leedogg

Found this to be fairly interesting:

5-year Cost of Ownership Details
Depreciation $17,463
Financing $5,075 (for me: $5,708 - calculated from a 7yr payment)
Insurance $8,024 (for me: ~$7000 - geico)
State Fees $624
Fuel $8,002
Maintenance $1,882
Repairs $362
Total 5-year Ownership Cost $41,432

Which kbb rated as excellent compared to similar vehicles

http://www.kbb.com/kb/ki.dll/kw.kc.n...ACD3_AN;060201

neuronbob

Do you have a 7 year loan? Is there really such a beast?

P.S. good info to know about the true cost of ownership. Thanks for the find!

leedogg

84 months through a credit union. A nice manageable 488/month

Bplayer

Very interesting. I estimated my costs a few months ago prior to buying a new TL AT with navi. The estimates were based on actual costs of my 2gen TL.

My calculations below are in US$ (converted from C$ at .83 exchange rate), with a 3.3% inflation factor per year.

Depreciation on AT w/nav is $19,200 (selling prices are higher in Canada)
Insurance $6,500 (2nd car with 5 star rating)
Taxes (State Fees) $320
Fuel $9,200 (10,000 miles / year)
Maint & repairs $6,800
Car wash $2,300 (at commercial hand wash)

My estimates for maintenance and repairs are quite higher but I think more realistic. These costs will include tires, brake pads, rotors, battery, timing belt, water pump, and oil changes. They do not include any body work.

Nandito28

Damn, a 7 year car loan?...you must be paying interest up the ass!

leedogg

488/mo * 84 months = 40,992 - 33,000 (amount financed) = 7,992 in total interest

7,992/7yrs = 1,141.71 in interest per year = paying $95.14 in interest per month.

I consider that $95/month money down the drain....sortof like a lease, but who here is leasing a TL for less than 95/month? good lord, i think I'm spending more for cable tv + internet a month...

maluskills

So with approx $18k of depreciation over 5 yrs...are you saying that in 5 yrs the car will only be worth about $12k? ($30k-$18k) ??

leedogg

I was wondering about that figure as well...looks kinda high, perhaps they are factoring in previous generation acura's which might have a higher depreciation rate... if I look at the bluebook for a 2000 TL they list for 14,950, 99's go for 13,000...not sure what the original prices were though...

leedogg

Plus one other interesting thing to note, if I were to project this out, my 06 TL lists for 35k. Subtract 18k for 7 years and I get an approx bluebook of 16k. Subtract 6k for my interest paid. and I estimate I'll have approx 10k of net value value left on my car. If I had gone with a lease for 84 months, that comes out to 33,516...which is about 1k less than my OTD price. Hence in 7 years I will save approximately 9k by buying instead of leasing.

maluskills

where can u get a 7yr lease????

SouthernBoy

And your point is...?

Brettg

When do you expect the timing belt and water pump to go?
The battery should last at least 5 years, brakes my last a long time.
You wont need any of that stuff in 5 years.

Brett

leedogg

doesnt have to be the same lease, you can simply project leasing for 7 years

Bplayer

The recommended replacement of the timing belt and water pump is at 75,000 miles. You can gamble and wait for them to go or do preventive maintenance.

The battery may last 5 years. For a winter location it is best to replace it at the first hint of a sluggish start to avoid being stranded by a weak battery that will not start in the car in minus degree weather.

Brakes are dependent on how the car is driven. Too much heavy braking could lead to warp or worn rotors, ymmv. With moderate driving mine lasted about 45,000 miles on a 2gen TL.

It is better to plan/budget for it, and if it does not happen then you have money in the bank. The morale is sell the car after 4 years or keep for seven or eight.

sybaek3

good stuff!

6MTPlease

Gotta pick at your math and assumptions a bit. Your $95/mo figure presumes the full 84 mo length of the loan, which I seriously doubt you'll ever see. The premise of your discussion is the so-call 5-yr cost of ownership analysis, so it makes no sense to consider anything beyond that 5-yr term.

Your loan amount and payment suggest an interest rate of 6.375% (way too high, if you ask me, but that's a different point), so if you amortize your loan out 60 months, your actual interest-paid figure will be about $7252, averaging over 5 years at about $121/mo--not $95. That's another $26 dollars down the drain.

You also have to figure that over that 60 months you will be paying about $22,031 toward principle to produce a principle balance of about $10,970. If we can assume an original value of $35,000, supposed depreciation of $17,463 will produce a value of $17,537, leaving you with $6,567 in "equity". Subtracting that "equity" from the $22,031 you paid to get it and you have another $15,464--or $258/mo--down the drain. That's $379/mo you'll never see again. And that's only if you believe the $17,537 future value, which is really only what a dealer will presumably get for a near-perfect car. You really have to figure a below-market individual sale figure or, more commonly, a much lower trade value. If you look at it this way, that comparison to your cable bill seems kind of silly, doesn't it?

Of course, you could look at it the way I do and say that any montly financing cost that doesn't contribute to "equity" is just the cost of enjoyment. Who's to tell me what I spend my money on, and besides, what transportation is free? But are you getting $379 worth every month? Or will it now bug you that only $109/mo of the $488 you are paying will be retained in value? That's a personal decision only you can make, but it sounds as though you didn't have enough information to really make it. You made a different choice based on flawed assumptions.

I sincerely hope you don't have a wreck or need to sell while you're still upside-down. Of course, this is just my personal point of view, but I figure that if I can't afford the 60-month payment (at the most) or if I can't get better than $6.375%, then I can't really afford the car. I can't imagine financing for near purchase price and then financing for 7 years. But I suppose that's one reason I'm not among the thousands of Americans filing for bankruptcy every year.