a classic appreciates more in value than the miles knock-off, but that is so rare that chasing it is a fool’s errand. So you either need to accept depreciation or fight it by spending time/money that is as great (typically greater) than the value lost to depreciation. There is no free lunch, so don’t make decisions as if there is.
Just keep it forever… Then resale doesn’t matter one jot to you 🙂
Yo, hang on to the i3 until it becomes a classic. Make it your personal sunken cost fallacy, and keep it on the road for longer than any other i3 in the world. No point in monitoring the depreciation of a modern car, you know that line will be descending for a long time, and it will just make you sadder evey time you look at it.
Agreed.
Vehicles are not assets, those are collector items.
A BMW i3 is not an asset, it’s just a car with an average lifetime of [____] until it’s scrap metal.
Scrap CF and plastic*
If you do not intention to sell the thing, there’s no need to worry about depreciation.
I’ve been trying to figure out who david looks like till this morning when I seen his silly mugshot on his article.. that german guy in raiders of the lost ark who wears all black and who’s face melted towards the end of the movie..
Wow. Now I can’t unsee it!
Never seen that movie, but I have heard Justin Long and Rick Moranis.
> Never seen that movie
Color me surprised 😀
It’s a fun watch.
You definitely should! All three original Indiana Jones movies are super fun to watch, and Raiders of the Lost Ark may be the best one (for a long time I preferred the Last Crusade, but in recent years I have come to agree Raiders is the best one).
Justin Long and Rick Moranis on their own, I don’t see it. A mix of the two? Yup, totally. Never realised this until now!
I’ve always been the same, and bought cars at the right end of the depreciation curve, and sold them a little nicer, and for a little mor money than when I got them.
Then I bought a slightly used F-150 Lightning with 750 miles on it, and thought I would beat the curve once again. Yeah, No…Ford is not selling them by the 10’s of thousands, like they thought they would, and values have cratered.
But, two years later, I still love the damn thing. It’s as reliable as an Anvil. No oil changes. No coolant changes. No transmission fluid changes and no brake jobs. (OK Maybe at 150k miles or something). It’s stupid fast, comfortable, quiet, and still very capable at all of the usual “truck stuff”, except towing non-areo friendly trailers on the highway. They have to pay me $0.64 per mile for work. I charge it at home, and never buy gas.
It’s all a trade off. Electric cars are weird. The depreciation curve makes me want to cry, and then I drive it, remember why I bought it, and I just don’t care that much anymore.
When I feel that visceral need for some V-8 rumble, there is always something around that is older, decent looking and running, but still somehow still at least slightly broken, around to have fun with, until the next deal comes around.
Let go of the guilt, and look at the big picture. Fun cars are more fun, when they don’t have to be repaired before you have to leave for work in the morning, and you have something else that just works, and doesn’t cost $100 to fill up.
The older you get, the more valuable your time becomes. Things that weren’t worth the money to you 15 years ago, now don’t seem like such a bad deal, if you get your time back. It’s just human nature.
Don’t confuse price and value.
The price only matters when you buy and when you sell. The value is what you derive from the thing. You don’t sound like you ever want to sell this i3, so quit looking at the blue book for it! It’s a waste of time and unnecessary stress about a fictional situation.
It’s nice to see so many others saying the same thing I have been for years: If you’re not going to sell the car, the market price is meaningless.
Yes thanks. our cars usually end up in the junk yard so who cares about depreciation.
I fail to see the problem here. According to my understanding this is a car you plan to keep for quite some time, and you’ve extolled its virtues repeatedly here on the site. If you’re enjoying it and you can afford it, who cares?
Also, as others have noted you substituted monetary cost with (a massive boatload of) sweat equity in the past. Now that you’re a responsible married man with a business to run you’ll want to reserve your ever more limited wrenching hours to true passion projects. It’s fine, life changes and it’ll all still be good – just in a different way.
– Modern
– Vintage
– Classic
These are the 3 categories I apply to cars (subjectively).
The i3 is in the ‘modern’ category where the value is dictated by Carvana/KBB. A lot of your other cars you’ve discussed fall into the ‘vintage’ category where value can be calculated by monitoring sales on Craislist/Ebay/auctions. KBB can’t control the market rate on these. For example, my ’95 civic’s value is apx. $1,300. What clean good running 5th gen civic is being priced at 1,300? I’d love to know!
Then there is the ‘classic’ category where there’s just not enough info to determine the optimal value. Look at the situation with the CJ-3B. The value is what a buyer is willing to pay; not some “book value.”
In conclusion, the anxiety is a result of the car being in the former category, and the value being applied by some marketing company.
Drive the shit out that BMW, and enjoy it while scoping out the next deal in the latter two categories such as a $700 Tracker!
Not once have I ever looked up the depreciation curve on a car I’ve owned. It’s a purchase, not an investment. I buy lightly used cars and keep them for years. (Well, I leased the Leafs.) Enjoy your car!
I thought the whole point of making said questionable financial decision was to actually enjoy the purchase. Stop thinking about, it’s delicious cake. Enjoy eating it and no, you can’t also have it.
