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
It’ll appreciate, you just gotta park it and let it sit for about 25 years and then it’ll start gaining value as a classic!
But as I tell people who ask me what my stuff’s worth (and something I heard on Hoarders), it’s only worth something if you plan on selling it!
Counting your time as having no value is a hobbyist mistake, and then there’s the tools and shop expense. You might do better by selling your plasma and would have a better relationship with your spouse.
Cars depreciate, as I and others have pointed out, and no grown adult should be shocked, saddened, or surprised by that.
However, for what it is worth, if we do hit some “Mad Max” point I think electric cars will be more useful than gas cars. At this point in history there are a lot of ways to make electric locally, and it takes a lot of potential food, water, and energy to make something like ethanol, which requires a lot of modification for most cars.
So there could be some potential upside yet to the i3.
You can make a bit of methanol without wasting too much food, using the stalks and leaves of your produce (and any weeds you pull), distilling methanol leaves all the nitrates and minerals, taking only the glucose from the cell walls. You can then put it back into the fields as fertilizer.
At least you’d make enough to power a dirt bike or a Citroen 2CV for simple runabout tasks.
Cars depreciate. They are not an investment. They are consumption. If you look at hourly income you made at you best job (as a very rough benchmark of for the value of your time), compared to your hourly income (if any) working on old relatively worthless cars, I would bet you have lost way more money with the old cars than the i3. That’s fine if you enjoy it.
I know an insecure social climber that just bought (not leased fucking bought) a Maserati Levante, just be happy you’re not him. That thing is going to depreciate like an expensive dinner.
If it’s a forever car, then the depreciation doesn’t matter. Plus, this little parenthetical is doing a lot of heavy lifting on pretty much every car David’s ever owned. So really, all of this is a self-mindgame anyway.
I understand the pain. I too usually have purchased most cars fully depreciated and lost very little if now made a made a little on many car purchases. That said, I once owned a 3 year old 2013 MINI. It lost half of what I paid for it in the two years I owned it. Mind you, I had put many miles on it so that wasn’t unexpected, but it was a hard pill to swallow.
I love daily driving a BMW e36 M3. It basically is staying net even for miles vs potential salve value.
I fail to see the purpose in fretting over the value of a car you don’t intend to part with.
Unless the goal is tilting at windmills.
Just remember, for one reason or another, your time you dedicate to labour will become more valuable. So this will change your equation.
You’re gonna have to start choosing what deserves your wrench time. Doubly so if you venture into parenthood.
Isn’t the mustang that caught on fire worth less than you bought it for? Unless you fixed it, and I missed that article
David, I can’t fix much of anything on my new Prius. I need reliability rather than excitement in my car.
That being said, I love reading about how you’ve managed to resurrect your vehicles from the dead! And I’m learning more about some of the coolest vehicles around just by being here.
That’s why I became a member.
David, it’s a bit disingenuous of you to complain (I keed, I keed!) about experiencing depreciation on your lovely gold i3, given that you’ve managed to avoid it on so many of your other cars. I only wish that I had even half of your automotive knowledge, mechanical ability, and time/willingness to provide all that labor hands-on wrenching. If I had ANY of those three things (let alone ALL three, as you do) my lifetime depreciation total on cars I’ve bought and sold would be much less depressing. 😉
If you’re writing about the car enough, reviewing it enough, and using it for other work-related stuff you should probably be depreciating it on your taxes anyway as a business expense unless you’re set up as a strict W-2 employee of Autopian which I doubt you are (or hope you are not). Now that you’re married you should probably talk to an accountant anyway, any decent accountant can easily save you more (legally) than they cost especially if there are business interests involved instead of just two straight salary incomes. The stuff you don’t know about will cost you far more than you need it to, your last three years have involved more financially life-changing events than your previous 30 or whatever combined. Get yourself ready for the next 30 and then the 30 beyond that.
Unrelated to anything, just a note to say at first glance, my brain told me your username was ACatWithoutAHat. Which is a good name too IMO. 🙂
Meow!
You need to realize that your perspective is completely out of line with vehicle ownership. You may have had a good run on profitable vehicles, but most of the rest of the world knows that a vehicle is a DEPRECIATING item.
Then again, I might have a bridge for sale you might be interested in~
Yes! Had I seen your post first Dewey, I’d not have bothered to make my own, less elegant one above. 🙂
If you aren’t planning to sell the car, you’ve lost every penny you spent on it.
I don’t buy things because they will be worth more some day, that’s what investments are for, I buy things because the fill a need, or a want.
I once had a co-worker demand to know what my Return On Investment was for my CD Collection, I replied zero, I don’t buy them to sell them later, I buy them to lsiten to them and enjoy the music. 25 years later, I still have them sitting in a crate in the garage, because they weren’t an investment, and cost me nothing to leave sitting there.
We all have that ROI-obsessed friend, for whom every transaction much somehow benefit him personally. I never invite him to parties.
Sometimes people derive greater value from cars by using it as reliable transportation to the extent that exceeds the car’s decrease in absolute value… meaning that to them it is a net positive.
I know this sounds weird but it is true.
Raising my hand.
Most of our assets depreciate. The big screen TV I paid $1,200 for 8 years ago is smaller than a TV that costs $600 today. Clothing can cost a lot and is mostly worthless after it’s worn a couple times. My house only appreciates because I do the maintenance, or have it done at great expense.
Life is full of depreciating assets. It’s the enjoyment we get out of them that matters.
“Clothing can cost a lot and is mostly worthless after it’s worn a couple times.”
