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Problem is, buying a new car now won’t solve your problem. Another car is sure to draw your eye in less than two years. If you have lots of money, go for it. If you work for a living, think hard before you do that.
I am in my early 60s and retired. We scrimped all our lives and now have very healthy retirement savings. I decided to treat myself to my first luxury car and now I have a 2019 X5.
I financed for five years, because my investments are doing gangbusters, so it would be foolish to pull out enough to buy the car outright.
The X5 traditionally has been one of the best cars in terms of holding value - something I learned recently and never expected. At five years it should be worth 40-45% of what I paid.
At four years, when the warranty expires, I expect to have less than 40k miles and I plan to trade or sell it. If I don’t pay off the loan early, I should have about $15k in equity on the car after paying off the loan or rolling it into the next car.
My plan is to buy new again and keep the car long term. I will be looking at Lexus, Acura, Lincoln, and other brands that tend to cost less long term. I love my BMW but I’m not sure I want to keep trading to keep a car under warranty forever.
I don’t work on cars. My wonderful local mechanic isn’t going to live (or work) forever, but he has already told me he can’t do a lot on a BMW other than standard maintenance. The BMW dealership is 90 minutes away.
Financially, this car is foolish. I could have bought a very nice luxury SUV for a lot less. And in four years, that might be what I do.
My best advice to someone who has a 2-year-old very nice car is to wait at least two more years, then make a decision. This could get to be a hard habit to break.
They key is to ensure that when you are old you are financially secure. Then buy a car every two years if that is what you want to do.
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