[eats galvanic gold cake]
Remember, without depreciation, you wouldn’t have as easy access to the many death traps you have owned over the years.
Depreciation is kind of a blessing and a curse: It allows us enthusiasts to buy once very expensive cars on the cheap. On the other hand, it allows us enthusiasts once very expensive cars on the cheap…
It doesn’t matter if you’re never gonna sell it. When are we gonna have more wrenching articles on the “overlanding” cat Jeep? Plus the other vehicles
Yea, and how about and update of the status of the Sienna the Torch has.
Offroading the i3 in Moab?
Are you completely sure that what’s killing you inside isn’t some kind of cancer or infection caused by exposure to the more profitable cars in your fleet?
DT, I’m willing to bet if you applied an hourly value to the time you sunk into some of your projects you would have lost some eye watering money. It doesn’t even have to be a significant wage, $10/hour. Always remember time is your most limited and valuable resource.
Came here to say the exact same thing. DT – you’ve probably never actually “made” any money on a car, but that’s OK! Cars aren’t investments! They’re beautiful works of art and transportation and that’s why we love ’em. Depreciation doesn’t matter unless you actually sell it, anyway, and I know you want to keep the i3 forever, so just forget about “value” and enjoy the cars for what they are.
A few years ago I bought a Volvo XC70 turbo in very good shape but with a bad fuel pump. I got it home on a flatbed trailer, fixed the fuel pump, repaired a few other minor issues, got it smogged and sold it for 1600 more than I paid for it. When I figured out my net profit and the hours that I had put into it, I made exactly minimum wage for my time.
The buyer was very happy with it, which counts for something, as does the sense of personal accomplishment for a shade tree/amateur mechanic.
You do need to keep in mind that many of the vehicles David mentioned were source material for his day job so they were what provided his gainful employment.
You are correct that time is limited and has significant value. However for David and others like him, reviving dead cars is recreation and something he would rather do with his free time than something like playing golf, or going to a movie. Additionally for at least some of them when repaired he used them for another of his favorite free time activities, going off road.
I still think if you added up all his time wrenching he’s making close to minimum wage.
I too would rather wrench on a vehicle than play golf in my free time but now that he’s married and has to consider another persons feelings/time into this equation now. Fretting over the value of a car that gives him time with loved ones is not something to stress over.
“remember time is your most limited and valuable resource.”
Right. For a hobbyist, a huge thing to also think about is opportunity cost. Every hour spent on a boring project is an hour not spent on a more fun one.
Technically the hourly wage you “pay” yourself is the same whether it’s a fun project or a tedious one. But in reality spending six months restoring a car you hate is six months taken away from restoring a car you love Or playing with your kids or going for walks or anything else you enjoy.
This. I don’t do anything in my spare time that doesn’t give me enjoyment. If I applied my hourly rate at work to anything I do myself, it’s mostly cheaper to pay someone else to do it.
You could re-title this post as a life lesson.
Buys rusty brake drum of vintage Jeep and DNA sequences it into…into…something.
Spends a little more on something that resembles (from 100 ft away) a functioning vehicle.
etc etc.
Eventually ‘invests’ in something with potential then realizes his portfolio looks like a hillbilly bank vault out back and on the front lawn.
Learns first real life lesson, grows up and gets married and understands why cheeping out is the wrong approach.
BTW – wives don’t depreciate, but they don’t always appreciate your car parts hoard either. Be a good boy and keep the dishwasher clean.
Also. And I repeat also. You bought the i3 to make money? I thought you bought it because you liked it. I’ve had some amazing expensive meals in my life, but never expected to get my money back after I ate half of them.
> I’ve had some amazing expensive meals in my life, but never expected to get my money back after I ate half of them.
This. Isn’t David a Millennial? I thought Millennials were supposedly into experiences over possessions! This i3 is an experience. A different one from his customary shitbox rescue, to be sure, but that’s what it is.
One place I worked, people would call a couple of days later to complain there was some problem with their purchase.
It was rather like they ate a four course meal at the most expensive restaurant around, stuck their fingers down their throats to barf, then complained how horrible the meal was, asking for a replacement meal.
I’ll never understand that mentality, but there you go.
If the food was bad, why do you want it again.
Love the meal quote.
Cancelled that Scout order already eh? I wonder how many others have done the same.
I still have mine in, but don’t really expect to actually receive the vehicle.
Same. Still have mine in.
I hope you guys do! If I was more into off-roading I’d be quite interested too. If they can build it as well as they designed it you might have to get more accustomed to depreciation David.
Depreciation is only a problem if you ever sell a car.
I generally hang on to cars until they are un-sellable then give them away.
Actually I sell them for one dollar because someone told me that would avoid some bad things for both me and the person that got the car.
Yeah, yeah. Stop pointing that gun at me, just take the car and that crappy kid I never wanted in the back seat. I’ll just say I don’t remember what happened. Trauma, yeah, trauma, that will work…
Can I at least bum a smoke or something for the walk home?