Clothing CAN cost a lot but honestly clothing can be one of the least of ones expenses. Just dressing like a billionare tech nerd drops your annual clothing budget to two figures.
Based on your username I can tell you know what you are talking about about!
https://m.youtube.com/watch?v=S9RVS8cjNN0
“My house only appreciates because I do the maintenance, or have it done at great expense.”
Unless your house was designed by Frank Lloyd Wright or Frank Gehry, it probably does not appreciate, even w/ assiduous maintenance by yourself or highly paid contractors. An old house is just an old house, lacking modern amenities and features (but perhaps having charming details and craftsmanship). It appreciates because of where it is, be that a nice neighborhood or an isolated little plot of privacy. You know, location, location, location.
Warren Buffett still lives in the house he bought in 1958 for $31k (now said to be 6700sq ft). Given where it is, I’d guess it has been added onto at least once. Zillow suggests that its current value is $653k. Not a very good ROI for the Oracle of Omaha, but it suits him & his lifestyle. BTW, CNBC rates it at $1.2M, but I’m sure provenance has something to do with that.
I would think a body/chassis like this in Calif will last 100 years.
At some point you’ll need another battery but by then there should be reasonably priced remans around, or you’ll develop the skillset to reman your own battery.
So potentially the divisor in your cost equation could be a really large number of years and your cost per year very small.
If you never sell it, depreciation is irrelevant. Enjoy the ride!
Buy once every ten to fifteen years. Cry about it during the payments. Enjoy having a paid off car for a few years. Rinse and repeat.
Yep – and working remotely means I might never *HAVE TO* buy a car again. Driving 5,000 miles a year and splitting it between 3 cars is divine.
I know, right? If you’re putting 1666 miles average per year on your cars in SoCal your biggest concerns are collisions, paint, interior and elastomer degradation. With a bit of care those cars may actually last *forever*.
Yeah, the sun burning the clear coat is really the only wear my cars get these days.
Living in the rust belt, having a forever car to drive year round is nigh well impossible. Garaging and anti rust coatings help but the tin worm is relentless.
Give it a few years and your climate will change from “rust belt” into “year round scorching desert”.
With occasional ski weather like Houston gets.
This kind of feeling is a result of thinking too much of a car as an investment, where the goal is to make money. The goal of buying these cars is to enjoy them. Paying for all of your operating costs – fuel, insurance, parts, garage space, etc. – is a bonus. I’m fortunate to have come out “ahead” with most of my cars – two were gifts, a third basically was also a gift, one is worth three times what I paid for it, etc. – but all of this is secondary to the experiences I have with the cars and the joy I get out of those experiences.
I look at car ownership as cost per mile driven, all in, over the ownership period. I buy new, drive it a long time, maintain it, and get rid of it when exhausted and used up or it no longer meets my needs. If you buy something cheap, spend a lot fixing it, don’t end up actually driving it very far during your ownership, but put in a lot of sweat to fix it up. When you sell it, even if you get more than what you spent, and don’t consider your sweat equity, it may not in the end work out to a very good value proposition – unless you just had fun doing it. And that’s fine too.
I persuaded a friend to buy his daughter a new car rather than a used one by arguing that the FIRST 50,000 miles were the best, and it was all down hill after that.
Well written. I agree.
I do what I do best to pay other people to do what they do best.
Exactly. Whenever I consider doing something myself, I count my hourly rate at work into the cost. Doing it that way shows that I’m mostly better off paying someone else to fix things.
Same here. Unfortunately I know too many overconfident men that do not value there time as worth anything and value their cheapness over everything.
I make a LOT in my day job, more than enough that I could sit on my ass and hire pretty much everything and anything done in my houses and cars. But it’s still generally worth it for me to DIY because I can pretty much guarantee I will do a better job of it than the average person for hire today.
And the reality is that I enjoy it. Did some maintenance on my Mercedes today. Probably would have cost me at least $500 in labor (plus marked up parts) to have the Euro local indie do it. I enjoyed it, lots of satisfaction in a job well done, I know it’s done correctly with no corners cut, and I would prefer to have that $500 in my pocket than his.
Things I don’t enjoy, I hire done. I haven’t mowed my own lawn in years.
David, I couldn’t help but notice how easily getting kids in and out of the back of that thing would be- while doing in style with crewinside(as in kids) doors. That will add more value and time to your rig, if y’all decide to have some little DTs.
BTW, that paint job is amazing and actually looks custom. Dare I say it’s almost Maybachish. If you ever do sell it, list it where us Vanderbilt families and fans will see it because it’ll move quickly, if only for tailgating.
It’s just money “on paper”. You only lock in the value loss when you sell it. If you never sell it you’ll never lose the value.
Ding ding ding! Close the comments, we have a winner.
Don’t buy German cars, they are not anymore German whatever they say.
Cosplaying poor my man….
cars are not investments they are tools that ware out. I also “pay” myself for my labor. I refuse to consider my labor in making, building or fixing something as worth $0.
Yeah, I do my own repairs mostly for entertainment value, or when I can’t wait for someone else’s schedule. My time doesn’t have an exact dollar value but I can always ask myself, “would I go on a 2 hour drive for a $20 bill?”
That said, I’m not used to owning depreciating assets either, and I DON’T LIKE IT.
For about 20 years now I have use $25/hr as mental math for my time. I should probably increase that to $35/hr. If I can repair something at $25/hr including time to get parts, teach my self how to do it, fix it, and repair what else I broke trying to do the repair myself or pay someone else to do it then I make the calculation and choose.
I use my hourly rate at my job – I certainly don’t work for fun.